Thursday, 31 July 2008

Peabody Trust v. Reeve revisited..

Right, the process of getting up to date begins!

I never got round to writing a post at the time this decision was handed down, but I have had occasion to review the precise contents of the judgement, and oh deary me!

My major bone of contention is that "Mr G.Moss QC" sitting as DJ that day knew what he wanted as the final result but got there in a rather round about way and this has had some serious aftershocks on the rest of the social housing world.

Let me explain myself, although I haven't seen the full tenancy agreement etc, in paragraph 3 of the judgment it says as follows:-

"3. Clause 5 of the "General terms" of the Claimant's standard form of tenancy agreement reads as follows:-

"Altering the Agreement

5 (a) With the exception of any changes in Rent this Agreement may only be altered by the agreement in writing of both the Tenant and the Trust.

(b) The terms of this Agreement may be varied by the Trust by a notice of variation served on the Tenant and the provisions of section 103 of the Housing Act 1985 shall apply to this agreement as if this tenancy were a secure tenancy provided that in no case shall the variations be such as to be properly regarded as creating a new tenancy."


Now lets look at the clause in a sensical fashion, in 5(a) it states that the excluding Rent any changes can only be altered by agreement in writing between both parties. So how can 5(b) allow for a variation via the s103 procedure? Notice the inconsistency there? Or is it just me? (Its not by the way, other more experience solicitors have noted that point too)

OK, I don't know who drafted the T.A originally, so my apologies for this next bit, but that piece of shoddy drafting has landed the rest of us in a serious mess in regards unilateral or not variations of tenancy agreements.

That's my first real problem with the case, my second problem is paragraph 53 and Moss DJ. Paragraph 53 states the following:-

" Moreover, it seems to me that even if clause 5(b) stood by itself, it is such a sweeping and one sided provision, that even if it had been clearly and unambiguously set out and explained, I doubt whether it could be held to be fair in terms of the criteria set out in the Regulations."

But, surely, clause 5(b) directs the reader to s103 which is the law!? Is our learned DJ saying that the law, as it stands at present, is wrong? That it is unfair on the tenant?

So what does this mean in practice? Where an RSL wants to vary the service charge for whatever reason and the tenant is under an Assured Shorthold Tenancy it would probably be a case of terminating it and giving the tenant a revised AST? But what about situations where there are rent arrears? Effectively re-issuing the tenancy will make it difficult to recover the rent arrears under the present tenancy.

And, the problems associated with changing the tenancy agreements of the tenants under SPOs, outright possession orders and the like, shouldn't be overlooked - since the obvious effects of a new TA or variation are ever present.

Then what about secure tenancies? They rely on s.103 as an implied term via statute. Has Peabody v. Reeve actually managed to cast doubt on its operation?

Those are my initial thoughts, in a rather rushed fashion which I must apologise for. I am going to try to revisit this (again) in the future when things have quietened down, and when the Peabody Trust appeal...they better do!!



Nearly Legal said...

As far as I understand it, the issue is that s.103 only applies as statute to secure tenancies. The tenancy agreement attempted to import s.103 as a contractual term, which is what was dismissed as sweeping etc..

RSLs can't rely on s.103 as 'the law', because for them, it isn't. So the terms of s.103 were purely contractual and, as not set out in the contract in writing, they fell.

But I could well be wrong on that

Ethan said...

But Moss's paragraph 53 states that even if it had been set out in the tenancy agreement, it would still fall foul of the regulations on unfair terms...maybe I am adding to much weight to certain parts of that paragraph??

Its been a while lol, I just hope that Peabody consider an appeal..