Sit up and take notice: Landlord and Tenant Act 1987

Peta Dollar and Sarah Thompson-Copsey present the first of two sets of FAQs on the Landlord and Tenant Act 1987. This week’s focus on the subject of notices Q. I act for a seller which served section 5 notices on its long leaseholders six months ago and received no response within the specified two-month period. I now realise that section 5 notices should also have been served on a number of Rent Act tenants living in the same building. Do I need to re-serve the long leaseholders at the same time? A. Assuming that the Rent Act tenants comprise more than 10% of the total number of qualifying tenants in the building – section 5(5) of the Landlord and Tenant Act 1987 (the Act) states that the landlord is treated as having complied with section 5 if it has served section 5 notices on not less than 90% of the qualifying tenants (or all but one, where there are 10 or fewer tenants) – there is no express legal requirement to re-serve the original notices. But where section 5 notices are served on different qualifying tenants on different dates, and as a result the period for service of an acceptance notice will end on different dates, the latest of these dates will apply to all the qualifying tenants. In other words, the long leaseholders on whom you served notices months ago will still be able to respond to those notices up to the last date on which the Rent Act tenants can respond to their notices. This means that the original section 5 notices that were served on the long leaseholders will have specified the wrong date for service of an acceptance notice, which could be confusing for them. For this reason, you may wish to consider re-serving the section 5 notices on the long leaseholders. If you specify a period of two months in the Rent Act tenants’ notices, and you do not receive an acceptance notice from the requisite majority of qualifying tenants by the end of that two-month period, then – regardless of whether or not fresh notices have been served on the long leaseholders – your client will have a period of 12 months, beginning at the end of that two-month period, in which to sell the property to a third party (on the same terms as those set out in the section 5 notices and at no lower price). If, of course, the terms of the proposed disposal have changed since the original section 5 notices were served, then fresh notices will have to be served in any event. Q. I am based in London, and need to serve section 5 notices on a building in Penzance, Cornwall. Should I serve the notices by recorded delivery? What happens if a notice gets returned undelivered? A. Section 54(1) of the Act provides that any notice required to be served under the Act must be in writing and may be served by post. This incorporates section 7 of the Interpretation Act 1978, which states that, where statute authorises a notice to be sent by post, there is a rebuttable presumption of service effected “in the ordinary course of post”. If a notice is returned undelivered, however, the presumption will be rebutted. We have always recommended service by hand delivery – give the trainee a day out at the seaside! An affidavit of service can be sworn when they return to the office, and you will have irrebuttable proof that service was effected and the date on which this occurred. However, this approach has been questioned by the recent Court of Appeal decision in Newcastle Upon Tyne NHS Trust v Haywood [2017] EWCA Civ 153. Note that the notices only need to be addressed to “the tenant” at the relevant flat, and can be posted through the main letterbox of the building, there is no need to put them through individual flat doors: Henry Smith’s Charity Trustees v Kyriacou [2001] Ch 493. Q. Is it OK for each qualifying tenant to serve a separate acceptance notice on the landlord, or must there be a single acceptance notice from the requisite majority of qualifying tenants? If the latter, must all the qualifying tenants sign? A. Section 6(3) of the Act defines “acceptance notice” as meaning a notice served on the landlord by the requisite majority of qualifying tenants. This implies that a single notice must be served. However, section 6(c) of the 1978 Act states that in any Act, unless the contrary intention appears, words in the singular include the plural and vice versa. Nothing in the Act specifically prohibits the service of more than one acceptance notice, and a landlord would be unwise to ignore multiple acceptance notices on the grounds that there are more than one, given the generally pro-tenant stance of the courts when dealing with notices under the Act. That said, the qualifying tenants would obviously be best advised to serve a single acceptance notice if possible. Section 54 of the Act requires an acceptance notice to be in writing and to specify the names of all the persons by whom it is served and the addresses of the flats of which they are qualifying tenants. There is no requirement for the notice to be signed. Q. I need to serve a section 5 notice on one of my tenants. I know that they have granted an assured shorthold tenancy to a sub-tenant, who is living in the flat. To which address should I send the notice? The tenant has asked me to copy all rent and service charge demands to her nephew in Hong Kong, as he looks after her affairs. Do I need to copy the section 5 notice to the nephew? A. In the recent case of Oldham Metropolitan Borough Council v Tanna [2017] EWCA Civ 50; [2017] PLSCS 33, the Court of Appeal held that any notice may be validly served if served on the registered proprietor of an interest in land at the address(es) given at the Land Registry. If your tenant’s leasehold interest is registered at the Land Registry, you may serve on that/those address(es). In addition, Oldham suggests that you should serve on any other addresses that you have for the tenant, which presumably will include the flat address and the nephew’s address in Hong Kong. Alternatively, section 196 of the Law of Property Act 1925 is automatically incorporated into every lease (unless there is a contrary indication) and permits service at the demised premises (sections 196(5) and 196(2)), addressed to “the tenant” (section 196(3)). Note, however, Newcastle Upon Tyne NHS Trust. The problem with serving notice on the nephew is that if several notices are served in respect of the same tenancy, there is a doubt as to the date on which notice has been given (and therefore the date from which the minimum two-month period for service of an acceptance notice runs). To avoid this, the notice should only be copied to the nephew, making it clear that it is only a copy of the actual notice. Finally, there is no obligation under the Act to serve anyone other than the qualifying tenant, so if no notice (or copy notice) is served on the nephew, there is no default under the Act. Q. My client bought the freehold of a block of flats last week and now wants to grant a lease of the roof to a telecoms company. Does my client have to serve section 5 notices? A. A lease of the roof is a relevant disposal for the purposes of the Act: see Dartmouth Court Blackheath Ltd v Berisworth Ltd [2008] EWHC 350 (Ch); [2008] 2 EGLR 141. There is no relevant exemption, as this is not a lease of a single flat. Accordingly, section 5 notices must be served before the lease is granted, otherwise the landlord commits a criminal offence. However, only the landlord at law can serve valid section 5 notices, and until your client is registered at the Land Registry as proprietor of the freehold interest, the seller remains the landlord at law. Any section 5 notices must therefore be served by the seller: see Renshaw v Magnet Properties South East LLP [2008] 1 EGLR 42 (enfranchisement) and Stodday Land Ltd v Pye [2016] EWHC 2454 (Ch); [2017] EGLR 1 (notice to quit in relation to agricultural tenancy). Presumably the grant of the lease will also have to wait until your client is registered at the Land Registry, although there is no reason why they cannot enter into an early agreement to grant the lease when registration is completed. Normally, an agreement for lease would be a relevant disposal under the Act but, in this case, the agreement would be entered into by a party who is not the landlord of the qualifying tenants at law and, as a result, section 5 notices would not need to be served. Arguably, the lease could then be completed pursuant to that agreement, within the exception provided by section 4(2)(i) (a disposal in pursuance of a contract binding on the landlord), still without section 5 notices needing to be served, although this would be a fairly blatant avoidance of the spirit – if not the letter – of the Act. The second part of this FAQs series will appear on 29 July and will focus on issues relevant to buyers. Peta Dollar and Sarah Thompson-Copsey are freelance trainers and writers and authors of Mixed Use and Residential Tenants’ Rights – The Landlord and Tenant Act 1987 and Leasehold Enfranchisement. Read part two of this FAQ on the Landlord and Tenant Act 1987 >> Photo © Rex/Shutterstock