On Wednesday, a couple of conundrums landed on the desk of the 7 people that constitute the Safer Renting posse.
Both concerned cases where our partner council EHOs had served prohibition orders on properties, with an effective date two weeks away but where curiously the occupants didn’t want to move out, despite the dreadful conditions.
Not because they have a predilection for living in slums but because low income limits choices. How do you relocate when you can’t afford it and in an environment where your average landlord, concerned they will fall foul of Right to Rent regulations, limits the pool of possible alternatives to the kinds of people who don’t care about regulations as long as cash is put in their pocket and nobody asks difficult questions?
The EHOs had served the notice to protect the occupants, meaning that if the landlords don’t comply with the terms of the prohibition order then the council could be prosecuted and placed on a banning order, and the tenants could pursue them for a Rent Repayment Order.
A fairly straightforward legal scenario — as the drafting of legislation so often suggests — but what happens when, as here, the landlord could be put in breach by the tenant’s refusal to cooperate, rather than the landlord’s?
Once again, real life throws us a curve ball and a question from the team that I couldn’t answer:
“When the council serves a prohibition notice on a property, what happens to the tenancy as a legal entity?”
Which then begged the further question: “How do we advise the tenants on the next steps?”
S1 of The Law of Property Act 1925 tells us that a tenancy is a form of ownership of land. It represents an interest in land in a way that a licence does not, which is why council and housing association tenants can do mutual exchanges and why tenancies pass down to family members upon death of the tenant. Even death doesn’t end a tenancy — so what about a Prohibition Order?
I delved into our library of law books and surfed the usual round of reliable housing law blogs but couldn’t find a single easy answer, so I did something I’ve never done before: I posted the question on Linkedin, and this is what I found out about it. Thanks to all who helped paint the final picture.
First off, the prohibition order does not, indeed cannot, end the tenancy.
The Housing Act 2004 tells us that essentially, although upon commencement of the Prohibition Order the tenancy still survives, the type of tenancy becomes irrelevant. The landlord can ask the court for a possession order and will get one.
There is a helpful case over on Nearly Legal from earlier in 2019 on this very point (See Note 1) where Croydon Council served a Prohibition Order and housing benefit was suspended as a result, leading to rent arrears. The landlord was then able to obtain possession through the Section 8 notice route.
The tenant argued that as Section 33 had kicked in, thanks to the Prohibition Order, the tenancy was thereby converted to a contractual one, not an Assured Tenancy. Section 8 had therefore been the wrong notice to serve, and possession should be set aside.
Permission to appeal was refused, with the court saying that the Court of Appeal had already put that argument to bed in a previous case (Aslan v. Murphy, 1989) and that whilst Section 33 enabled landlords to get possession due to a hazardous premises, it did notstipulate how possession should be sought– just that possession would be granted.
The possession proceedings had been successful, the ultimate aim of vacating such dangerous conditions having been achieved regardless of the legal technicalities over the type of notice that should or should not have been served.
So far so good, but this then brought up a further question. “What happens next for our tenants”?
If we know that the landlord still has to obtain possession through the courts in order to comply with the Prohibition Order and can’t simply use it as an excuse to illegally evict, (the usual response), what do the EHOs do while the landlord is in breach of the Order whilst evicting the tenants?
The answer came back via emails I had sent out to various EHOs and housing lawyers of my acquaintance.
No action will be taken as long as the landlord is following due process and seeking possession to comply with the order, leading straight away to yet another question:
“What then happens if the landlord doesn’t initiate possession proceedings”?
The answer to that is back in Section 35 of the Housing Act 2004, the plain English version of which tells us that if a landlord does not seek possession against the tenant upon commencement of a Prohibition Order, the council can prosecute them for obstructing the process and therefore failing to comply with the order
If the landlord ignores it and continues to rent the property out, or indeed, as is not uncommon, replaces the tenants with new ones, the council can serve a notice on the landlord under the EHOs old favourite, Section 235 of the 2004 Act, requiring the landlord to provide evidence showing what they have been doing to comply with the order.
Failure to do so, or to provide false information will then lead to a further fine.
So, is that it? Not quite.
Section 39 of the Land Compensation Act 1973 also has to be considered, which places a duty on the local authority which has served the Prohibition Order, to ‘do its best’ to assist the displaced tenants in securing alternative accommodation.
This isn’t a homelessness duty, covered by Section 175 Housing Act 1996, whereby a person is homeless if the property is unreasonable to occupy. Clearly if property conditions are so bad as to warrant service of a Prohibition Order, the homelessness unit would have a hard time arguing against a homelessness determination.
Section 39 is a separate duty, not under the homelessness provisions, which also provides for a concomitant duty on the authority to provide compensation to the tenants beginning at £6,100 for the council having made them homeless.
This is something that Safer Renting will be listing as a recommendation in our upcoming report on the Shadow Private Rented Sector, to amend the Land Compensation Act.
The way we see it, if a landlord lets a property deteriorate to such an extent that a Prohibition Order is needed, then they should pay that compensation, not the local authority.
So that’s the upshot. Thanks to a variety of EHOs and lawyers we now know that:
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A Prohibition Order does not end a tenancy, only the specific type of tenancy.
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A landlord is still required to obtain possession through the courts.
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The authority will not take further action while the landlord is following due process but can fine them if they don’t initiate proceedings.
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Once a Prohibition Order has commenced the authority is under a duty to assist the tenants, regardless of priority need issues.
We got there in the end but the nuances in procedures that we discovered clarifying this one, single issue also serve as a reminder to critical voices who naively think that any landlord enforcement matter is just like handing out a parking fine and I didn’t even get onto the appeal processes available to a landlord when a prohibition order has been served.
Notes
https://nearlylegal.co.uk/2019/04/prohibition-orders-and-ending-tenancies
