Legal practitioners: Mind the Label! – the parallel effect of “Subject to Contract” and “Without Prejudice”

Case concerned:

Joanne Properties Ltd v Moneything Capital Ltd [2020] EWCA Civ 1541[1]

The Case Background

This case concerns a claim brought by Joanne Properties Ltd (‘JPL’) in the Queen’s Bench Division due to a dispute of a financial arrangement between the parties. JPL was the owner of a building in London (the ‘Property’). It took a loan from Moneything Capital Ltd (‘MC’) which was secured by a legal charge over the Property. In the proceeding, as an interim measure, parties agreed for the Property to be sold and a ring-fenced amount (£140,000) was agreed to be decided for payments to each party, terms to be agreed.

The Negotiation

The parties subsequently entered into negotiation via solicitors for the division of the ring-fenced sum.

Lord Justice Lewison’s judgement made a summarised record of the negotiation in question, which precisely highlighted and pinpointed parties’ usage of wording of “subject to contract”, and “without prejudice save as to costs” for the quasi-Part 36 offer made[2]:

Mr Irvine[3] introduced the “subject to contract” label as early as his e-mail to Mr Goldberg[4] of 29 May 2019. In the course of a telephone call between himself and Mr Goldberg on 13 June, Mr Irvine put forward a different offer “without prejudice and subject to contract”. Mr Goldberg relayed this offer to his client, expressly referring to the fact that it had been made “subject to contract”.

On 19 June 2019 Mr Irvine made a more formal written offer headed “without prejudice save as to costs”. It was not headed “subject to contract”. Although it is (now) common ground that that offer was not compliant with CPR Part 36, it was interpreted at the time by both Mr Irvine and Mr Goldberg as though it was. It was clearly intended to be capable of acceptance. But it was not accepted; and Mr Goldberg’s subsequent proposal of 21 June was again headed “without prejudice and subject to contract”. His improved offer of 26 June was headed in the same way. Mr Irvine and Mr Goldberg spoke on 11 July. In that conversation Mr Goldberg proposed that £72,000 of the ring-fenced sum would be released to Moneything. Mr Irvine’s attendance note recorded:

“David [Goldberg] confirmed that this was a firm offer with instructions from [Joanne] to make to [Moneything] and if accepted, that was the matter concluded, save that we still had to work out the mechanics of how the funds got released from the ring fenced sums.”

On 11 July 2019 Mr Irvine emailed Mr Goldberg. The email was headed “without prejudice and subject to contract.” He said that his clients would accept £75,000 from the ring-fenced sum; “mechanics and terms to be agreed.” Since Mr Irvine had proposed the release of £75,000 rather than £72,000, that was clearly a counter-offer rather than an acceptance of Mr Goldberg’s proposal. Mr Goldberg replied later in the day. The subject line of the e-mail also read “without prejudice and subject to contract”. The first word of the e-mail was “Agreed.” He said that counsel was away and that he would liaise with counsel and “put a proposal to you to achieve the desired end.”

Later in the month, Joanne changed solicitors. The solicitor now representing it was Mr Smith. On 24 July 2019 Mr Irvine wrote to Mr Smith. His letter was again headed “subject to contract;” this time in upper case bold font. The letter said:

“We trust that your instructions accord with our understanding that the claim has been settled on terms…”

and he enclosed a consent order to dispose of the proceedings. The draft consent order contained a number of terms that had not previously been discussed. He explained that it was in Word format so that tracked changes could be made.

On 9 August Mr Irvine e-mailed Mr Smith to ask if he had any comments on the draft order; and followed it up with a letter on 13 August. The letter said that unless the draft consent order was agreed by 20 August, Moneything would apply to the court for an order in those terms. The application was duly issued and served on 30 September 2019. That prompted the reply from Mr Smith that there had been no binding settlement because the negotiations had been conducted “subject to contract”.

The High Court as the first instance court concluded that the parties reached settlement. JPL appealed to the Court of Appeal.

The CA’s Consideration

Three Judges heard the case in the Court of Appeal where they unanimously upheld the appeal and overturned the first instance judgment.

Subject to contract

The Judges examined the authorities on the meaning of the phrase ‘subject to contract’. In Lewison LJ’s judgement, he gave a few examples of the effect of the phrase “subject to contract”, quoting Lord Denning MR in Tiverton Estates Ltd v Wearwell [1975] Ch 146, 159:

‘It is everyday practice for a solicitor, who is instructed in a sale of land, to start the correspondence with a letter “subject to contract” setting out the terms or enclosing a draft. He does it in the confidence that it protects his client. It means that the client is not bound by what has taken place in conversation. The reason is that, for over a hundred years, the courts have held that the effect of the words “subject to contract” is that the matter remains in negotiation until a formal contract is executed.’[5]

In inspecting Sherbrooke v Dipple (1981) 41 P & CR 173, the judgement again quoted Lord Denning’s explanation: Everything in the opening letter was “subject to contract.” All the subsequent negotiations were subject to that overriding initial condition. Further in Sherbrooke, the CA had approved the proposition previously formulated in Tevanan v Norman Brett (Builders) Ltd[6], in which was held that: parties could get rid of the qualification of ‘subject to contract’ only if they both expressly agreed that it should be expunged or if such an agreement was to be necessarily implied.

Lewison LJ emphasised the distinction between whether an agreement has been reached “subject to contract”and whether the parties have merely reached an incomplete agreement, in which case would be a different question.

In this case, the CA held that in this negotiation for settlement, the consent order is equivalent of the final contract, and that the qualification of “subject to contract” had not been expunged by agreement in the course of parties’ negotiation either expressively or impliedly.

Part 36 Offer[7] – Without Prejudice Negotiation

Lewison LJ in his judgement distinguished Part 36 offer in litigation, from usual offer in law of contract:

‘an offer of contract which is rejected (either expressly or by the making of a counter-offer) cannot subsequently be accepted. That is not true of a Part 36 offer, which may be accepted even after the offeree has put forward a different proposal: Gibbon v Manchester City Council [2010] EWCA Civ 726, [2010] 1 WLR 2081.[8]…..

The Part 36 offer is, in effect, a free-standing offer. It is not a legitimate inference that the making of such an offer recalibrates attempts to compromise a dispute which are taking place in parallel.’[9]

Part 36.9 of the CPR refers to the way Part 36 offer works differently than contractual offer:

‘Withdrawing or changing the terms of a Part 36 offer generally 36.9

(1) A Part 36 offer can only be withdrawn, or its terms changed, if the offeree has not previously served notice of acceptance.

(2) The offeror withdraws the offer or changes its terms by serving written notice of the withdrawal or change of terms on the offeree

(3) Subject to rule 36.10, such notice of withdrawal or change of terms takes effect when it is served on the offeree.

(4) Subject to paragraph (1), after expiry of the relevant period—

(a) the offeror may withdraw the offer or change its terms without the permission of the court; or

(b) the offer may be automatically withdrawn in accordance with its terms.

(5) Where the offeror changes the terms of a Part 36 offer to make it more advantageous to the offeree—

(a) such improved offer shall be treated, not as the withdrawal of the original offer; but as the making of a new Part 36 offer on the improved terms.

The Judgement and what to take away

The Court of Appeal overturned the first instance judgement, and held that, during the course of negotiation, the parties had not removed the “subject to contract” umbrella; and that as the party refused to sign the consent order, there was no bidding settlement reached. The appeal was allowed.

As mentioned above, the judgement inspected in-depth the Part 36 offer and the contractual negotiation, concluding that these negotiations can be proceeded in parallel.

Notably, the CA took into account of parties’ post-agreement conduct in the judgement, without ruling on whether post-agreement conduct shall be considered of determining factor on reaching of settlement.

The case serves a useful reminder for legal practitioners to label the relevant communications properly “eg. Subject to contract”, when in working process of negotiation of contract/agreement in both informal and formal settings.

Where the negotiation takes place in the context of settling a dispute, it may be appropriate to mark the communication “without prejudice”.

By applying such good practices, practitioners effectively inform the other party the nature of the communication, thus prompt appropriate approach. Further, these practices may assist court in the event a dispute arises in relation to it.

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[1] For full Judgement see https://www.bailii.org/ew/cases/EWCA/Civ/2020/1541.html

[2] n1(this part of the judgement is quoted fully due to intertwined usage of the two phrases in the timeline)

[3] Solicitor for MC

[4] Solicitor for JPL initially

[5] n1 Judgement

[6] (1972) 223 EG 1945

[7] https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part36

[8] For full Judgement see https://www.bailii.org/ew/cases/EWCA/Civ/2010/726.html

[9] N1

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Things to know in an application for a rent repayment order – a view from the prism of Martin Joseph Rakusen v Mikkel Kepsen and others

Written by Felix Otouke.

The case is about an appeal to the Upper Tribunal (Lands Chamber) by Mr Rakusen against the decision of the First-tier Tribunal (Property Chamber) (FTT). It was issued on 18^th December 2019.

Case breakdown

In 2006 the freeholder of the building granted a lease of Flat 9, Mandeville Court, Finchley Road, London, NW3 to Mr Rakusen for a term of 999 years, In 2013 he assigned the lease to himself and his partner Ms Field. They lived there as their home and later moved elsewhere and decided to let the flat.

31^st May 2016, Mr Rakusen granted a tenancy of the whole flat to Kensington Property Investment Group, Ltd (KPIG). The tenancy was for a term of thirty-six months for a rent of £2,643.33 a month.

Later in 2016, KPIG entered into a separate written agreement with the three respondents Mr Jepsen, Mr Murphy and Mr McAuthur. They were each granted the right to occupy a room in the flat. They had licence agreement and provided for a licence fee. The total sum paid by the respondents was £2,297.00 per month. The documentary evidence did not show how many rooms were in the flat and how many people lived in the flat with the respondents. There is material which suggests that by November 2018 there were four people living in the flat. Mr Rakusen in his witness statement acknowledges that there were more than three people forming two or more households occupied the premises. On that basis, he accepted that the flat was a house in multiple occupation (HMO) and was required to be licensed under Part 2 of the Housing Act 2004.

In November 2018, Hamptons informed Mr Rakusen that KPIG wished to apply to the local housing authority for an HMO licence. The evidence showed that no such application was made and no licence was granted. Mr Rakusen did not renew the tenancy of KPIG at the end of the fixed term in May 2019.

On 27^th September 2019, the respondents applied to the FTT under section 41, 2016 Act for rent repayment order totalling £26, 140.00 against Mr Rakusen and Ms Field. The grounds for making the application were stated to be control or management of an unlicensed HMO and in support of that application respondents provided copies of the agreements between themselves and KPIG.

In response to the application, MR Rakusen and Ms Field invited the FTT to strike out the application on the grounds of that there was no reasonable prospect of it succeeding. They argued that a rent repayment order could only be made against the immediate landlord of the person who made the application. Mr Rakusen was not the immediate landlord of the applicants and Ms Field had never been party to any agreement in respect of the property with either KPIG or the applicants. Hence, no order can be made against either of them.

The FTT directed that the application to strike out the claim should be determined as a preliminary issue, and the applicants request, at a hearing. On 18^th December2019, the FTT issued its decision. It struck out the application against Ms Field on the grounds, that there was no reasonable prospect of it succeeding against her. It refused to strike out the application against Mr Rakusen, as it was bound by the decision of this Tribunal in Goldsrough v CA Property Management Limited [2019] where Judge Coke held that determined that an application for a rent repayment order could be made against a superior landlord. The FTT granted permission to appeal.

The issue in the appeal was whether a rent repayment order under the Chapter 4 of the Part 2, Housing and Planning Act 2016 can only be made against the immediate landlord of the tenant in whose favour the order is made.

Martin Rodger QC Tribunal Deputy Chamber President of the United Kingdom Upper Tribunal (Lands Chamber) in his disposal or determination ruled that “ there has been no investigation of the facts in this case and I stress that it has not been established that the appellant has committed any offence. The offence of having control or management of unlicensed HMO is subject to the statutory defence of reasonable excuse under section 72(5) (a) of the Housing Act 2004. The Appellant filed evidence with the FFT in support of his reasonable excuse defence, but couple it with an application to strike out the claim which he asked to be dealt with at a hearing. Procedurally it would have been much simpler if the FTT had heard the evidence at that hearing and dealt with the defence in its decision, but it did not do so and the application for rent repayment order must now be referred back to the FTT to be determined.”

The disposal or determination of the Deputy Chamber President brings to mind the following essential information:

First, the objective of the provision of the whole of Part 2 Housing and Planning Act 2016, is deterrence rather than compensation. It is to deter the commission of housing offences and discourage the activities of rogue landlords in the residential sector by imposing stringent penalties in situations involving unlicensed Home in Multiple Occupation (HMO). The offences to which Chapter 4 applies is provided in section 40 (3), namely: violence or harassment using violence to secure entry contrary to section 6 (1), Criminal Law Act 1977; unlawful eviction or harassment of occupiers contrary to section 1 (2), (3) or (3A), Protection from Eviction Act 1977, failure to comply with improvement notice contrary to section 30 (1) or a prohibition order contrary to section 32 (1) or being in control or management of an unlicensed house contrary to section 72 (1) and breach of a banning order contrary to section 21, 2016 Act. Parliament have intended that the expansion should also expose an additional class of landlords who commit those new housing offences to the risk of a rent repayment order.

Second, the First-tier Tribunal (Property Chamber) (FTT) has jurisdiction to make a rent repayment order against any landlord who has committed an offence to which Chapter 4 applies, including a superior landlord (freeholder). Thus, section 40 of 2016 Act provides that (1) “this chapter confers power on the First-tier Tribunal to make a rent repayment order where a landlord has committed an offence to which this chapter applies. (2) A rent repayment order is an order requiring the landlord under a tenancy of housing in England to (a) repay an amount of rent paid by a tenant, or (b) pay a local housing authority an amount in respect of a relevant award of Universal Credit paid (to any person) in respect of a rent under the tenancy.” It is important to note, that the landlord in question must have committed one of the relevant offences. The FTT must be satisfied to the criminal standard of proof and that is, “beyond reasonable doubt,” before an order may be made.

Third, identifying who may be required to make the payment is very important. Section 40 (2) defines a rent repayment order as an order requiring “the landlord under a tenancy of housing in England” to make the payment. The landlord in question has already been identified by virtue of the definite article (the) which is the landlord who has committed the offence in section 40 (1). It links the person against whom an order may be made against to the offence. The landlord in section 40 (2) is the landlord under “a tenancy.” The indefinite article (a) is required because no particular tenancy has yet been identified. Hence, a rent repayment order requires the landlord under a tenancy in England to repay an amount of rent paid by a tenant. A tenant may only apply for an order against a person who has committed an offence if the offence relates to housing, at the time of the offence, was let to the tenant. Under section 40 (2) (a), “a tenant”, means that there is no necessity for an immediate relationship between the landlord under the tenancy and the tenant to whom an amount of rent is to be repaid. The main thing is, that the recipient of the payment is a tenant, the landlord who is to make the payment many not be the immediate landlord of the tenant who receives it. Under section 40 (2) (b) a rent repayment order may require “the landlord under a tenancy to pay, to a local housing authority an amount in respect of the Universal Credit paid (to any person) in respect of rent under the tenancy.” There is a direct connection between the landlord and the rent in respect of which Universal Credit has been paid.

Fourth, the offences listed in section 40 (3) can be committed by somebody who is not the immediate landlord of the occupier of housing in England. The offence of doing acts likely to interfere with the peace or comfort of a residential occupier contrary to subsection 1 (3), may be committed by any person. It is an offence, contrary to subsection 1 (3A), 1977 Act, for the landlord of a residential occupier or an agent of the landlord to do acts likely to interfere with the peace or comfort of the occupier or members of their household, knowing that the conduct is likely to cause the occupier to give up occupation of the premises or refrain from exercising any right. Under subsection 1 (3C), the meaning of landlord include the immediate landlord of the occupier but also the superior landlord.

Fifth, it is worth identifying whom to serve an improvement notice. An improvement notice is a notice served by a local housing authority requiring the person on whom it is served to take specific remedial action in respect of a hazard found to exist on a residential premises under section 11 (2) and 12 (2), Housing Act 2004. Where the premises in question are licensed under Parts 2 2 or 3 of the 2004 Act, any improvement notice must be served by the local housing authority on the licence holder under paragraph 1, schedule 1, of the 2004 Act. Where the premises are not licensed an improvement notice may be served in the case of a dwelling, on the person having control of the dwelling, and in the case of an HMO, either on the person having control of the HMO or the person managing it under paragraph 2, schedule 1 of the 2004 Act.

The local housing authority must be satisfied that the applicant is fit and proper person to be licence holder, and that of all the persons reasonably available to be the licence holder in respect of the house, that they are the most appropriate. A local housing authority must consider the practicality of the recipient of an improvement notice being able to carry out the necessary remedial works. If this is the case, an intermediate landlord has no significant repairing obligations and no right to carry out major repairs to the building. The local housing authority ,may well consider that the appropriate recipient of an improvement notice is the superior landlord. Thus, a banning order may be imposed on superior landlord other than the immediate landlord in these circumstances.

Sixth, the person who receives the rack-rent of the premises (whether on his account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack-rent may be considered as a person having control of the premises under section 263 of the Housing Act 2004. Rack-rent means, a rent which is not less than two-thirds of the full net annual value of the premises. A person who is owner or lessee of the premises may be considered as a person managing the premises under section 263 of 2004 Act.

Thus, if a house is let on a rack rent the person having control is the person who receives the rack-rent under section 263 (1) of the 2004 Act. If the house is not let at a rack-rent (for example because the only letting is at a ground rent) the person having control is the person who would receive the rack-rent if the premises were subject to a letting at a rack-rent. The formula used in this definitions are explained in Pollway Nominees Ltd v Croydon LBC [1987 1 AC 79. The purpose of the definition is to identify the person or group of persons who collectively have relevant interest, who may be made subject to a statutory obligation to undertake work or make a contribution to the cost of public works. In Urban Lettings (London) Ltd v LB Haringey [2015] UKUT 104 (LC), it was accepted that more than one landlord could be in receipt of rack-rent at the same time. Hence, superior landlord and the intermediate landlord can be in receipt of rack-rent at the same time.

Seventh, there is a statutory defence of reasonable excuse under section 72 (5) (a) of the Housing Act 2004. It is an extremely difficulty defence to establish because the defendant must be able to demonstrate that things have occurred outside of their control. Ordinarily, inaction or ignorance will not suffice.

In the light of the above information, you can see that the issues arising are rife with litigation between landlords and tenants. It is pertinent where tenants fall victim to rogue landlords especially in circumstances of HMO. Hope is not lost if you are a tenant and you find yourself in difficulty with your landlord. Do feel free to contact our litigation team if need be. They have the expertise in this area of law to assist you in resolving the concerns you may have with your landlords especially if they are rogue landlords.

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Non-competition restriction in employment contract unreasonable and void – Quilter Private Client Advisers v Falconer.

Written by Rosa Huang.

When an employment is terminated, the employer runs the risk of losing of its business (or staff) before it had opportunity to strengthen relationships with customers who have been used to dealing with the departing employee. The risk may be significant especially when the departing employee was in a more senior position in the company.

Because of this, it is common for an employer to seek to restrict an employee’s post-termination activities, by means of express post-termination restrictions (or restrictive covenants). The most common types of post-termination restrictions are restrictions on disclosure of information, non-competition, non-solicitation, and non-dealing restrictions.

However, an employer will only be able to enforce a post-termination restriction if the restraint is:

reasonable as between the parties, that is, the restraint must afford no more than adequate protection to the party in whose favour it is imposed; and

reasonable in the public interest. Certain restraints are unreasonable and is not enforceable because they are against the public interest.

In the decision on Quilter Private Client Advisers v Falconer [2020] EWHC 3294 (QB) handed down on 4 December 2020, the High Court held that the employer failed to show that a nine month non-competition clause in the employment contract was reasonable necessary for protection of its legitimate business interest and therefore is void and not enforceable.

Background

The first defendant (Ms Falconer) joined the claimant, Quilter Private Client Advisers (Quilter) as a financial adviser in January 2019. Her contract of employment contains a nine-month non-competition clause, as well as a non-solicitation clause and a non-dealing clause.

Ms Falconer resigned in July 2019 when it was still during her six-month probationary period. A few days later after her resignation, she went to work for one of Quilter’s competitors, the second defendant (Continuum). She was on the face in breach of a nine-month non- competition clause in her contract of employment.

Quilter did not take steps to enforce the covenant for several months after it found out she was working for a competitor, instead it brought other claims relating to alleged misuse of confidential information and to enforce non-solicitation and non-dealing covenants.

Judgment

The High Court held that each of the non-competition clause, non-solicitation clause, and non-dealing clause in the contract of employment of Ms Falconer was an invalid restraint of trade and unenforceable. Accordingly, the claims by Quilter that she was in breach of those restrictive covenants were dismissed.

The High Court also held that the nine-month non-competition clause was not reasonably necessary for the protection of Quilter’s legitimate business interests and relevant factors included:

The nine-month restriction applied irrespective of the length of Ms Falconer’s employment. It was unreasonable to prevent her from being employed by a competitor for nine months when her employment with Quilter might have lasted just two weeks

Ms Falconer’s employment was subject to a six month period of probation, which made it foreseeable that her employment might be terminated during the probation period after having been employed for only a short period of time, yet she would still be subject to a nine month non-competition restriction; besides, she would only have had time to build a very short-term relationship with any clients in that short period

The short notice applied to Ms Falconer’s resignation implies that the employee’s services are less valuable to the employer and in less need of protection

Senior employees in the same company were subject to the same restraints as Ms Falconer (in one case even shorter restraints than Ms Falconer’s). Quilter failed to provide evidence to justify imposing the same or longer restraints on a junior employee as on more senior employees. It appears that Quilter had taken a “one size fits all” approach without proper considering on what restrictions would be suitable for an employee of her status

A non-dealing covenant would have been adequate protection for Quilter’s business interests. In addition, evidence suggested that the non-competition covenants were not industry standard, were unusual and not reasonably necessary

the fact that Quilter did not seek injunctive relief for nearly five months also suggests that non-competition covenant was not necessary

Comments

The case is a useful reminder that when drafting or seeking to enforce covenants in an employment contract, some factors should be taken into account to minimise the risk that they will be found to be unenforceable.

First, the employer must show that the restriction is no wider in its effect than is reasonably necessary for the protection of the legitimate interest in question.

For post-termination restrictions, assessment of the reasonableness of a restriction between the parties usually involves considering:

the nature and suitability of the restraint provided by the restriction

the geographical ambit of the protection afforded by the restriction

the duration of the effect of the restriction

whether a lesser form of restriction would provide sufficient protection

The relevance and significance of each of the above factors will vary depending on the type of restriction under consideration.

The burden of proof is on the employer

The courts tend to scrutinise post-termination restrictions in employment contracts to a greater extent than restrictions in commercial agreements, this means burden of establishing the reasonableness of restriction in an employment contract by employer represents a relatively high hurdle for employer.

Second, when drafting an employment contract, for example in relation to a non-competition clause, or a non-solicitation clause and non-dealing clause, proper and thorough thoughts must be given to suitability of the restrictive covenants for the employee of his specific status, including job position and seniority. ‘One size’ does not fit all status of employees.

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Possession Action in Lockdown 3.0 – What you need to know.

With a new lockdown comes a wave of repercussions in terms of law, society and lifestyle. Procedures are updated, rules are created or waived and people must once again readjust to keep up with the times.

One important issue that we have spoken about in weeks previously is evictions and possession actions which are of great significance to both landlords and tenants. With the current lockdown firmly in place, what should both parties be aware of in the coming months?

What does Possession Action mean?

A more in-depth analysis on possession action can be found in our article here, but essentially it is a Court order issued to remove a tenant from a property when the landlord no longer wants them to be there, usually for a specific reason but sometimes without one in what is normally called no-fault eviction. These reasons can be to do with rent not being paid or anti-social behaviour from the tenant etc. In the case of no-fault eviction, it normally happens when a fixed-term tenancy comes to an end (in legal terms, an assured shorthold tenancy), the landlord does not want to rent this property out at all or to one particular tenant, they wants to take over the property themselves.

Due to the Coronavirus lockdown, there have been updates on how and when such orders can be carried out.

The following is directly in line with the most recent guidance issued on the Government website, which can be viewed in full here.

Notice periods for tenants

Notice periods of eviction given to tenants from 29 August 2020 to at least 31 March 2021 must be at least 6 months for most grounds. This applies during the national lockdown. There are certain cases where a shorter notice period may be provided. These include those in relation to anti-social behaviour (including rioting), false statement, criminal activities (such as where there is evidence that the property is in the danger of being damaged)and where a tenant has accrued rent arrears to the value of at least 6 months’ rent and there is evidence that the tenant is abusing the current pandemic situation, e.g. there is evidence that the tenant is not affected by the pandemic, but simply chooses not to pay the rent.

The two most frequently used types of notice that landlords issue tenants are the Section 8 and the Section 21 notices.

Issuing a Section 8 notice during lockdown

The following is directly in line with the most recent government guidance.

Landlords can give their tenants a Section 8 notice if they have a reason for wanting them to vacate the premises which corresponds with a specific ground; for instance, they have broken the terms of the tenancy.

Under the provisions of the Coronavirus Act 2020, a notice seeking possession which was given to a tenant from 26 March to 28 August 2020 must have provided them with a notice period of at least 3 months.

However, in line with the new lockdown rules, these provisions have now been extended. A notice seeking possession which is given to a tenant from 29 August 2020 until at least 31 March 2021 must provide a notice period of at least six months in most circumstances.

However, there are exceptions to this in some instances:

– For notices in relation to anti-social behaviour, rioting and false statement, the required notice periods have returned to their pre-Coronavirus Act 2020 lengths. In some cases, this means that proceedings for anti-social behaviour can be brought immediately. Notice periods on these grounds otherwise vary, depending on the type of tenancy and ground used, between two weeks and one month.

– Where at least 6 months of rent is unpaid, a minimum 4-week notice period will be required. If less than 6 months of rent is unpaid, then the notice period is 6 months.

– Where a tenant has passed away or is in breach of immigration rules and does not have a right to rent a property in the United Kingdom then a minimum 3-month notice period is usually required.

If a landlord wishes to serve a new notice in order to take advantage of the new shorter notice periods required for certain serious cases, they should, where they are issuing a new notice of the same type, withdraw the first notice before they serve a new notice.

Note: The requirement to provide a minimum of 6 months’ notice in most circumstances applies during the national lockdown.

Landlords may find it helpful to seek independent legal advice regarding these matters. We are always available to assist in such issues.

How to serve a Section 8 notice

Landlords will have to fill in Form 3 in order to serve a Section 8 notice, which can be found here.

It is important that this form is filled in correctly. Landlords can seek legal advice to help with this, which Lisa’s Law can provide. If it is not filled in accurately the landlord will experience serious delays.

Landlords must specify on the notice the specific grounds they are using to seek possession of their property.

Depending on particular circumstances, the landlord can go down two routes:

They can use mandatory grounds. These are grounds where the judge must order the tenants to leave the property if the landlord can prove the ground. For example, if there is evidence for 8 weeks’ rent arrears or convictions for anti-social behaviour.

There is also the possibility of discretionary grounds. These are grounds where the judge can only order the tenants to leave the property if the landlord can prove a discretionary ground and the judge considers it reasonable to make an order. Examples include grounds for other breaches of the tenancy agreement, such as repeated noise complaints from neighbours.

Issuing a Section 21 notice during lockdown

The following is directly in line with the most recent government guidance.

Due to coronavirus (COVID-19), from 26 March 2020 to 28 August 2020 the minimum Section 21 notice period that you can give to your assured shorthold tenants was 3 months.

From 29 August 2020 until at least 31 March 2021 the minimum notice period is 6 months. That means that there must be at least 6 months between the date your tenant receives the notice, and the date after which you specify they must leave the property. You can make a claim for possession in the county court if the tenant has not left by the date specified in the notice. However, if you have agreed with a tenant that a longer notice period will be given, for example if there is a written tenancy agreement that provides for a longer period of notice, that longer period will apply.

Note: The requirement to provide a minimum of 6 months’ notice applies during the national lockdown.

How to serve a Section 21 notice

Landlords can only use a Section 21 notice if their tenants have an assured shorthold tenancy (which is the most common tenancy). It cannot be used it if the tenants have an assured tenancy.

Landlords can only use a Section 21 notice to ask the assured shorthold tenants to leave the property:

after a fixed term tenancy ends

during a tenancy with no fixed end date, which rolls over at particular intervals of time – for example, on a month by month or week by week basis – known as a ‘periodic’ tenancy

The form which must be filed for this type of notice to be served is the 6A form, which can be found here. As with the Section 8 form, this must be filled out correctly and legal advice is recommended.

More information regarding notice periods can be found here.

Warrants and Bailiffs in lockdown

If the situation is not coming to an end after the notices are served, the landlords need to apply for possession order and then ask the court for a ‘warrant for possession’ if their tenants do not leave the property by the date given in an order for possession, or do not abide by the conditions set out in a suspended order of possession. It costs £121.

If landlords originally issued their possession claim using the possession claim online service they can request the warrant directly through that service. Otherwise they should send the request and the fee to the court where the hearing was held.

During lockdown:

The government is extending existing legislation to ensure bailiffs do not serve eviction notices or evict, except in the most serious circumstances. These circumstances are:

illegal occupation

false statement

anti-social behaviour

eviction of perpetrators of domestic abuse in the social sector where the victim is housed elsewhere

where a property is unoccupied following death of a tenant

serious rent arrears being greater than 6 months’ rent.

This legislation will be in place for at least six weeks until  the end  of 21 February and will be kept under review.

Our thoughts

The times we are currently living in are filled with unusual challenges, stressful situations and increased levels of uncertainty. We hope that wherever possible people will be able to stay in their homes and some normality will resume in the coming months. If tenants are worried about losing their current accommodations, we advise them to get in touch with us so that we can help them work out the best outcome together.

Not only focussing on tenants, we also sympathise with the landlords who find themselves at a loss where their property is being damaged or they have gone many months without any rent being paid, which for some landlords is their main source of income.

It is a tough situation for everyone, but we are always willing to find the best solution for our clients!

Have questions? We are operating as usual!

We are ready to provide you with a fantastic legal service and there are many ways for you to contact us!

Call us on 020 7928 0276, phone calls are operating as usual and will be taking calls from 9:30am to 6:00pm.

Email us on info@lisaslaw.co.uk.

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

Links to download below:

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Android: https://play.google.com/store/apps/details?id=com.lisaslaw

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How can I move home safely during Lockdown 3.0?

The latest lockdown restrictions have had a massive effect on everyone’s life and will have many feeling like cooped up chickens. What may come as a bit of a surprise is the fact that it is still legal to ‘fly the coop’ so to speak, that is, move home.

House viewings can still take place under the appropriate circumstances as long as masks are worn and the 2m distance is respected between people who do not live together. Estate agents are still able to do their jobs, and moving companies are still allowed to operate.

The question is, how can you move home safely during this third lockdown and what does the official guidance from the UK government suggest?

Moving your belongings

As we mentioned above, moving companies are still largely active in the UK and people are well within their rights to use them. It is worth noting that while each company is likely to have adopted similar policies in terms of wearing masks and using hand sanitizer, they may still have altered their procedures due to coronavirus. This means it is beneficial to contact the moving company of your choice as early as possible in advance of your moving date.

If removal firms are unavailable, another household can currently help you move your belongings, but social distancing guidelines and hygiene measures should be followed where possible.

You should try and do as much of the packing up as possible yourself, along with those living with you. This is to avoid having other people touch your individual belongings too much. Moving companies may be able to offer advice over the phone regarding the packing away of fragile items.

Where possible, it is recommended that you clean your belongings with standard domestic cleaning products before they are handled by others, including removal firms. Hands should also be cleaned regularly by everyone involved in the move.

Ventilation is very important when it comes to halting the spread of coronavirus, so be sure to keep doors and windows open while people are helping you move your possessions.

We know that it is custom to offer workers tea or coffee when they enter your house, but in these circumstances you should not provide refreshments. However, you should ensure removers have access to hand washing facilities, using separate towels or paper towels if possible, which should be washed or safely disposed of afterwards.

Home improvements

Once you have moved into your new home it is likely that you will want to make your mark on it with some DIY (provided that it is your home rather than rented from a landlord, where you may need permission to make alterations). It is one of the most exciting things about having a new home.

Where a job is more complicated, such as plumbing related issues, or you would rather pay a professional to ensure the final product is up to scratch, tradespeople are normally relied upon.

The general advice would be to only have people in to your home to work if it is absolutely necessary and to be mindful of what is essential work. For example, while a bad leak may need immediate fixing, getting a painter and decorator in to paint a white room green may not be and can be done at a later date.

It is always worth having a conversation with the tradespeople on the phone to make sure everyone is comfortable with the situation and will respect the social distancing guidelines.

More info for workers entering people’s homes can be found here.

Our conveyancing team is COVID safe

We are very serious when it comes to the health and safety of both our clients and our staff. We are currently operating remotely wherever possible. Where client meetings do take place in person, we strictly adhere to the COVID-19 guidelines.

Have questions? We are open as usual!

We are ready to provide you with a fantastic legal service and there are many ways for you to contact us!

Call us on 020 7928 0276, phone calls are operating as usual and will be taking calls from 9:30am to 6:00pm.

Email us on info@lisaslaw.co.uk.

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

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January 7, 2021
HRMC, Tax

Supreme Court overturns settled case law on limitation – Test Claimants in FII Group Litigation v HMRC

Written by Rosa Huang.

In the decision on Test Claimants in FII Group Litigation v HMRC handed down on 20 November 2020, the Supreme Court overturns decision of House of Lords in relation to the application of Section 32(1)(c) of the Limitation Act 1980, and unanimously allowed the appeal arising in the course of long-running proceedings known as the Franked Investment Income (“FII”) Group Litigation.

Background

The FII Group Litigation brings together many claims against the appellant, the Commissioners for Her Majesty’s Revenue and Customs (“HMRC”), concerning the way in which advance corporation tax and corporation tax used to be charged on dividends received by UK-resident companies from non-resident subsidiaries.

The respondents to the appeal are claimants within the FII Group Litigation whose cases were selected to proceed as test claims on certain common issues (“the Test Claimants”).

The Test Claimants seek repayment by HMRC of the tax wrongly paid, together with interest, dating back to the UK’s entry to the EU in 1973.

Under Limitation Act 1980, as a general rule, restitutionary claims for recovery of money must normally be brought within six years from the date on which the money was paid. In the meantime, Section 32 provides postponement of the limitation period in case of “mistake”. According to Section 32(1)(c), the limitation period for “action for relief from the consequences of a mistake” only begins to run when the claimant has “discovered the mistake” or “could with reasonable diligence have discovered it”.

In appealing to the Supreme Court, HMRC argued that Section 32(1)(c) only applies to mistakes of fact and not mistakes of law, or alternatively that the Test Claimants could reasonably have discovered the mistake over six years before their claims were first issued in 2003. Either way, HMRC contends that a proportion of the claims would be barred due to time limitations. HMRC invited the Supreme Court to depart from the decision on Deutsche Morgan Grenfell on the basis that it had been wrongly decided.

Judgment

The Supreme Court has confirmed that section 32(1)(c) of the Limitation Act 1980 (LA 1980) applies to claims for the restitution of money paid under a mistake of law. It has also ruled that time begins to run from when the claimant could have recognised that it had a worthwhile claim, not from when the true state of the law was established by a decision of a court of final jurisdiction. This is a remarkable departure from the settled case law, Deutsche Morgan Grenfell Group plc v Inland Revenue Comrs [2006] UKHL 49. The Supreme Court held that House of Lords for Deutsche Morgan Grenfell was wrong in tying the date when the claimants discovered or could with reasonable diligence have discovered the mistake to the date of a decision by a court of final jurisdiction.

Comments

As we can see from the above, the mechanical test of discoverability of “mistake” in Deutsche Morgan Grenfell was based on the date of a decision by a court of final jurisdiction. In overturning the decision made by House of Lords in this case, the Supreme Court replaced the mechanical test of discoverability with a new test based on the date when the claimant could have been aware that it had a ‘worthwhile claim’ sufficient to merit obtaining legal advice and commencing the preliminaries to issue a claim.

The Supreme Court’s unanimous decision to depart from Deutsche Morgan Grenfell is less surprising, this is because limitation periods shall apply regardless of whether substance of the claim is disputed, or whether there is in truth a well-founded cause of action.

In addition, the approach adopted in Deutsche Morgan Grenfell will lead to an illogical consequence that mistakes will not be discoverable by a claimant until after he has issued a claim on the basis of the mistake.

The correct approach therefore is that time under section 32(1)(c) begins to run when the claimant discovers, or could with reasonable diligence discover, his mistake in the sense of recognising that a worthwhile claim arises.

This new test is objective. “Reasonable diligence” requires claimants to “establish on the balance of probabilities that he could not have discovered the mistake without exceptional measures which he could not reasonably have been expected to take”. The burden of proof is on the claimant.

Have questions? We are here for you!

Lisa’s Law is open for business. We are ready to provide you with a fantastic legal service and there are many ways for you to contact us.

Call us on 020 7928 0276, phone calls are operating as usual and will be taking calls from 9:30am to 6:00pm.

Email us on info@lisaslaw.co.uk. Our caseworkers are tending to their cases with the same professionalism and efficiency as always.

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you:

https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more! There is no need for you to leave your house at all when dealing with us.

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The Importance of Frontier Worker Permits – What are they and who can apply for one?

The Brexit transition period is over, and with the start of the New Year we find ourselves stepping into some new terrain in terms of immigration, employment and family law. While these changes in policy and rules may seem daunting, we will keep you right up to date with all the important events and news in the legal world.

One such piece of information comes in the form of the new Frontier Worker Permit which will allow certain workers from EEA countries to come and work in the UK from 1^st January 2021, even when they still reside elsewhere.

Such a permit normally allows the relevant EEA workers to carry out work which is not allowed under the normal visitor route. It is of great significance, particularly to those who have always been travelling in and out of the UK to work, yet it has not been widely publicised, which we find somewhat surprising.

Who counts as a frontier worker?

A frontier worker is a person who is an EEA national, primarily resident outside the UK, who comes into the UK to work on a frequent basis. This work can be on an employed or self-employed basis. An example could be an Irish citizen who crosses the border into Northern Ireland to work, or a French national who comes over to England frequently to fulfil employment contracts.

What are the specific requirements?

People can only apply for a Frontier Worker permit if they are from the EU, Switzerland, Norway, Iceland or Liechtenstein, and they:

live outside the UK

have worked in the UK by 31 December 2020

have kept working in the UK at least once every 12 months since they started working here.

It is important that the applicant’s home address is primarily outside the UK. How they meet this requirement depends on how much time they have spent here since 1 January 2020.

To qualify for such status, applicants will normally have spent more than 180 days in total outside the UK over the course of any 12 month period.

However, if an applicant has spent 180 days or more in the UK within 12 months, they may still be eligible if, in that 12 month period, they returned to the country they live in at least either:

once every 6 months

twice in the 12 month period

They may still be able to apply if there are exceptional circumstances meaning they could not travel to their country of residence in this period, such as an illness or accident, or under the current pandemic.

Qualifying work

Applicants may be eligible as long as their work in the UK is ‘genuine and effective’. This means it must be more than small, one-off tasks, such as:

an interview

taking part in a one-off competition or audition

signing a contract

The Home Office has published guidance on what counts as genuine and effective work which you can find here.

While each case will be considered on its own merits some key points that the Home Office will look out for when assessing whether the applicants work qualifies for the permit are:

whether there is a genuine employer-employee relationship

whether there is an employment contract specifying the employee is required to carry out work in the UK

number of hours worked in the UK

frequency of work in the UK

level of earnings from activities in the UK

Evidence of the above will need to be provided during the application process.

What benefits does a frontier worker permit have?

The frontier worker permit has the following benefits:

To allow the worker to work and live in the UK

To enable the worker to have access to some benefits and services if eligible like healthcare

It is free, and the worker does not need to pay immigration health surcharge

It is normally five years and can be extended afterwards.

The permit has limits!

It is important to note that a frontier worker permit will not lead to settlement. EEA nationals who want to settle in the UK on a permanent should ensure they apply by 30 June 2021 for pre-settled status under the EU Settlement Scheme rather than using this route. For more information on the EU Settlement Scheme, check out our article here.

It also does not allow the worker to bring his/her family member into the UK. They will have to apply for other visas in order to come.

No time to waste!

While an EEA national who meets the criteria above will be able to continue to travel to the UK for work purposes until 30 June 2021 using their current original passport or national ID card, this will not be the case forever.

From 1 July 2021, in addition to their identity document, an EEA national must hold a (digital) frontier worker permit in order to enter the UK to work.

Considering the frontier worker permit has not been well advertised, people should be forgiven for not being aware of it. It is of great importance to many people whose livelihood depends on being able to travel to the UK. We are quite surprised that the Home Office has not done more to make the existence of this permit public knowledge.

Applicants interested in such visa must apply online.

Have questions? We are open as usual!

We are ready to provide you with a fantastic legal service and there are many ways for you to contact us!

Call us on 020 7928 0276, phone calls are operating as usual and will be taking calls from 9:30am to 6:00pm.

Email us on info@lisaslaw.co.uk.

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

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Lockdown 3.0 will not stop Lisa’s Law!

With the new lockdown announced last night many areas of our lives are put on hold but your legal matters are not one of them. Here at Lisa’s Law we are ready and waiting to provide you with a full range of legal services to the excellent standard that our clients have come to expect.

Ready to take your case:

As with the first two lockdowns, we remain open for business as usual. We are fully operational and our lawyers are ready to take on your instructions, from small matters to complex ones! Your voice will never go unheard.

Conveyancing continues:

It may come as a surprise to some that the buying and selling of property is unaffected by the new lockdown rules. This means viewings can still take place, estate agents and moving companies can still work, and we can still help you buy or sell property! It is business as usual here at Lisa’s Law.

We are at full strength:

We have specialist caseworkers in our ranks dealing in immigration, property, family law, litigation, business law, will drafting, probate services and more. If you have an enquiry, we want to hear it.

Many ways to contact us:

Lisa’s Law is open for business. We are ready to provide you with uninterrupted legal services and there are many ways for you to contact us.

Call us on 020 7928 0276, phone calls are operating as usual and will be taking calls from 9:30am to 6:00pm.

Email us on info@lisaslaw.co.uk. Our caseworkers are tending to their cases with the same professionalism and efficiency as always.

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you:

https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more! There is no need for you to leave your house at all when dealing with us.

Links to download below:

iPhone: https://apps.apple.com/us/app/lisas-law/id1503174541?ls=1

Android: https://play.google.com/store/apps/details?id=com.lisaslaw

Thank you and stay safe!

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More Guidance on the EU Settlement Scheme – Evidence, Information, and Qualifying Periods.

The EU Settlement Scheme is of great importance for a huge amount of people now that the effects of Brexit are right around the corner. For a full rundown of the scheme you can read our article: A Clearance of the Past? – How Can You Benefit From the EU Settlement Scheme?

In this blog we will be focussing on the latest guidance regarding providing extra evidence, the correct information you need to submit, and what to do if your qualifying period has been affected by COVID-19.

Extra evidence needed?

In some cases applicants will be required to provide extra evidence to confirm nationality or identity. This is usually a passport or national identity card. In cases where this is not possible due to factors outside the applicant’s control, there are alternative options. Similarly, personal tragedy or practicality issues may be taken into consideration during the application, especially if they are related to the coronavirus pandemic.

Let’s say that a person is unable to renew their passport as they have been unable to travel, or the embassy has had to close. This could be seen as a reason for that applicant to provide alternative evidence to a passport.

First, they would need to provide sufficient evidence as to why they cannot produce the preferred documents due to coronavirus public health restrictions. This could be evidence of an embassy closure, such as a letter from the relevant national authority, or a link to an official webpage.

They would also need to provide alternative evidence of their identity and nationality, or entitlement to apply from outside the UK. These can include:

documents previously issued by the Home Office

an expired passport or national identity card

an official document issued by the authorities of their country of origin or of the UK which confirms their identity and nationality

They will need to apply via a paper application form if they need to provide alternative evidence of their identity and nationality, or entitlement to apply from outside the UK.

The paper application form can be requested here.

Emails accepted where possible

The Home Office have specified that in some instances email can be used to provide evidence, but where this is not possible they will provide ample time for evidence to be posted. They also say they will take into consideration ‘any disruption to postal services or of any reason you may be unable to post documents such as time spent self-isolating.’

Continuous qualifying period affected?

The Home Office has confirmed that applicant’s continuous qualifying period will not necessarily be affected if they were impacted by coronavirus public health restrictions.

Let’s say for example, if the applicant had coronavirus overseas and could not return to the UK, or imposed travel restrictions meant they were absent from the UK for longer than planned (providing the period does not exceed 12 months).

Absences from the UK of up to 6 months in any 12-month period

Applicants who have been absent from the UK for no more than 6 months in any 12-month period, in either a single absence or multiple absences, the continuous qualifying period will not be broken regardless of the reason for their absence(s) and they will not have to provide additional information or evidence in support of your application.

A single absence from the UK of more than 6 months but not more than 12 months

Applicants that have been absent from the UK for a single period of more than 6 months, but not more than 12 months, during a 5 year continuous qualifying period due to being ill with coronavirus, and they were unable to return to the UK because they were ill or in quarantine, that absence will not cause a break in their continuous qualifying period.

Similarly, students who were studying in the UK but have had to remain in a different country due to coronavirus will not be punished for having a break in their continuous period.

Applicants who have been prevented from travelling due to coronavirus should provide a supporting letter with the application outlining the details and the dates they were ill or were in quarantine.

It is important to remember that normally only one single absence exceeding 6 months (but not exceeding 12 months) for an important reason in the 5-year continuous qualifying period is permitted.

More than one such absence is likely to be treated as having broken the continuous qualifying period regardless of the reason for it, including if they were prevented from returning to the UK because of coronavirus. This does seem quite harsh to us, because if the circumstances are truly out of someone’s control, why should they be punished?

Absence of more than 12 months

If an applicant does not have permanent residence status under the EEA Regulations or settled status under the EUSS, an absence from the UK of more than 12 months will normally interrupt their continuous qualifying period.

In these circumstances they will need to restart their continuous qualifying period by 31 December 2020 to be eligible for status under the EUSS.

Have questions? We are open as usual!

We are ready to provide you with a fantastic legal service and there are many ways for you to contact us!

Call us on 020 7928 0276, phone calls are operating as usual and will be taking calls from 9:30am to 6:00pm.

Email us on info@lisaslaw.co.uk.

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

Links to download below:

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Rental guidance updated! What do you need to know?

New guidance has been released for people renting property from a landlord, which attempts to give clarity to such tenants. This guidance must be provided to tenants who are in a shorthold tenancy which started any time after 1 October 2015.

The information is helpful to both the renter and the landlord, so it is well worth reading and being aware of the rights and responsibilities for each person. This article will focus mainly on the tenants’ perspective, but landlords can find plenty of information in our recent article here.

Tenancy and agreements

It is important to remember that when you enter into a tenancy with a landlord, you are essentially both entering into an agreement with each other. You will both have to keep up your own ends of the deal. The tenancy is there to protect you both and make sure you are getting what you agreed to when the arrangements were initially made.

The most important advice we can give is also the simplest: read through the contracts carefully before signing anything! If you are unsure about parts of the tenancy agreement, you can always ask us to check it over for you. Never feel pressured to sign anything you are not completely certain of.

Also, the landlord is obliged to give you a copy of the latest guidance for renters, so it is important that you read through it and understand it.

Initial things to consider

Before jumping right in to renting a property, there are some key things to have at the front of your mind.

Firstly, you should be thinking about the deposit situation. Since June 2019, the amount a deposit can legally be has been capped. If the total annual rent is less than £50,000, the maximum deposit is 5 weeks’ rent. If the annual rent is £50,000 or above, the maximum deposit is 6 weeks’ rent. If the property is left in a good condition and there has been no major issues, once the tenant leaves, this deposit must be refunded.

You should also be aware of any unnecessary charges being asked of you. There is no legal cost for a landlord allowing you to view the property, or setting up a tenancy agreement. A charge to reserve a property is permitted but it must be refundable and it cannot equate to more than 1 weeks’ rent.

You must have the correct documentation ready, as landlords will need to check your identity, immigration status, credit history and in some cases your employment status. They will also check if you have the right to rent in the UK. More information on this can be found in our article: Right to Rent Checks – What Landlords and Tenants Need to Know

Is everything above board?

You need to be sure that the landlord you plan to rent belongs to an accreditation scheme. Accreditation schemes provide training and support to landlords in fulfilling their legal and ethical responsibilities. Your local authority can advise you about accreditation schemes operating in your area.

You must have the name of your landlord and an address in England or Wales where the landlord will accept service of notices, in writing. Landlords are obliged to provide you with this information and the rent is not ‘lawfully due’ until they do so.

You should also ask, if the property is a flat, if the landlord is the owner or leaseholder of the flat. Following this, ask whether the freeholder, for example the owner of the block, has agreed to the flat being let out. If the landlord has a mortgage ask whether the mortgage company has agreed to the letting. This is of great importance. The landlord may not need the freeholder’s consent but, if there is a mortgage, the lender’s consent certainly be needed. You must be aware that you may have to leave the property if the landlord does not keep up the mortgage payments, in this situation. Do not be caught out!

Alternatively, you can rent from a letting agent, so long as they are a member of a redress scheme. You should check which independent redress scheme the agent is a member of in case you have an unresolved dispute.

It is vital, in this day and age, to be aware of potential scams. Never rush into making a decision and always consult legal advice if you feel unsure about anything.

Length of tenancy

The usual length of a tenancy agreement is either 6 or 12 months, however a longer contract can be arranged with the landlord if they are willing. Alternatively, you may be offered a weekly or monthly assured shorthold tenancy which does not last for a fixed period. Even with those tenancies, however, the landlord must allow you to stay in the property for a minimum of 6 months.

Who pays for what?

When it comes to bills such as electricity, gas, water and council tax it is usual for the tenant to pay. However, this is not always the case. This must be specified within the agreement to avoid any confusion.

Inventory

An inventory should be taken and agreed upon before you move in, so that when it is time to leave the property it is clear what belongs to the tenant and what was already there when they moved in. Photos should be taken, the inventory should be agreed upon by both landlord and tenant, and then it should be signed by both parties. Both should keep a copy for future reference.

Permitted Fees

The following is a list of the permitted fees that landlords and agency can legally charge tenants. If it is not on the list, you do not have to legally pay it. This is taken directly from the Government guidance:

Legally chargeable fees include:

rent

a refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above

a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent

payments associated with early termination of the tenancy, when requested by the tenant

payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy

payments in respect of utilities, communication services, TV licence and Council Tax

a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement

All other fees, including the following, are banned:

viewing fees, any charge for viewing the property

tenancy set up fees, any charge for setting up the tenancy or contracts

check out fees, any charge for leaving the property

third party fees, any charge for anything that is done by someone other than the landlord or tenant but that the landlord must pay for

Once you have moved in…

This is the time to keep up your end of the deal. Rent should be paid on time and without any hassling from the landlord. You should be considerate of neighbours and the surrounding area of the flat. You cannot take in a lodger or sublet without first getting the landlords permission to do so.

It goes without saying, it is your responsibility to look after the property. If you want to make repairs or do any decorating you must first ask the landlord. If there are repairs that need doing, you must always inform the landlord. In most cases, it will be their responsibility to get it fixed. Failure to report the need for repairs could be a breach of your tenancy agreement. In extreme circumstances there may be a risk to your deposit if a minor repair turns into a major problem because you did not report it.

If you or the landlord want to end the tenancy

As a starting point, it should be noted that if your tenancy has a fixed term, neither the landlord nor you will be able to end the tenancy, unless the term has run out or the other party agrees. What we talk about below is where the fixed term of the tenancy has expired.

If the landlord wants to end the tenancy:

You must be given notice before you are asked to leave the property. In most cases, currently, this notice period is 6 months. However, it can vary from case to case. More information on this can be found here.

If you want to end the tenancy:

Your tenancy agreement should say how much notice you must give the landlord if you want to leave the property. One month’s notice is typical. If you want to leave the property, you must give notice to your landlord in writing – make sure you keep a copy of the document and a record of when it was sent.

The full guidance for renters can be found here.

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