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You are here: BAILII >> Databases >> United Kingdom Journals >> Susan Bright &amp Geoff Gilbert, <I>Landlord and Tenant Law: The Nature of Tenancies URL: http://www.bailii.org/uk/other/journals/WebJCLI/1996/issue3/crabb3.html Cite as: Susan Bright &amp Geoff Gilbert, <I>Landlord and Tenant Law: The Nature of Tenancies

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Susan Bright & Geoff Gilbert, Landlord and Tenant Law: The Nature of Tenancies

Oxford: Clarendon Press 1995 lxxx + 763 pp. ISBN 0 19 8763492 SB £ 22.99.

Reviewed by Letitia Crabb

Copyright © 1996 Letitia Crabb.
First Published in Web Journal of Current Legal Issues in association with Blackstone Press Ltd.

"An exclusive concentration upon legal aspects of the relationship [of landlord and tenant] makes it difficult to understand the role that letting plays within our society, and the social, political and economic goals that the legislation in this area is seeking to promote and protect."(p 1)

The structure of the book is unusual: there are lengthy chapters on 'Policy' (Chapter 2) and 'The Lease as Property, as Contract and as a Public Law Relationship' (Chapter 3) and these chapters provide the context in which the substantive material is set. Thereafter the material is considered by issue (Entering Into The Lease, Protecting The Relationship, Property Management, Rent, Change of Tenant and of Landlord, Ending the Relationship and Changing the Tenant's Interest). These issues are explored by examining the application of common law principles (particularly those derived from property and contract) and the regulatory codes relating to residential, commercial and agricultural tenancies. Readers interested in just a particular code will find it scattered. The text is liberally supported by statistical tables and also by extracts from a range of sources representing numerous jurisdictions. There is a very extensive bibliography.

Chapter 2, 'Policy', is designed for lawyers who are not familiar with arguments on housing policy or social science terminology or structure. I doubt whether anyone who listens to the news or reads a newspaper is completely unfamiliar with the basic arguments but it would probably come as a surprise to many that there is such a depth of learning behind those arguments. The challenge therefore is to deepen the understanding of lawyers in the field by presenting a detailed account of these policies and their operation, in an objective and concise way. Policy in relation to residential, commercial and agricultural property is considered. The observation that the willingness of institutions to invest has been a critical factor in the commercial sector has been amply demonstrated since the publication of the book by the extraordinary genesis of the Landlord and Tenant (Covenants) Act 1995. This is contrasted with the more limited role of institutional investors in the agricultural sector, where the main policy considerations have always been promotion of good husbandry and the long term productivity of the land by affording tenants security and compensation for improvements, while at the same time ensuring an adequate supply of tenancies for young farmers by avoiding over regulation. It is with housing policy, however, that this chapter is primarily concerned and the issue is presented starkly by juxtaposition of two quotations by way of introduction:

"[The] crucial and ultimate test of the effectiveness of housing policy is the condition of the worst-housed families in our communities...." (Carver, Houses for Canadians, 1948, p 123; cited in van Vliet, International Handbook of Housing Policies and Practices, 1990, p 320)

"Provided the majority of the population remains reasonably well-housed, the living conditions of the poor - increasingly marginal to the labour market and with little or no organized political voice - may remain a topic of limited governmental interest...." (Harloe, Private Rented Housing in the United States and Europe, 1985 cited in van Vliet op cit, at p 122)"(p 20).

The authors draw a distinction between social objectives and the policies adopted to achieve them; if housing for all is the objective, then there are a number of policies which can be adopted to achieve that objective. Whether housing for all is the objective, or, if it is, how it sits with other social objectives and their policies is the source of uncertainty and complexity. The authors put forward the argument that government intervention in the housing market should not be dignified with the name 'housing policy':

"...it is arguable that British governments have never had a housing policy as such, but instead have focused on promoting particular forms of tenure rather than ensuring an adequate supply of housing...."(p 26).

Tenures according to some are "mere consumption labels" of limited utility in providing homes. Therefore it may not be useful to describe owner-occupation, a mere tenure, as a housing policy:

"for the issues faced in relation to housing have little to do with the type of tenure of the occupant. The major problem is an inadequate supply of low-cost housing"(p 26).

Juggling with other types of tenure is similarly of limited utility in dealing with this problem. This point is well made. Whether there is a true housing policy in this country or not, for convenience, it is referred to as such. A theme that is clearly presented at the outset and consistently followed through concerns the misconception that there is in the United Kingdom "a private sector that is wholly dependent on the market, while alongside it, and competing with it, there is a public sector wholly dependent on state intervention" whilst, in reality, "both private and public sectors receive state support and use private institutions to meet their needs"(p 21). The authors examine the extent of state subsidy in the respective sectors and demonstrate that subsidies to owner-occupiers had increased since 1980 (when council tenants received 50% of all housing subsidy) to, in 1989, nearly double that enjoyed by council tenants and that they still remain higher. It is pointed out that the prevalence of owner-occupation which is a feature of most Western European countries, Australia and North America is connected to the belief that owner-occupiers vote conservative (a belief upon which the authors throw some doubt) and also to the tendency to identify it with democracy. In Britain it has become "a goal for which to strive, almost as part of being British"(p 34). Home ownership has become almost as cheap as renting because of tax incentives and the added bonus of a capital gain (the latter surely not certain these days?). The authors are of the view that owner-occupation is at saturation point, cannot meet the needs of all the population, and should cease to receive the dominant share of the subsidy.

Renting, on the other hand, has become a second class tenure notwithstanding that it represents 30% of the market and caters for the poor, the young and those who, of necessity, move around. The authors consider policy towards private renting, housing association renting and local authority renting pointing out that all political parties agree that the role of the rented sector should be expanded. The ability of private sector renting to expand sufficiently is questioned because of its inherent instability. If owners cannot sell, then they will rent out their properties: once the market improves they will sell and the property will be lost to the private rented sector. Renting has therefore to be made more attractive to the property owner. There is a clear account of the Business Expansion Scheme and its limitations and of the failure of de-regulation via the Housing Act 1988 to halt the decline of the sector; it is suggested that incentives to rent out property should take the form of tax concessions to landlords to ensure a better return on capital.

There is an interesting history of housing associations followed by an explanation of the political trends responsible for their destiny, in the twenty-first century, as the largest providers of rented accommodation. Because of the difficulties they face in attracting private investment, the inadequacy of government subsidy and lack of development expertise the authors consider that it will take 100 years for them to become the major provider unless they take over local authority housing stock and tap into existing local authority expertise (p 46). It is made clear that the modern housing association is a product of Mrs Thatcher's aversion to local authorities and while the authors seem to have come to terms with the shape of things to come, it could be that they mourn an age, swept away by the tide of owner occupation, when relatively well subsidised local authorities developed and managed good quality housing stock for the needs of their own community without wholesale government interference. The discussion of policy towards local authorities is very worthwhile explaining the extent, nature and effect of government interference in local authority housing: the Housing (Homeless Persons) Act 1977, the Tenants' Charter, compulsory competitive tendering, reduced subsidies leading to higher rents, the Right to Buy and restrictions on new building. The result has been local authorities with an ever smaller and poorer housing stock and the role of a 'welfare landlord' responsible for housing only those with priority need. Chapter 2 exposes many of the consequences in the housing field of the social and political theories current in the last 15 years. In this stimulating chapter the authors rightly raise doubts whether those theories and the legislative framework to which they gave birth are adequate to face the challenge of housing the poor in the future.

Chapter 3 pursues the idea of a lease as property, as a contract and as a Public Law relationship. The authors regard the bedrock of the present day landlord and tenant relationship as contractual:

"The decision in Hussein v Mehlman [1992] 32 EG 59 was based on the fact that a lease is in essence a contract and there is a tide of cases giving pre-eminence to the contractual nature of leases and playing down their proprietary aspects."(p 90)

The authors consider that aspects of leases which cannot be reconciled with contractual principles require explanation. Not everyone would agree that that view strikes exactly the right balance, but the examination of the law from that perspective is nonetheless rewarding. The features exhibited by the lease which may account for it being treated "differently from other contracts" are reviewed: the fact that it disposes of an interest in land (but not permanently); that it may last longer than many contracts; that it is in part executory; that the tenant has an asset which he/she is entitled to use, protect and dispose of; that inequality of bargaining power may arise from the scarcity of land; that statute may add to the tenant's protection; that leases are a form of investment; that they are, sometimes, the means of providing a home (pp 70-72). This list is drawn on in the subsequent detailed discussion in order, where possible, to justify the proprietary aspects of leases. Thus a property bias, rather than a contractual bias, is found preferable in a number of areas, for example, service of notice to quit by joint periodic tenants (p 91) and privity of estate (p 97). The wider implications of the recognition of leases as contract rather than property is illustrated by reference to developments in the USA. Public regulation of leases via the implication, by the judiciary, of terms from housing codes (see Javins v First National Realty Corporation 428 F 2d 1071 (1970)) is made much more acceptable by regarding the lease as a contract comparable to other consumer contracts (p 103). To stress the nature of a lease as property is to invite opposition to public regulation on the basis of interference with rights of private property. The lease as a contract opened the door to the lease as a public law relationship. This is contrasted with public law control in the UK which has largely been a matter of legislative provision rather than judicial intervention. The extent of public regulation in the UK is seen as indicative of its nature as a public law relationship.

The contract/property relationship is explored first. Remedies for breach come in for detailed consideration: first, those which are peculiar to the landlord and tenant relationship, namely Distress, Re-entry and Forfeiture. No case is made against the Law Commission's recommendation (Law Com No 194, 1991) that distress be abolished but, consistent with the theme of the book, it is noted that those who would justify its retention could do so on 'property' grounds, namely, that unlike an unpaid seller of goods the unpaid landlord is probably not free simply to cease supply and treat the estate as at an end. There is an interesting and fruitful discussion of relief against forfeiture and why it is appropriate in relation to leases and not in relation to provisions for termination in other types of contract. The view that it is only appropriate in contracts "involving the transfer of proprietary or possessory rights" (Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1983] 2 AC 694) is challenged. It is suggested that the underlying reason for the intervention of equity was "the desire to prevent injustice, due to a landlord taking advantage of a trivial or easily remedied breach" (p 77). This leads the authors to question on the one hand, whether the jurisdiction should be limited to leases and on the other whether commercial and residential leases should continue to be treated in the same manner (ibid). It is noted that the Law Commission proposals on Termination Orders (Law Com No 142, 1985; Law Com No 221, 1994) would reinforce the existing differential treatment of leases.

The availability of contractual remedies in the leasehold context is considered next. The development of the lease is charted: from an executed contract for an interest in land, for which the only remedies likely to be required in the future would be those which protected the tenant's possession and the landlord's rent (quiet enjoyment, non-derogation, forfeiture, distress), to the modern view of a lease as a contract, still executory in important respects, and calling therefore for the application of remedies of a contractual nature. The implications of National Carriers Ltd v Panalpina (Northern) Ltd [1981] 1 All E R 161, Hussein v Mehlman (supra) and the Law Commission's recommendations on Termination Orders (supra) receive detailed consideration. There is an interesting examination of the possibility, on acceptance of repudiation, of recovering damages not only for pre-repudiation breach but also for loss of the unexpired term (subject to the duty to mitigate) (p 87, citing Highway Properties Ltd v Kelly, Douglas Ltd (1971) 17 DLR (3d) 710 and Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 57 ALR 609). This is contrasted with the landlord's position on forfeiture. Forfeiture and repudiation are contrasted in another respect: a landlord cannot be made to forfeit but in some circumstances the innocent party to a repudiation can be forced to accept repudiation and claim damages, subject to a duty to mitigate (White & Carter (Council) Ltd v McGregor [1962] AC 413). The authors question why:

"the landlord [should] be able to sit back and claim rent rather than seek to reduce his losses?"(p 89)

In the field of statutory regulation, the uncomfortable relationship between the developing contractual remedies and the traditional property ones is highlighted: can statutory restrictions on forfeiture be read as applying to termination by repudiation? The issues are presented with force and balance. The impact of contractual principles outside the area of remedies is assessed. The state of the law relating to notices to quit by joint tenants, certainty of terms and term, enforceability against third parties, the lease/licence divide, privity of estate and continuing liability is reviewed. The unseemly hustle which produced the Landlord and Tenant (Covenants) Act 1995 deprived the authors of the opportunity to include its provisions but not from noting the appropriateness of a preference for property principles in this particular area.

These early chapters of the book express themes which are re-encountered in the course of the subsequent chapters on the substantive law. Throughout, the law is examined as an expression of principle and the principle is given a critical context reflecting policy issues and the hybrid nature of the lease. The personal view of the authors is prominent, as it must be in a book of this type, but so also are those of other writers. The reader is given a clear appreciation of the arguments and the freedom to choose. Chapter 5 'Entering into the Lease', deals with formalities, as one would expect, and does so with commendable clarity and economy. Most of this lengthy chapter is, however, devoted to other issues which may arise at this stage of a transaction: allocation of properties in the different sectors (including homelessness), information about tenants' rights and the contents of leases. Chapter 6 'Protecting the Relationship' sets out the relationships giving rise to protection under the statutory codes, dealing separately with private sector rented property, local authority rented property, commercial property and agricultural land. Comparisons are drawn between the sectors and experience in other jurisdictions is examined. In relation to commercial property, the authors set out the history of legislative controls, drawing on extracts from Leasehold Committee Reports, and they examine the purpose and scope of the protection and proposals for reform. Chapter 7, 'Property Management', deals with: the condition of property, particularly housing stock; repairs and improvements; user; insurance; estate management; service charges; compulsory competitive tendering; information, consultation, participation and management; and resolving disputes. The content of other chapters is briefly indicated in the Introduction. In all cases the text is characterised by fresh juxtapositions of material which throw new light upon the issues.

It is impossible to do justice to a work of this magnitude in the context of a book review. It is an exceptionally rich resource of ideas which deserves a place in the library of any landlord and tenant lawyer and it will be especially useful in teaching. A new approach of this sort will take time to become established - it is suspected that most courses are structured by sector and also that there is a tendency for lawyers to specialise more in one field than another. The presentation of the book has some drawbacks which deserve a mention: the treatment of the material involves a degree of repetition (particularly in Chapter 2 'Policy') and the flow of the text is sometimes impaired both by the number and length of the quoted extracts and the incorporation of quite unwieldy references. These are clearly minor matters which do not detract from the scholarly achievement which this book represents. It is a very thoughtful and thought-provoking work which amply achieves its aim of placing the law in its social, political and economic context.

Bibliography

Law Commission No 194 (1991) Landlord and Tenant, Distress for Rent.

Law Commission No 221 (1994) Termination of Tenancies Bill.