The Department's proposals
The main proposals for specific amendment are as
follows:
Agreements to exclude security of tenure/surrenders.
Currently, if a landlord and tenant wish to agree a lease which
excludes security of tenure, or if the tenant is to agree to surrender
a lease, they must make a joint application to the court for its
approval. The proposal would remove the requirement to apply to
the court, and introduce new procedures designed to ensure that
the tenant becomes aware of the consequences of excluding security
of tenure, or of agreeing to surrender the lease at some time
in the future.
Statutory renewal procedures.
To help speed up the process, there would be a new requirement
for landlords who are not opposing renewal to set out their proposals
for a new tenancy in the termination notice. The requirement for
a tenant to serve a counternotice in response to the landlord's
termination notice would be abolished. Landlords would be permitted
to apply to court to renew or to terminate the tenancy, and the
court would have new powers to take a case all the way to its
conclusion without the need for new applications. There would
also be changes to the time limits for applications to court.
Ownership and control of businesses.
The proposed order would bring the Act up to date in respect of
the definition of the business entities which enjoy rights under
the Act or are subject to its provisions.
Notices requiring information.
The Act lays down procedures enabling landlords and tenants to
obtain information from each other which they would need in order
to operate renewal or termination procedures. The proposals would
make these more effective by requiring the parties to update information
provided for six months, by catering for parties transferring
their interests and by introducing more effective enforcement
procedures.
Interim rent. Interim
rent is the rent which may be ordered by the court while the tenancy
continues after the contractual term date. The proposed order
would change the rules on interim rent with the aim of making
the system fairer.
Compensation. At present
a tenant may claim compensation from the landlord where the court
has refused the grant of a new tenancy as a result of misrepresentation.
The proposed Order extends this to cover cases where the tenant
is induced not to apply to court or to withdraw an application
because of misrepresentation. There are also proposals to rationalise
the rules for compensation payable in certain cases where the
landlord successfully opposes renewal of the tenancy.
Other changes. The proposals
include a number of other changes, for example:
- ensuring that a tenant wanting to end a continuation
tenancy does not to have to give more than the required three
months notice, and confirming the present position whereby a tenant
does not have to give notice if quitting the premises before the
end of the contractual term;
- enabling the courts to order the grant of new
leases up to a maximum period of 15 years, instead of 14 at present.
This is more compatible with modern leasing patterns, where leases
tend to have three or five yearly rent reviews;
- facilitating use of the procedures where there
is a single lease but several different landlords.
The Committee's conclusions
Broadly speaking, the proposals appear to be a most
welcome attempt to improve the working of the Act, and the Committee
is content that they be proceeded with. However, the Committee
recommends two changes to the proposals.
Firstly, the Committee is not satisfied that all
necessary protection is maintained in respect of the procedures
for excluding security of tenure and for agreements to surrender.
The Committee recommends a minor change in those procedures to
ensure that the tenant has the best possible chance of appreciating
the significance of agreeing to exclude his rights under the Act.
(See paragraphs 38 to 50 of the Report.)
Secondly, the Committee was concerned that the form
of one of the schedules to the order may result in the payment
by the tenant, in certain circumstances, of an unnecessary fee.
The Department has agreed to make an amendment to the schedule
concerned before bringing back a draft order for second-stage
scrutiny. (See paragraphs 201 to 202 of the Report.)
The Department also intends, when a draft order is
laid for "second-stage" scrutiny, to bring forward one
further amendment, intended to guide the courts on the interpretation
of certain contractual arrangements where a tenant sublets a property.
The Committee will consider this point further when it considers
the draft order.
