Shorthold Tenancy & Solicitor’s Negligence

Professional negligence solicitor, Emma Slade, warns again of the perils that lie in wait for solicitors who dabble in unfamiliar areas of the law.

When I had finished writing the last blog, I suddenly remembered a claim that I did quite a few years ago which was similar but different, if you know what I mean?

I will tell you a bit about the law first; get that out of the way, before getting on with the story.

The Housing Act 1988 brought in two new types of tenancy agreement: an Assured Tenancy and an Assured Shorthold Tenancy.  An Assured Tenancy could be for any length of time provided the property was the tenant’s main home, the landlord did not live there and rent was paid.  To get a tenant out of the property, the landlord has to prove “grounds” for getting rid of him: non payment of rent, breach of the tenancy agreement etc.  An Assured Shorthold Tenancy (AST) is slightly different.  It is for a minimum period of 6 months and at the end of the tenancy, the landlord simply has to serve a two month notice which terminates the tenancy.  If the tenant does not get out, the landlord can issue proceedings in the Court called Accelerated Possession Proceedings.  It is simply a paper exercise with no need to attend court.  Provided the Court is satisfied that the tenancy is an AST, the tenancy has expired and proper notice has been served, the Court must give a possession order.

When this all came into force  it was a bit of a revelation as the previous types of tenancy had not been easy beasts to handle.  There was only one fly in the ointment.  In order to create an AST, before the tenancy was entered into, the landlord had to serve a Notice on the tenant telling him that the tenancy he was about to enter into was an AST.  It was called a section 20 Notice.

Section 20 notices caused huge problems; define “before” for starters.  Is it the day before?  Or immediately before signing? The Housing Act 1996 (which came into effect on 1st October 1996) amended this and dispensed with s20 Notices for ASTs.

So that was the law at the time that I took on this case.

My client – who I will call Bob – and his wife had a very large house in Stockport which, following all their kids leaving home, had become too large for them.  Rather than sell up, they split the house into three and created three flats, the upper two flats they intended to let out.  This was in early 1996.

They found two tenants. Michael had the upstairs flat and they entered into an AST with him.  Tenants for the middle floor came and went until eight months or so before I was instructed, Irina, an Eastern European immigrant moved in.  Her English was pretty poor and she did not know anybody locally so Bob and his wife took her under their wing.  They did all they could to help her.  Michael they did not particularly like, thinking him a bit of an oddball, but he had been staying in the flat for a number of years by now and they had never had any trouble from him.  He always paid his rent on time, was quiet and was never a disturbance.  Odd, but a model tenant.

Irina tried to make friends with him but unfortunately, on one occasion, Michael misunderstood her overtures.  It frightened Irina and she ran downstairs to see Bob and his wife, in tears.  After that, whenever she met Michael, despite the fact that he did not do anything or in any way try to harm or frighten her (something which she later admitted to the police), she became upset and relied more and more upon Bob and his wife.

This went on for a little while and Bob and his wife became increasingly worried for their young protégé.  One evening, Irina was particularly upset and Bob and decided that that young whippersnapper, Michael, had to go.  His presence was upsetting his little family. 

The next day, he took the AST to the firm of solicitors which had drafted the document to obtain possession.  Unfortunately, the solicitor who had acted was newly qualified so was not aware of the requirements of a s20 Notice, Michael’s AST having been entered into before 1st October 1996.  The possession claim failed as she had not attached a copy of the s20 Notice.

Bob came to me at that stage as he could not understand how they had lost.  He wanted the firm of solicitors to pay his legal costs for the wasted application.  I looked at it and realised why the claim had been thrown out.  I asked Bob for a copy of the s20 Notice that had been served.  He didn’t know what I was talking about so I told him what a section 20 Notice was.

A few days later, a s20 Notice arrived through the post.  Looking at it though, it was dated after the AST had been entered into: it was therefore invalid.  Michael did not have an AST, he had an Assured Tenancy and as by Bob’s own admission, he was a model tenant, it would be almost impossible to get rid of him.  I called Bob up and told him the bad news.  He told me he would look through his documents again.

A couple of days later, I got another s20 Notice through the post.  It was identical to the first one – even the signatures – but it looked like Bob had been playing with the tippex.  The new date and the missing dots of the line underneath gave it away!  Bob denied it at first but ultimately, he agreed that the notice could not be relied upon.

In desperation, we called for the original solicitor’s file to see if the notice was in there.  It wasn’t but the brilliant thing about it was that there was no evidence that one had ever been drafted or sent to Michael or even advice to Bob that one had to be served.  Nothing.  Nada. 

Bob was ‘lucky’.  We could now sue the solicitors for professional negligence and for Bob’s losses.  As I said, Michael had been a model tenant so we could not get him out for breaching his tenancy agreement.  In the end, Bob had to purchase Michael’s security of tenure.  Michael therefore got a nice lump sum to go and move elsewhere and Bob was compensated by his solicitors for all his losses. 

Once the negligence settlement was reached, I got chatting with the litigation solicitor on the other side.  It seemed that Bob had originally instructed his conveyancing solicitor to do the AST.  The conveyancer did not have any experience in Landlord and Tenant law but thought “how hard can it be?”  Turns out, a lot harder and a lot more expensive than he had anticipated.  The moral is very clearly “don’t dabble in things you don’t understand!”

But that is not the end of the story.  Bob and his wife had gone through all this to try and help their young friend.  Ironically though, after it was all over, Irina decided Stockport was not for her and decided to return home.  I believe Bob and his wife had also had enough so sold the house and bought a bungalow close to their daughter.

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