A warning to new landlords taking over existing tenancies

housesBen Reeve Lewis takes a look at Section 3 of the Landlord and Tenant Act 1985.

I dealt with a case this week where section 3 came up as an issue.

What it is

It’s quite unusual for it to arise in housing advice land but it shouldn’t be, as the situation that triggers the legislation is a reasonably common one.

Section 3 of the LTA is the duty incumbent on a new landlord to tell the tenant that they are in fact the new landlord, having taken over from the old one, more often than not through purchase of the property.

Hardly surprising in an industry where there is a notice for just about everything. The requirements of section 3 are that a landlord has 2 months to inform the tenant that they are the new landlord and must provide their name and address.

Note that unlike Section 48 of the Landlord and Tenant Act 1987 this must be the landlord’s actual address, not just an address for service of documents.

The requirement to do this still applies if the outgoing landlord has already provided the information to his ex-tenant.

In housing advice land you don’t see these, not because of rogue activity but simply because the landlords just don’t know about the requirement and I have also never seen any correspondence from a conveyancing solicitor in such matters.

So far, so bureaucratic but there are a couple of very important caveats to be aware of with this.

Why its important

The first to be aware of is Section 3 (3A), which tells us that if the new landlord has not served the relevant notice on the tenant then the old landlord remains liable for any breaches of the tenancy agreement, such as disrepair,  until the notice is given.

This section also states that both the old and the new landlord can be held jointly and severally liable. The new landlord by virtue of section 11 LTA (Repairing obligations) and the old landlord under section 3

So if there are disrepair issues but you have sold the house, you might still be in the frame if the person you sold it to hasn’t complied with Section 3.

A worrying prospect.

Secondly, and even more scary for an innocent new landlord is the provision of section 3 (3) which states:-

“A person who is the new landlord under a tenancy falling within subsection (1) and who fails, without reasonable excuse to give the notice required by that subsection, commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.”

A summary offence means getting prosecuted in the Magistrates court. A scale 4 fine is currently £2,500.

So what seems like a tedious, arcane and fairly inconsequential issue can have serious consequences for both the vendor and the purchaser of properties containing sitting tenants.

More on the Prosection issue

Despite being an offence dealt with in the magistrates court the prosecution is actually done by local authorities in such cases,  as with harassment and illegal eviction.

I could imagine the look on a stressed out desk Sergeant in an average police station facing an outraged tenant demanding justice because their new landlord hasn’t served them with a section 3 notice.

But this does raise some common sense questions, not least of which is, what is the point?

My understanding of it and I am happy to be corrected, is that even if the tenant actually knows who their new landlord is and has been paying rent to them, if the s3 notice hasn’t been served the breach is still there.

The council can both serve work’s notices on the old landlord and prosecute the new one for not serving the notice.

Why a criminal offence?

I am aware that there can be some muddying of waters where certain residents should have been offered the chance to purchase before it was sold to someone else but does that provision need to apply to your average landlord and tenant arrangement?

From a rogue landlord enforcement perspective it does have its uses when trying to track down landlords who don’t want to be found and where disrepair issues are front and centre and I do teach people about its uses in that forum but that is a specific approach to it and even I can see it from the other perspective.

Regardless of the above I thought it a useful thing to share across the board. Outgoing landlords should ensure that the purchaser serves the notice and doesn’t leave them liable for breaches after sale.

New landlords need to know about the criminal sanctions if they don’t comply and housing advice and enforcement officers need to know about the provisions as another tool in their kitbag.

This blog is written by Ben Reeve-Lewis from Landlord Law

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