Changes in the air
One thing about spending your working life with your nose in the PRS dirt is that you can spot things coming before many other people.
You see trends developing in their early stages by subtle changes in the nature of the complaints being referred over that let you know something is rotten in the state of Denmark Street.
Clauses in contracts
In the past year, I have seen an increase in lettings contracts containing clauses that the occupiers are not permitted to allow access to local authority officers without first consulting the agents. It started with the odd one and now they are quite common.
The reason is quite obvious, back in the day, when I started out, property licensing didn’t exist and a local authority’s powers weren’t as far-reaching as they are now, particularly post Housing and Planning Act 2016 and Housing Act 2004 and, mistakes are all too easy to make since the commencement of the Deregulation Act 2015.
A point I have been banging home at the several landlord’s forum events I’ve spoken at in 2018.
An enthusiastic amateur landlord can’t afford to bumble their way through anymore. Lack of knowledge can end up costing more than paying out for training.
Until a couple of years back, Rent Repayment Orders weren’t de-rigeur either and for those of a dodgy persuasion, the last thing you want is a council officer on your doorstep, digging into your finances and business dealings, that make Donald Trump’s business methods look ethical.
I was wondering how the rogue fraternity would respond to this new development, once the risk permeated their skulls. I I believe the reaction is starting.
In two cases over the past two weeks, I have been shown lettings contracts by tenants, which when you drill down into the clauses that most of them don’t bother to read, you find entries that inform the tenant that in signing the agreement and taking on the letting, they sign away their rights to claim a Rent Repayment Order, should the opportunity arise.
These were contracts by two unrelated letting agents in two different London boroughs, so either two geniuses had the same idea at the same time or the little scamps are swapping notes. Two incidents do not a trend make, I grant you but my experienced old nose is definitely twitching.
Arguments at the ready
So I’m preparing my arguments in advance and pondering on a couple of things, firstly the notion of whether or not this would be an unenforceable clause and be considered unfair trading by both Trading Standards officers and the relevant property redress schemes.
Not a specialism of mine and happy to hear from experienced TS officers but I wouldn’t mind taking a bet on it. My understanding being that just as you can’t contract out of a statute, by, for instance, claiming that the landlord is not liable for repairs, I would imagine you can’t prevent someone from exercising statutory rights by simply putting it in a contract.
Or can you?
I raise this question being mindful of employment contracts that prohibit ex-employees from revealing business details or indeed contracts that prohibit council officers past a certain pay-grade from engaging in political campaign work but employment law is not housing law and two branches of law don’t always tally up.
Back on more familiar ground for me is the Protection from Eviction Act 1977. My main piece of legislation for nigh on three decades. The question front and centre for me is:-
Could such a clause be deemed harassment under that Act?
Sounds like a strange candidate but look at the wording of section 1 (3) (b):-
- (3) If any person with intent to cause the residential occupier of any premises—
- (a) to give up the occupation of the premises or any part thereof; or
- (b) to refrain from exercising any right or pursuing any remedy in respect of the premises or part thereof
Intrigued by this logic I grabbed the rather excellent guidebook on the subject, “Quiet Enjoyment” by Andrew Arden, Robert Brown and Sam Madge-Wyld to see what they make of this particular section and read this handy explanation:-
“The prosecution has to prove that the defendant had specific intent to achieve the stated effect
(give up accommodation or refrain from exercising any right/pursuing remedy) as distinct from
knowledge or belief of the likely consequences of his actions”.
Throwing in the useful case of Regina v. Hancock (1986) for good measure.
So where does that leave me?
With the couple of cases picked up recently where the contracts claim to sign away the tenant’s rights to claim an RRO?
It seems quite evident that the ‘Intention’ is to prevent the tenant from pursuing a remedy and that it isn’t simply that not claiming an RRO would just be the ‘likely consequence’ of having the clause inserted, so I think I’m on fairly safe ground arguing that the clause itself amounts to harassment, although I’ve never been presented with the opportunity before.
There is also the issue of how to approach it when the prospective tenant has merely been presented with the clause, because at that point they are not the residential occupier, required by the PFEA, whereas if they have signed it and taken up residence they are indeed the residential occupier that the PFEA was created to protect.
I’d be interested to hear other interpretations. I may well be missing an angle.
It is what I have advised the two letting agents concerned to be mindful of, I just have to see how far they want to push it and, if they dig their heels in, how I am going to advance the legal argument. I’m all up for a new approach but until we are past the stage of pushing each other in the chest while the first years are chanting “Fight, Fight”, I’ll proceed cautiously.
I’ve worked around law long enough to know not to jump in feet first without covering all angles, having been the subject of a Judge’s withering look on more than one occasion.