It’s not demanding to be noticed 02 November 2020
It’s not demanding to be noticed
Names, addresses, demands and notices: rent possession under the Housing Act 1988
The issue
Is a notice seeking possession served under section 8 of the Housing Act 1988 which bears the name and address of the landlord’s agent (not of the landlord itself) valid? This was the question before the Court of Appeal in Prempeh v Lakhany [2020] EWCA Civ 1422.
The facts
Mrs Lakhany had caused to be served a s.8 notice which was signed (and dated) by her agent and which contained the name and contact details of her agent. The s.8 notice relied, as the majority of such notices do, on grounds related to rent arrears and the tenant’s rent payment history, namely grounds 8, 10 and 11 in Schedule 2 to the 1988 Act.
The statutory framework
By way of reminder, in outline:
- Ground 8 is engaged where both at the date of service of the s.8 notice and also at the date of the possession hearing a requisite minimum amount of rent (as statutorily prescribed, depending on the intervals at which rent is payable) is lawfully due and unpaid.
- Ground 10 applies where some rent lawfully due is unpaid at the date of service of the s.8 notice and at the date when the possession claim is brought.
- Ground 11 bites where the tenant has persistently delayed in paying rent lawfully due, whether or not rent is in arrears when the proceedings are begun.
Given that the prescribed form of s.8 notice (Form 3 in the Assured Tenancies and Agricultural Occupancies (Forms) (England) Regulations 2015, SI 2015/620, as amended):
(1) indicates by dotted lines where it should be filled in;
(2) indicates by dotted lines that the form be completed by the insertion of a signature, name, address and telephone number of the person completing it;
(3) contains instructions in italics to the person completing the form, indicating what needs to be filled in; and
(4) moreover, states in those instructions that the form is "To be signed and dated by the landlord or licensor or the landlord's or licensor's agent (someone acting for the landlord or licensor)…."
it might have been thought that the answer to the question posed in the case is fairly obvious.
The form-based argument
But, undeterred, the tenant argued that, although signature by an agent is expressly permitted, Form 3 demands that the agent must give not only their name and address but also the landlord’s name and address.
Having regard to the content and layout of prescribed form, the Court of Appeal had little difficulty in disposing of that particular argument, holding that it was sufficient for the name and address of the person signing to be provided, which person might be the landlord’s agent. [Paragraphs 49 & 57]
The court remarked that there are no dotted lines in the prescribed form indicating where the supposedly additional details (if required) are to be provided. Further, there is no gap or space on the form for that information (i.e. the name and address of the landlord, as well as that of the agent signing the form) to be inserted. Also, there are no instructions to the effect that the name and address of both landlord and agent must be written on the form. [Paragraphs 50 & 51]
The ‘demand’ based argument
However, legal ingenuity being what it is, in the end it required no fewer than 60 paragraphs of judgment for the Court of Appeal to confirm that, in a case where the s.8 notice is rent-related, completion of the form by the provision of the landlord’s agent’s details is acceptable.
This was because for Ms Prempeh it was argued that Mrs Lakhany’s s.8 notice was a ‘demand’ for rent for the purposes of section 47 of the Landlord and Tenant Act 1987 and, as such, invalid unless it gave the landlord’s own name and address, not that of her agent (Beitov Properties Ltd v Martin [2012] UKUT 133 (LC)).
Section 47 provides that where any written demand for rent or other sums payable under a tenancy is given to a tenant which consist of or include a dwelling, the demand must contain (amongst other things) the name and address of the landlord. More particularly, it states that if this condition is not fulfilled, then any part of the amount demanded which consists of a service charge or administration charge shall be treated for all purposes as not being due before the relevant information is given.
Against this legislative background counsel from Ms Prempeh contended that a s.8 notice which relies on grounds 8, 10 and 11 comprises an implicit request for payment, backed by the threat of possession proceedings in the event of non-payment, and so constitutes a ‘demand’.
The Court of Appeal rejected this submission too. In doing so it made a number of observations, several of which are of general importance to practitioners dealing with rent-related possession claims under the 1988 Act.
The following points emerge from the judgment:
(A) 'Demand’ is an ordinary English word, not one with a technical legal meaning, and on general principles should be given its ordinary meaning. [Paragraph 31]
(B) Although it may be easier to recognise than to define, whatever its precise scope a ‘demand’ entails some communication from landlord to tenant requiring payment. [Paragraph 32]
(C) A s.8 notice which relies on grounds 8, 10 and 11 does not on its face say anything about requiring payment. [Paragraph 32]
(D) The argument that such a notice nonetheless contains a veiled demand for payment confuses what the notice does and what the practical consequences may be for the tenant. [Paragraph 33].
(E) What the notice (in the prescribed form) does is to inform the tenant of the matters required by s.8(3), namely; (i) the landlord’s intention to bring possession proceedings; (ii) the grounds on which reliance will be placed; (iii) the earliest date for proceedings; (iv) when the notice will expire if proceedings are not brought. [Paragraphs 33 & 34]
(F) Nothing in the prescribed form of notice demands, requests or even invites the tenant to do anything (except to make contact and seek legal advice). [Paragraph 34]
(G) Moreover, quite apart from the preceding point, the notion that a s.8 notice impliedly demands payment, failing which the landlord will take the tenant to court (i.e. that payment is required in order to avoid proceedings) is undermined by consideration of the statutory grounds for possession – because even if the tenant does pay the rent arrears specified in the s.8 notice, there is no guarantee that this will avoid proceedings (or, indeed, a possession order). [Paragraph 35]
(H) In the case of ground 8 – a mandatory ground for possession – the relevant threshold amount of arrears which must be established to be outstanding both at the date of the notice and at the date of the hearing need not be the same arrears on the two occasions (and often will not be, as where the tenant is always in arrears but continues to make payments which are credited against the oldest arrears, so that the particular sums unpaid varies over time). [Paragraph 37]
(I) Indeed, provided the minimum amount of arrears exists at both of the two reference dates, ground 8 is made out even if, unusually, the tenant has discharged all the arrears (or, more likely, brought the arrears to below the threshold level) in the interim. [Paragraph 38]
(J) Therefore, a ground 8 s.8 notice is not to be read as saying, “Pay me the arrears or I will take you to court”. It is saying, “If at the hearing you still owe more than the requisite amount of rent, I will seek possession under ground 8”. It is not a demand. [Paragraph 39]
(K) So far as ground 11 is concerned, it does not actually require there to be any arrears at all any any given time, when the possession proceedings are started. All it requires is that the tenant has persistently defaulted in paying rent. [Paragraph 36]
(L) From this it follows that in a ground 11 case there need be no arrears at the date of service of the s.8 notice itself. (The court did not express a conclusion on this point but indicated that this view, expressed in Woodfall on Landlord and Tenant, para.24.064, seems “probably right” – a view with which the author concurs.). [Paragraph 36]
(M) It would thus be very odd if a ground 11 notice were a ‘demand’ for rent where there happened to be some rent arrears at the date of its service, even though the existence of such arrears is (it seems) not a precondition of ground 11 itself. [Paragraph 36]
(N) In any event, ground 11 is not defeated by the tenant paying all the arrears before the proceedings are begun (or before the hearing). [Paragraph 36]
(O) Therefore, it is not possible to interpret a ground 11 s.8 notice as conveying the message “Pay up or I will take you to court”, for the true message is “I will take you to court because you have persistently defaulted in paying rent”. It too is not a demand. [Paragraph 36].
Therefore, a s.8 notice based on rent arrears is not a demand for rent within the meaning of s.47 of the 1987 Act.
Analysis
The decision of the Court of Appeal is welcome on several fronts.
(1) It applies an ordinary meaning to the word ‘demand’.
(2) It keeps distinct (a) demands for rent and (b) notices seeking possession. In so doing it preserves the orthodox view. Most practitioners would, I suggest, have been very surprised to be told that a s.8 notice invoking grounds 8, 10 and/or 11 amounts to a rent demand.
(3) The case serves as a useful general explanation/reminder about the scope of the statutory grounds for rent-related possession claims.
(4) It presents in particular a clear warning to tenants in ground 8 cases that all that matters is the state of the rent account at the two key dates; if the threshold is then met, the fact that at other times the account has been in a healthier condition counts for nothing.
(5) Above all, it reads and applies the prescribed form of s.8 notice in an unfussy and practical way, avoiding pitfalls for the unwary. Indeed, the fact that such notices are intended to be served by lay people was a consideration which resonated with the Court of Appeal. [Paragraphs 55 & 56]. To require the inclusion of details additional to those indicated in the instructions on the form and in circumstances where the form itself contains no obvious place for them (or even room for their insertion) would undoubtedly have been a recipe for many invalid notices. Fortunately, this has been avoided.
Finally, it may be noted that the Court of Appeal left open the following points:
(a) Whether ground 10 can be defeated by the tenant paying all the rent arrears stated in the s.8 notice immediately on receipt of the notice (provided there are (fresh) arrears at the date the proceedings are started). [Paragraph 38]
(b) Whether, in relation to ‘demands’ to which s.47 of the 1987 Act does apply, the consequence of non-compliance (i.e. a failure to state the landlord’s own name and address) is that: (i) it renders not due only any service charge or administration charge so demanded, having no impact at all on ‘pure’ rent (this being based on the literal terms of s.47, contrasted with s.48 in the same Act); or (ii) despite not expressly saying so, it nevertheless prevents the demand for rent as having effect e.g. for the purposes of s.8 of the 1988 Act. [Paragraphs 44-46]
As for the ground 10 point, the position is arguable, but the point may be more theoretical than troublesome in practice because:
(i) If relatively low level arrears have been fully discharged, most landlords will gladly accept that.
(ii) If further arrears arise, a fresh s.8 notice can always be served.
(iii) The likelihood of a tenant continually being able to clear the arrears in full upon receipt of a series of s.8 notices is remote.
(iv) If a tenant were to seek to play the system (and engage in a dangerous game of cat and mouse in which it deliberately allowed arrears to accumulate and waited until receipt of a s.8 notice before paying them), it would surely be at risk of a ground 11 s.8 notice.
In relation to the 1987 Act issue, as the Court of Appeal stated, neither result is satisfactory – and so the point is best left to be dealt with if and when a case arises in which it actually matters.
Conclusion
For present purposes, the main takeaway is that a rent-based s.8 notice is not a ‘demand’ for rent and will be valid whether it is given by the landlord or the landlord’s agent (so long as the relevant details of the person serving it are included in the notice).
MARTIN DRAY
2 November 2020
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