When is a tenant a tenant?
Introduction
This question was recently considered by the Court of Appeal in the case of Harlow District Council v Norman John Hall, in which the court considered the effect of a bankruptcy order on a residential tenancy and the meaning of the standard form of possession order used by the Court Service.
Mr Hall was a secure tenant of a property owned by Harlow District Council, who fell into rent arrears. Harlow DC commenced possession proceedings and obtained an Order on 12 January 2005.
The Possession Order provided that the Tenant "give the claimant possession of [the property] on or before 9th February 2005". It also provided that the order was not being enforced so long as the Tenant paid the outstanding rent arrears at the rate of £10.00 per week and the current rent.
The Tenant was in financial difficulties generally and lodged a petition for his own bankruptcy. On 10 February 2005 he was adjudged bankrupt.
On 28 May 2005 the Tenant applied to the Court to discharge the possession order. He argued that under section 285(3) of the Insolvency Act 1986 Harlow DC were not entitled to enforce the possession order because that amounted to obtaining a remedy against his property in respect of debts included in his bankruptcy.
The decision
The Court of Appeal held that the possession order remained in force.
Under section 82(2) of the Housing Act 1985, a secure tenancy ends on the date on which a tenant is required to give up possession. The Court found that it was clear from the wording of the possession order that the Tenant was required to give up possession by 9 February 2005. As a result, on the wording in the order, the secure tenancy ended on 9 February 2005.
This meant that Mr Hall no longer had any right in the property from that date. As a result, the bankruptcy order had no impact on the landlord's right to enforce the possession order.
The Court held that the making of a possession order was not a remedy in relation to the rent arrears debt in any event so the situation would have been no different if the bankruptcy order had been made before the date on Mr Hall was ordered to vacate possession.
Impact
In each case where this standard possession order has been made, tenants whom it was previously thought remained in occupation as tenants, are in fact merely tolerated trespassers from the date possession has been ordered. They will therefore have lost the ability to rely on their rights as tenants. This includes contractual rights under the agreement (to repair etc) and statutory rights such as the right to buy etc.
This case should also reassure landlords that, where the standard order is used, their tenants will not be able to defeat a possession order by subsequently declaring themselves bankrupt.
Ashfords has a specialist housing team, who would be happy to provide any assistance :
T: 01392 33 4114
E: housing@ashfords.co.uk
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
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