Tolerated Trespass – A Legal Anomaly

1. Tolerated Trespass – A Legal Anomaly Where We Are and How We Got There: A Brief Overview By Mary Martil of Marsons Solicitors For CIH South East Region On 20th June 2008

2. How They Arose • A judicial creation • Arising out of the wording of the Housing Act 1985 • Court’s interpretation of the meaning of that wording in the context of the real world

3. How They Arose • Housing Act 1985 s.82(2) Where the landlord obtains an order for the possession of the dwelling-house, the tenancy ends on the date on which the tenant is to give up possession in pursuance of the order s85(2) On the making of an order for possession of such a dwelling house on any of those grounds, or at any time before the execution of the order, the court may (a) stay or suspend the execution of the order; or (b) postpone the date of possession, for such a period or periods as the court thinks fit.

4. How They Arose • Burrows v Brent LBC [1996] 1 WLR 1448 HL, Lord Browne-Wilkinson - “The parties did not intend to create a new tenancy…but only to defer execution of the order so long as Miss Burrows complied with the agreed conditions.” - “During the period between the date specified by the order for the giving of possession and the date on which the order is executed, there is a period of limbo…”

5. How They Arose – Burrows v Brent • “The agreement can and should take effect in the way the parties intend i.e. it is an agreement by the landlord that, upon the tenant complying with the agreed conditions, the landlord will forbear from executing the order…” • “I think it is fair to characterise the former tenant as a trespasser whom the landlord has agreed not to evict – a “tolerated trespasser” – pending either the revival of the old tenancy or the breach of the agreed conditions.”

6. Effects • Loss of Tenant’s Rights • Repairs • Assignment/mutual exchange • Succession • Right to buy • Consultation • Absence of Tenant’s obligations

7. Legal Conundrums • When does a new tenancy arise? • Burrows v Brent LBC [1996] – cannot be right to impute to the parties an intention to create a legal relationship such as a secure tenancy….unless the legal structure within which they made their agreement forces that conclusion.

8. Legal Conundrums – When does a new tenancy arise? • Swindon BC v Aston [2002] EWCA Civ 1850 – the SPO contained a term that the judgement shall cease to be enforceable when the debt is satisfied, the debt had been paid, the order was no longer enforceable, nor was it possible for the old tenancy to be revived, subsequently, the occupier continued to pay the weekly charges, the landlord sent him notices of increase of rent, he was threatened with action for non-compliance with tenancy conditions and new terms and conditions were sent out to him. - “Viewed objectively, the conduct of both Landlord and tenant was only sensibly referable to the existence of a new tenancy.”

9. Legal Conundrums – When does a new tenancy arise? • Newham LBC v Hawkins [2005] EWCA Civ 451 – following clearance of the arrears and continued dealings between the parties, would a new tenancy naturally be deemed to arise? - There was no term in the SPO to the effect that it would cease to be enforceable once the debt was paid, the order remained capable of being enforced, the original tenancy remained capable of being revived, there were no dealings that showed the parties had intended to create a new tenancy.

10. Legal Conundrums – When does a new tenancy arise? • Lambeth LBC and HSH v O’Hara [2005] EWCA Civ 1010 – the arrears due under the order were not cleared, but the tolerated trespasser was sent various letters referring to “rent”, notice of variation of tenancy conditions and various notices of increase of rent, all standard documents sent to occupiers regardless of status. He was also paid a decoration allowance. Was that sufficient to create a new tenancy?

11. Legal Conundrums • Helena Housing Ltd v Pinder [2005] – following a stock transfer, a rent card was sent to the tolerated trespasser. Was this sufficient to grant a new tenancy?

12. Legal Conundrums – When does a new tenancy arise? - No – “It is not enough that the facts are consistent with a new tenancy, they must actually force that conclusion.” In both cases, the landlord’s conduct was consistent with an intention to increase mesne profits and show continued “forbearance” to a tolerated trespasser.

13. Legal Conundrums • When does the tenancy end? • Upon the breach of the terms of the SPO? • Upon the date for possession specified in the SPO? • Harlow DC v Hall [2006] EWCA Civ 156 • Created 100,000s tolerated trespassers • PPOs developed to avoid the problem

14. Legal Conundrums • Does it apply to assured tenancies? • S82(2) Housing Act 1985 – where the landlord obtains an order for possession of the dwelling-house, the tenancy ends on the date on which the tenant is to give up possession in pursuance of the order • No specific equivalent provision in the Housing Act 1985

15. Legal Conundrums – Does it apply to assured tenancies? • White v Knowsley Housing Trust [2007] EWCA Civ 402 • Section 5(1) – “an assured tenancy cannot be brought to an end by a landlord except by obtaining an order of the court…” • Section 9(3) – on granting a stay or suspension, a court should impose conditions “with regard to payment.. of arrears… and rent or payments in respect of occupation after the termination of the tenancy (mesne profits)…”

16. Legal Conundrums – Does it apply to assured tenancies? • It would be inconsistent with the principles of the landlord and tenant law for a contractual tenancy to be said to continue after the tenant has lost the right to possession • If the order specifies a date when the tenant is to give up possession, the tenancy must end on that date • PPOs • Appeal to House of Lords pending

17. A Guide to Tolerated Trespassers

18. Creating a Tolerated Trespasser • Wording on court order • Breach of SPO – PO • Information to Customers • Breach letter

19. What Tolerated Trespasser means in mhs • Payments cannot be backdated • Revival of Tenancy • No Succession Right • Repair Obligations

20. Loss of Protected Status • No Right to Buy • Higher rent increases - 10% increases

21. Impact of the Change • Use and occupation charges only – Mesne Profit • Other tenancy breaches • No intention of creating a new tenancy inadvertently

22. Other Factors to Consider • On clearance – new Tenancy – Assured Shorthold (periodic) Trial Tenancy • Refusal to sign up

23. Overview • Impact on long term arrears cases • Few revive via Court Process • Numbers of Tolerated Trespassers

24. Tolerated Trespass – A Legal Anomaly Looking Ahead: The Housing and Regeneration Bill

25. The Housing and Regeneration Bill • Lord Justice Buxton in White v Knowsley HT – “Those problems are a matter for law reform…The courts are not equipped for that task” • DCLG consultation paper August 2007 • Section 298 and Schedule 10 to the Housing and Regeneration Bill

26. Phasing Out Tolerated Trespassers • Possession orders made after commencement of the Act will not bring tenancies to an end – tenancies will continue until eviction • Tolerated trespassers who are occupying the property as their home will automatically be granted a new tenancy on the commencement of the Act

27. Possession Orders Made After Commencement • Amendment to HA 1985 (secure tenancies), HA 1988 (assured and assured short hold tenancies), HA 1996 (introductory and demoted tenancies) • The tenancy cannot be brought to an end by the landlord except by obtaining an order for possession and the execution of that order • The tenancy ends when the order is executed

28. Exception • If the possession order was made before the commencement date but, the tenancy has not yet ended pursuant to the order, the new provisions will apply. • i.e. PPO cases where no date for possession yet fixed.

29. New Tenancies Arising on Commencement • A new tenancy will be treated as arising provided • The property is the TT’s only or principal home, and has been so since the original tenancy ended • The former landlord is still entitled to let the property • The parties have not already entered into a new tenancy

30. Nature of the New Tenancy • The new tenancy will be of the same type as the original tenancy • It will have the same terms and conditions, subject to changes in rent/other terms and conditions.

31. Nature of the New Tenancy Note that • Arrears of charges due whilst a TT will be rent arrears under the new tenancy • The possession order that ended the original tenancy, and any subsequent orders, will be treated, so far as practicable, as if they apply to the new tenancy • The original tenancy and the new tenancy are to be treated as the same continuous tenancy for the purposes of succession and right to buy (qualification periods and discount).

32. Additional Provisions • In secure tenancy and assured tenancy cases, the court will have a wider power to discharge or rescind possession orders • In some proceedings, including disrepair claims, the court will have the power to treat the original tenancy and the new tenancy as the same continuous tenancy.