Red Riding Hood and the not so big bad landlord
Who would have thought a trip to the pantomime would start a discussion about Red Riding Hood’s property litigation issues? Well it turns out, when you’re watching with your legal colleagues that’s exactly what happens. Don’t say lawyers don’t know how to have fun...
The villain of the piece is Sir Jasper de Vyle, Squire of Ferndale Village. Leaving aside his questionable title deeds (which is another property law question we won’t get into), he is the owner and landlord of all of the properties in Ferndale Village. Since he doesn’t employ a decent manager to look after his commercial property, and spends most of his time trying to win the affections of Red Riding Hood, it’s little surprise he has let things slip. Ten years of unpaid rent in one property; squatters in another; and that’s not even getting started on the rats in the bakery - also known as a tenant failing to comply with its repair and maintenance obligations (ahem…).
With the wolf keeping the other villagers occupied, now would be a good time for Sir Jasper to get his empire in order. But what can landlords in his situation do? And has he left things too long?
Ten years’ unpaid rent
Sir Jasper’s delay has unfortunately cost him and he can only recover the last five years of any arrears. The right to recover anything older than that has likely been lost because of prescription, which extinguishes most contractual debts that are not enforced for more than five years.
But all is not lost - the latest five years of arrears can be recovered (and fortunately it is rare for arrears to accrue for that length of time). With a registered lease, a landlord can typically go straight to the enforcement stage – potentially freezing the tenant’s bank account or seizing their assets. If the lease is not registered, a landlord can still sue the tenant for payment and take enforcement steps once the court action is complete. Raising the action may in itself be enough to prompt payment.
Alternatively, a landlord can take steps to terminate the lease for unpaid rent. This is known as irritancy. The landlord must first give the tenant at least 14 days’ notice requiring payment of the arrears, but if the arrears remain unpaid after that, it is curtains for the lease. The landlord can then raise court action to have the tenant evicted, suing for payment of the arrears at the same time.
Terminating the lease does mean taking back responsibility for paying business rates, so a landlord may be better off waiting until Aladdin has signed a lease for next year’s pantomime before pressing the irritancy button.
Squatters; former tenants; other unauthorised occupiers –landlords can take steps to have each of them removed.
While Sir Jasper might be tempted to send round his henchmen to carry out the eviction, even unlawful occupiers have some protection against eviction. So, a landlord is often best advised to get a court decree. There is well-defined court procedure to have unauthorised occupiers removed. Where the occupier has previously had some right to be in or on the property (such as a tenant who has not left after the end of their lease), the process usually takes a couple of months. Where the occupiers have just moved into or onto the property, and especially if there is a risk of them causing damage to the property, the process can be much quicker – within days.
Failing to comply with repair and maintenance obligations
Landlords can hold off dealing with a tenant’s failure to repair until the end of the lease, making a terminal dilapidations claim at that stage. Often that is a good strategy. However, a property may equally need to be protected or brought up to standard while the lease is still running.
A tenant’s repair and maintenance obligation in a well drafted lease will run for the whole of the term, meaning the tenant can be called upon to carry out repairs at any point. Faced with a tenant refusing to do so (perhaps distracted by the wolf “at the door”), a landlord may be able to step-in and carry out the works themselves. Alternatively, they may prefer to take court action for an order that the tenant carries out the works. If the tenant then fails to comply with the court order, they will be in contempt.
If a landlord has simply run out of patience with their tenant, termination of the lease (another example of irritancy) is another option. The rules are slightly more forgiving for tenants than with rent arrears, but in cases of serious ongoing breaches, the option to terminate is usually available.
Sir Jasper de Vyle got his comeuppance in the end when his questionable title deeds came back to bite him. As a pantomime villain, nobody seemed to mind that his tenants were getting away with being in breach of many of their lease obligations. However, landlords of all types are entitled to enforce their tenants’ obligations (and are not villains if they do so in a consistent (and legal!) way).
1st April 2020
What do the changes mean for landlords and tenants?
30th March 2020
How to deal with various dilapidations issues against the backdrop of the COVID-19 crisis.
3rd October 2019
There’s been a welcome clarification for landlords & tenants on notices in commercial leases.