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Housing Law - Suspended Orders have teeth after all!

By : Arthur Moore

In an action for possession of residential premises let under a secure tenancy, a suspended possession order is the most likely outcome where the arrears of rent are relatively modest. But are there other ways in which the tolerated trespasser may revive his tenancy, without going to Court? This possibility is discussed by Arthur Moore.

 

Revival of secure tenancies after breach of a suspended possession order

 

In an action for possession of residential premises let under a secure tenancy, a suspended possession order is the most likely outcome where the arrears of rent are relatively modest. The usual terms of suspension are that the tenant pay the current rent and a sum each week off the arrears. It is frequently the case that such Orders are broken by the tenants. It is clear that the tenant, in these circumstances, immediately becomes a tolerated trespasser . It is also clear that the tolerated trespasser may, at any time until the order for possession is executed against him, apply to the Court to revive his tenancy . But are there other ways in which the tolerated trespasser may revive his tenancy, without going to Court? In particular, could he and the local authority agree that the breach is waived, and that the tenancy revives? This was a possibility which had been left open by the decisions in Greenwich BC v. Regan (1996) 28 HLR 469. The matter has now been more fully considered in the recent case of Bradford City Council v. Marshall 27/4/01, CA.

Common law position

Waiver is based on the doctrine of election. It arises where a person is entitled to alternative rights which are inconsistent with one another. Where that person has knowledge of the facts giving rise to those alternative legal rights, and of his right to choose between them, and acts in a manner which is consistent only with one of them, he is said to have waived the other alternative right .

In the context of rights arising on breach of a contract, it is often said that the non-breaching party “waives the breach” if he does not pursue those rights. This is a useful shorthand, but not strictly correct. It is not the breach which has been waived, but only the rights arising as a result of it. The distinction is important.

At common law, where a landlord has the right of re-entry for breach of a lease, the landlord may choose whether to re-enter (and forfeit the lease) or not. If the landlord files and serves proceedings for possession, this will act as a notional re-entry, and the lease terminates at that moment. If, on the other hand, the landlord chooses not to re-enter and to continue as if nothing had happened, he will have waived his right to forfeit but not necessarily the right to rely on the breach for other reasons, for example, a claim in damages. The waiver is unilateral, and arises because the landlord has failed to assert that the tenancy is at an end .

In the context of s.85 of the Housing Act 1985, it is suggested that the common law principle of unilateral waiver cannot operate in the context of a breach of a suspended possession order. Where a suspended order for possession has been made and breached, the tenancy ends immediately on the breach by operation of law. The landlord has no choice as to whether to terminate the tenancy or not. There can therefore be no question of a waiver, in the common law sense, as the landlord has no choice to make. He does not elect between keeping the tenancy going and terminating it. The tenancy ends, whatever the landlord (or the tenant) may want.

Bradford v. Marshall

Prior to Marshall the position was that once the tenancy had come to an end, it could be revived, but only by consent between the landlord and the tenant. A unilateral act by the landlord could not, it seemed, be enough to resurrect the tenancy. The common law doctrine of waiver was therefore somewhat circumscribed .

This approach was emphasised in LB Lambeth v. Rogers 32 HLR 361. Mummery LJ approved the principles set out in Greenwich : that the landlord and the tenant in breach could agree to waive the effects of the breach. However, he went on to hold that, where the parties were in dispute over the agreement, there would have to be an application to the Court under s.85 HA ’85.

In Marshall, Chadwick LJ did not consider the common law position at all, but based his judgment on the decisions in Burrows, Regan and Rogers. He held that the passages in Regan which supported the proposition that the landlord and tolerated trespasser could revive the tenancy without recourse to the Courts had not, in fact, found support in Burrows or Rogers. He found that the agreement between the local authority and the tenant in Marshall, did not in itself revive the tenancy. He held moreover that the tolerated trespasser could not be in a better position where the landlord’s waiver had to be implied, than where there was an express agreement.

It is submitted that the conclusion is quite right. Both from the point of view of the common law principles of waiver, and on true construction of the cases, the doctrine of waiver can have no application in the context of secure tenancies and breach of a suspended possession order. The onus must be on the defaulting tenant to apply to the Court to revive the tenancy.

1. Thompson v. Elmbridge BC [1987] 1 WLR 1425

2. Burrows v. Brent [1996] 1 WLR 1448

3. Kammins Ballrooms v. Zenith Investments [1971] AC 850 per Lord Diplock.

4. Canas Properties v. K.L. Television services [1970] 2 QB 433

5. Greenwich v. Regan (1996) 28 HLR 469