Some good news for landlords
SOME GOOD NEWS FOR LANDLORDS
In the current economic climate, landlords need to look to all available sources for recovery of rent arrears. This includes former tenants and guarantors.
Increased burden on landlords…
Last year, the Court of Appeal made this process a lot more difficult, requiring landlords to serve notices under section 17 of the Landlord & Tenant (Covenants) Act 1995 on former tenants and guarantors during rent reviews, even though the current tenant was not in arrears (see our Client Alert: More Red Tape for Landlords).
…was a “remarkably silly” decision…
Fortunately, the House of Lords has restored some common sense by overturning the Court of Appeal’s “remarkably silly” decision. The issue of non-payment of back-rent following a review can now safely be dealt with by serving any necessary section 17 notice once the review has been concluded. Landlords do not now have to serve a series of protective notices throughout the (often lengthy) rent review process, although whether a landlord can actually secure any increase on review given the state of the market is another story altogether.
…but still a timely reminder
Landlords are reminded of the need to act quickly when tenants do fall into arrears - section 17 notices must be served on any former tenant or guarantor within 6 months of the arrears accruing. Failure to do so means the former tenant or guarantor cannot be required to pay up. In addition, the notice must state if the amount owing might increase and a second notice must be served within 3 months of the amount being finalised.
The information contained in this document is a general summary and commentary on recent legal evelopments and does not constitute advice. Specific legal advice must always be taken in relation to any of the issues raised in this alert.
For further information please contact our Property Litigation Team at our Nottingham office: Freeth Cartwright LLP, Cumberland Court, 80 Mount Street, Nottingham NG1 6HH
Tel: 0115 936 9369
Fax: 0115 859 9600
Email: craig.downhill@freethcartwright.co.uk Back to the top