If there is one piece of landlord and tenant legislation that practitioners hate and tenants misunderstand it is Part 1 of the Landlord and Tenant Act 1987. There are many problems with it and these which generally arise from poor or contradictory drafting. More importantly it is unclear what exactly Parliament was seeking to achieve and a suspicion that its interpretation and implementation in practice goes beyond what was originally intended. The preamble to the Act states it is “an Act to confer on tenants of flats rights with respect to the acquisition by them of their landlord’s reversion”. If that was all the Act achieved in practice then the position would be relatively clear but many of the problems arise due to uncertainties about what types of transaction are actually caught by its provisions.
For example, there has long been uncertainty as to whether the grant of a lease of a shop or office within a residential building is a transaction which is caught by the Act. General practice is that such a transaction is ignored for the purposes of the Act but there is nothing in the Act which specifically says that notices should not be served in such a case. Similar problems arise in respect of the demise of parts of a building which may or may not have ever been common parts, additional areas which are to be incorporated into an individual flat or the demise of external areas or roof or airspace. Many such transactions appear to be caught by the Act yet it is unlikely that it was ever the intention of Parliament that the Act would apply in those circumstances.
There are also many inconsistencies and issues in relation to the various exemptions set out in Section 4 of the Act and no carve out where the freeholder is already an entity controlled by the tenants of the flats. Equally there is no logical reason why disposals cannot be entered into by a landlord conditional on compliance by the landlord with notice provisions.
While the addition of criminal sanctions for breach of the Act in 1996 certainly led to it not being ignored by landlords and practitioners such sanction is generally inconsistent with other areas of landlord and tenant law and appear to be an anomaly. This is particularly the case since there are apparently no recorded cases of criminal sanctions being applied and it is unclear who in practice might seek to prosecute in the case of a breach of the Act. It is considered that criminal sanctions are inappropriate in this case and instead consideration could be given as to whether certain transactions entered into in breach of the Act can be made or considered void, something that is not currently included within the legislation. The potential commercial loss that could arise from void transactions would still give the Act the teeth it needs to ensure it is applied and would be more consistent with landlord and tenant law.
Might the Law Commission now turn its attention to this poor piece of legislation?
Robert Barham, Partner and Head of Residential Transactions at Pemberton Greenish LLP
