Clause 23 Tenancy Act+ Verbal Contract

[Bernadette]

Hi - I rented a house in which my landlady agreed I could run a bed & breakfast. She said she wanted longterm tenants. Next door to my house is a cottage she also owns.
She told me that she may want to sell the house I am in and she would give me first refusal. (She would keep the other cottage)

The previous tenants had been professional Cannibis Growers and there was a lot of work to rectify the houses.
I moved in on April 10th she gave me a 1 Year shorthold tenancy dated 6th April 2009 well after I moved in. I paid her £1000 deposit and £1000 for the rent. She carried on working in the house whilst I paid her rent for 2 months! I did this because she promised to do lots of work such as fire doors etc (she is a property developer and builder) My business partner and I used our credit cards to pay to do work on the house too and pay the rent, I also had help from housing and working tax credits to support me getting the B&B up and going. We were delayed from starting the business last year because of new fire regulations which meant all doors had to be changed. My landlady convinced me to buy special equipment and paint to fireproof the doors, which I had to pay for. She agreed that if I paid she would do the work -which she later denied.

My landlady now says she wants to sell both houses (now we have done all the work) and not sticking to the fact that we had an verbal agreement for another year.
We have been trying to raise the money to buy the properties but she has overpriced and we need more time.
She went with an overpriced estate agent (£200,000 over 5 other estate agents) and told me I have to let them in. I delayed the date once (re a sudden funeral) and then said no the second time, because realised that I must have some rights.

I have had several threats from her about not renewing my tenancy (but as she is selling I doubt she will anyway apart from the fact the agreement is I have 2 years in the first place).
Also that her ex-husband would be coming in with the gardener whether I was here or not). I have been under a huge amount of stress and anxiousness and do not feel safe.

I have just received a letter from her solicitors dated 1 April 2010 saying that I have refused to allow access on 2 occasions for the property to be inspected.
(Infact I had to cancel one appointment and gave another date re: a funeral and it was the 2nd appointment I cancelled - also she is not inspecting the property she is sending in estate agents to do an EPC check)

It then goes on to say that I must permit access. Should I refuse to do so and our client suffers loss because of it our client will look to you to recover that loss. You are aware that access is required for an Energy Performance Check so that the property can be put on the market...now is a prime time to market.....Our client will be making another appointment..you must permit access. If you fail to do so then our client will immediately issue proceedings to terminate the tenancy...because you are in breach of covenant."

Q) Our agreement was for 2 years anyway, and as she is now selling she is hardly likely to give me anything in writing. So would you agree this does not make sense.

Q) Is the 1 year shorthold tenancy null and void anyway as it was always agreed I was running a business here. I have lots of evidence of that - fire reg people, tourist board - Government bodies on info on Business advice for B&Bs etc and my own emails back and forth to the landlady.
I hadnt had any bookings up until now - people booked for may and june.

I have just also found previous tenants that have told me the nightmare they had with her. She kept part of their deposit for late payment on rent by a couple of weeks here and there (and they only did this as she would not rectify works etc making their life hell). There is water running under the house. The septic tanks need replacing and they had the same sewage probs we have had (it running down the drive etc) The electricity was done by her and it is in a very dangerous state. She has done major building works without planning etc etc She cut of heating pipes making the heating inefficient (I had a £700 electricity bill).

We are not worried if we know what the faults are as everything can be rectified but she is certainly hiding them from us. The previous tenants had to leave the house with the lady 4 weeks due in her pregnancy - they lost loads of money in solicitors advice - she kept part of their deposit. They basically had to give up. They did the same as us loads of work on the house and gardens.

Q) Her own tenancy agreement says we have to allow her in to do repairs. The Clause 23 says Landlord to give 24 hours notice in writing (is that email too) except in emergencies, should they wish to enter the accommodation.
Letting estate agents and EPC checks is not repairs or indeed the landlord. So do we have to let them in?

We have had 3 months of her not finishing work on the house at the beginning. Now we have had a terrible stressful time since Oct/Nov when she first started saying she would sell both properties now.

I want to be able to run this bed and breakfast for this year that she promised to recouperate the massive expense and time we have put into trying to start our B&B.
This would also give us the time to arrange our finance to buy the property if we can do that (probably now she wont sell to us anyway but we have to take that risk)

We are in major debt and when going to get advice from a solicitor he said he would try to say the contract is null and void as it was always agreed as a business and that we would not be able to get legal aid. He said that he would have to check the law on it as we havent had any guest staying yet - although they are booked for May and June)

So I need help from someone who can tell me what my rights are and what we can do. PS We have not at all with her been able to have quiet enjoyment!

This lady is very dishonest - even when I had the boiler inspected he said she had been getting them to maintain the boiler on each house on one contract and his boss could not get reimbursed as none of the engineers had noticed.

I also found out from the gardener that she swapped cookers etc from one house to another to get the insurance because only one house covered her with the cannibis growers destruction and they were in both houses.

She is pumping sewage straight out into the garden. The more I have been talking the more I have found out. She had 6 properties, has taken other people to court, she obviously has lawyers in place and knows what she is doing.

My vision for this place was to start the B&B and then a creative healing centre. We are honest and maybe a little naieve but we could really do with some help.
Eternally greatful Bernadette God Bless

[mjbfire]

There are hopefully going to be more qualified people on later/tomorrow but here my views. These views are only if rent is under 25,000 and in E&W

If you got a fixed term contract it's going to be hard for her to get you out.
As per the B&B, if she agreed by e-mail and you still got them I wouldn't worry about this at the moment. (I don't know if an AST can be turned into a business contract just like that)

She can only get you out if she issue you a S21(No fault) which gives you to the end of the fixed term, but she must have potected your deposit and given you details(which). Which I doubt she has, so point 1 to bring up with her and her lawyer. The other is a S8, which she must give you a reason(not paying rent etc and prove it in court.
Then it's the electrics and sewage, talk to the local council housing officer, who will more than likely come round and inspect, electric checks are not needed by law, but LL have a duty of care, so point this out to LL and Lawyer.
The LL and others coming around, you can either write a letter agreeing access, but requiring you to be present and at least 24hrs in writting or again it something the local housing officer can do for you(Which means it logged).
But I would allow them access, so they can't use that reason to get you out.

As per the fire door and all your works, if she didn't pay of them and not on any inventory you signed(If she did one), you can take them with you when you go, making sure you don't damage anything else.

What fuel do you use, if gas in house has she got a landlord gas cert, she may have them serviced, but that is differant than Landlord Gas Cert. Again something to bring up with the LL and Lawyer.

As per your lawyer, I find another one, I guess he thinks it not an easy case as another lawyer is envolved and you don't have the funds to pay.

As per your business, I would try and find somewhere else, as even if you solve these problems, I guess there be more, as she wants to sell, and not nice for your guests.(Just my view in this situation)

Above may not solve all your problems, but just maybe get them off your back, for a little while.

[Snorkerz]

I am guessing it is, but can you confirm that the property is your main home - or at least the main home of one of the people on the tenancy agreement?

If it is not, your tenancy agreement will not be an AST, no matter what it has written on it - which means much of the 'standard' housing law may not apply.

With regard to landlord/agent/repairmen entering the property, if you search this forum for "quiet enjoyment" you will find lots of interesting reading. The basic principle seems to be that you are entitled to not have people in your property at a time that is inconvenient or unreasonable. Maybe you could say to the agents that they can conduct visits by prior arrangement, but those visits must only be between 2 & 5 on a Saturday afternoon - if you get the idea.

[Lawcruncher]

If you are running a B&B then you have a business tenancy and you have the protection of Part ll of the Landlord and Tenant Act 1954 whether you live in the property or not. The landlord must give at least 6 months' notice under the Act and unless the landlord can prove one of the statutory grounds you are entitled to a new tenancy. Consult a landlord and tenant specialist surveyor immediately about whether you should serve a section 26 notice requesting a new tenancy.

If the terms of the agreement do not permit access other than for repairs you have no obligation to let the agent in.

[Preston]

I very much agree with the advice given so far, that it would be worth exploring the business use angle and arguing that you have a tenancy under the 1954 Act, but there are some things you should be aware of.

If you have signed an assured shorthold agreement, the court's presumption will be that the letting is indeed a shorthold unless you can demonstrate otherwise.

This may seem like an odd question in the circumstances and forgive me if I have missed this in your original post but is there any prohibition or restriction on the running of a business from the premises in your agreement? The running of a business in breach of such a clause does not necessarily mean that the tenancy will be a business letting for the purposes of the 1954 Act (see Lewis v Weldcrest, 1978). If this were otherwise it could result in obvious injustices for landlords.

Having said all this, where there is a mixed residential and business use the letting will generally fall under the 1954 Act unless the business use is merely incidental to the residential use. Tenancies fall within the Act if the premises are occupied for the purposes of a business carried on by the tenant or "for those and other purposes". Provided the business use represents a significant purpose of the tenant's occupation then this condition is likely to be satisfied.

A tenant who takes in lodgers or paying guests who live as part of his or her family is very unlikely to satisfy the business use requirement. Neither is someone who brings work home from the office occasionally or who uses a room in the premises to meet or consult with clients from time to time. However, someone who sets up their only office in the premises and conducts all of their business from that address is very likely to create a business user, (e.g. Cherly Investments Ltd v Saldanha, 1978).

So, my guess is that if the landlady was aware and consented to you setting up a b&b to the extent that you carried out physical alterations to the property, that you advertised your services and that this was your only or main business activity, you have a very good case for arguing a business tenancy.

Not sure what affect sewage in the garden will have on your repeat business though? (pardon the pun).

[Lawcruncher]

If you have signed an assured shorthold agreement, the court's presumption will be that the letting is indeed a shorthold unless you can demonstrate otherwise.

I do not think that the court can make any such assumption. Whether a tenancy is an assured (shorthold) tenancy depends entirely on whether the statutory conditions are met. There is really no such thing as an "assured shorthold tenancy agreement"


This may seem like an odd question in the circumstances and forgive me if I have missed this in your original post but is there any prohibition or restriction on the running of a business from the premises in your agreement? The running of a business in breach of such a clause does not necessarily mean that the tenancy will be a business letting for the purposes of the 1954 Act (see Lewis v Weldcrest, 1978). If this were otherwise it could result in obvious injustices for landlords.

Having said all this, where there is a mixed residential and business use the letting will generally fall under the 1954 Act unless the business use is merely incidental to the residential use. Tenancies fall within the Act if the premises are occupied for the purposes of a business carried on by the tenant or "for those and other purposes". Provided the business use represents a significant purpose of the tenant's occupation then this condition is likely to be satisfied.

A tenant who takes in lodgers or paying guests who live as part of his or her family is very unlikely to satisfy the business use requirement. Neither is someone who brings work home from the office occasionally or who uses a room in the premises to meet or consult with clients from time to time. However, someone who sets up their only office in the premises and conducts all of their business from that address is very likely to create a business user, (e.g. Cherly Investments Ltd v Saldanha, 1978).

So, my guess is that if the landlady was aware and consented to you setting up a b&b to the extent that you carried out physical alterations to the property, that you advertised your services and that this was your only or main business activity, you have a very good case for arguing a business tenancy.

I did think of asking the same question, but the facts as the OP sets them out suggest that the landlord was fully aware of the intention that the property should be used for B&B and I think that any prohibition to the contrary can be ignored. Section 24 (4) LTA 1954 provides:

Where the tenant is carrying on a business, in all or any part of the property comprised in a tenancy, in breach of a prohibition (however expressed) of use for business purposes which subsists under the terms of the tenancy and extends to the whole of that property, this Part of this Act shall not apply to the tenancy unless the immediate landlord or his predecessor in title has consented to the breach or the immediate landlord has acquiesced therein

I agree that it has to be a matter of degree as to whether the OP is in fact carrying on a business.

[Preston]

I do not think that the court can make any such assumption. Whether a tenancy is an assured (shorthold) tenancy depends entirely on whether the statutory conditions are met. There is really no such thing as an "assured shorthold tenancy agreement"

Yes, but what we have here is a conflict (or potential conflict) between two different statutory regimes and in these circumstances the court would indeed pay some attention to what has been agreed between the parties with regard to the nature of the letting.

[Lawcruncher]

I do not think there is a conflict. First you decide if the tenancy is one to which Part ll of the LTA 1954 applies. This is a question of fact and does not depend on what is agreed, except that if the terms of the tenancy are that the premises are not to be used for business purposes the tenancy cannot come within the protection - unless the landlord has expressly or impliedly waived the prohibition.

If the tenancy comes within Part ll LTA 1954 it cannot be an assured tenancy - see paragraph 4 schedule 1 HA 1988.

[Preston]

I do not think there is a conflict ...

Well, we are probably not going to agree on that one.

In using the word conflict I am simply quoting other eminent commentators who draw attention to the fact that an element of business use does not necessarily mean that the letting is not a residential one and that it is the degree of business use which is key to determining whether the 1954 Act applies. This can make it very difficult to decide which statutory regime applies in certain circumstances as I know from my own experience.

In any case, this issue of of no real significance. My earlier point, that a court would give some weight to what was agreed between the parties in the absence of any evidence to the contrary, is potentially a little more important, though admittedly not much in the present circumstances. In my defence I would point to a number of cases in which it has been held that a tenant cannot unilaterally alter their status by departing from the originally agreed arrangement.

[Lawcruncher]

I am not saying that it is necessarily always easy to say if there is a business that brings a tenancy within Part ll LTA 1954, but rather that once the point is decided there would be no conflict.

As to "what the parties agree", what I am getting at is that, if the parties think they have agreed an AST but have in fact agreed something else, it cannot be an AST. If it was agreed that the property should be used for B&B and it is in fact so used then (subject only to establishing whether the business user is significant enough) the tenancy must be a business tenancy. What sort of tenancy it is can only be established by applying the statutory criteria and ignoring the intentions of the parties. Assuming what we have here is something that cannot reasonably be described as anything other than a B&B business, what was "agreed" was an impossible hybrid - a business tenancy that could be terminated as if it were an AST.

Perhaps Bernadette will come back and tell us a bit more so that we have something to go on.

[jeffrey]

Back to post #1. What does Clause 23 Tenancy Act mean, please? Is the property in England & Wales, for a start?

[Snorkerz]

Back to post #1. What does Clause 23 Tenancy Act mean, please? Is the property in England & Wales, for a start?

It is clause 23 in OPs tenancy agreement (approx 2 thirds down first post)

[NJW]

Best thing you can do for your sanity is to vacate asap bearing in mind that you are bound by the covenants of the lease in terms of paying the rent and any other covenants in the lease. Your tenancy agreement was for one year as a residential tenancy. The landlord is obliged by law s11 1985 LTa to put the premises into tenantable repair vis a vis the sanitation issues and any other issues regarding repair.

In regard to you having a business tenancy covered by the security of tenure provisions of 1954 LTA. Possibly but difficult to argue as the main reason for occupation is provide a home for you....but she has acquiesed to you running a B&B and therefore there is a possibility that you could have a business tenancy as covered by the '54. You should be aware that in Lewis v. Weldcrest 1978 it was held that the tenant wasn't covered by the 54 act.

With regard to the improvements you have made they are for your benefit. Not the landlords.

[Bernadette]

This case has been going on since this last thread. I apologise for not answering but I got into the legal system and could not at the time figure out how to answer you back. I do not know once I have posted this how to get your answers do I just find the thread and the answers will be there?

My landlady delayed the court action by putting in for a 2 months stay. It went to 3 months. My lawyer said we werent going to have a stay and although my landlady said I had to give permission it went ahead without me having any knowledge.

My father became ill and I was away from the house. I thought all proceedings had stopped as my laywer stopped emailing me. When I returned back the laywer said I had to get the case together he gave me no time and I was ill with stress. I asked him if I could delay (there were a lot of things my fathers illness - my partners fathers death and my own illness) the lawyer said the court would not allow it and that if I could write him an email asking for an adjournment I could get a case together he told me it would only take a few hours. It took me weeks - getting documents together - witness statements.

The laywers firm changed their fees quite often I found out afterwards that I shouldnt even be going to court as the date was wrong. I was a day late from his time limit on one of the witness statements. And even though my landlady told me she was not given the documents as my lawyer said he had not received hers and she said she didnt have time. The whole thing was a disaster. I did all the work and it exhausted me further.

The court was stopped and then I was called to explain why I didnt get my documents in on time. My landlady also didnt get things on time. She could not prove the deposit and then the judge said to all have a discussion which ended up my barrister talking to my landladys barrister and my landlady without me present and my barrister came back and even now I dont understand what happened.

Then my lawyers wanted me to sign to allow them to get costs greately increase against my landlady. I had began a complaint with these lawyers as it was a fiasco and at the same time they had also in another department arranged conveyancing for land with Agricultural Payments - even though we legally bought them the landagent would not do the paperwork to give them to us as he was instructed by the seller to pass them on. Our same lawyers would not do anything about it as they said it was a conflict of interests as they do a lot of work with the land agents and their offices are opposite.

The complaints procedure went on and on and on. I went to Age Uk and met with an ex-lawyer who told me to drop the complaint so they could get on with the case as this is what they said they would do. I dropped the complaint and allowed them to go for the costs to my landlady. And then they said they would not carry on the case.

I was then given different notices from my landlady - I went to Shelter as by this time I had no money at all as also the previous laywers told me that I could not run the B&B for more than 2 months in advance and I had to cancel all our bookings and this ruined the business and our name with the walking companies who stopped using us.

Shelter 2 weeks before I was due to go to court suddenly said their solicitor was too busy and they couldnt do it.

I then went to another firm and had to pay with my credit card for them to review it. The laywer told me that it was clear it was agreed by my landlady we could rent the house as a b&b but as although I had just signed a normal 1 year tenancy agreement her email said this it the normal tenancy agreement to use and I will write the appopriate letters for the business when you are ready. We also wrote this on the side of the tenancy agreement. She had told me she would give me a proper business contract (I was naieve).

So then we sat with the Barrister of the new firm waiting to go to court. He told us that he would be speaking to his contract laywer. He loved my vision of a creative healing centre. He told us that all the harrassment and costs etc that they could easily have her in such a position of owing us that we would be able to buy the house.

All during this time I was also trying to buy the 2 houses. My landlady told me I could buy the small cottage first I arranged all the finance and then she again said no that her ex-husband said they should be sold together.

I said if she would stop court proceedings I would try to get my partners shares sold in a family busines in which he is a 33.8% sharehold in a large earthmoving company. She told me to go ahead this led in the end with us going to Corporate Laywers as brother would not give him the true value of his shareholding and offer a fair price. The oorporate lawyers told us that they would do the initial letter for £3500 to get all the information and show unfair prejedice. But they charged us £10000 and threatened to bankcrupt my partner if we didnt pay them every month. I went into their complaint procedure (I now had 2 sets of laywers

For some reason the rest of my post diassapeared - I have a possession order with that with 8 9 11 on 26th with wrong date and saying I havent paid rent since 11 october (rent was due 10th October paid) landlady changed rent payment to 6th as that was the date we put donw to make it easier for my housing as it was paid weekly and that was the date due I acutally moved in t the 10th. I am even more depressed now that my last shot at self-survival is if I wrote out all that happened someone would look at it and think I will sort that lady out my mobile is {Mod - phone number removed} and then when I posted it half disappeared (lucky for you guys). I put my number as I dont understand these forums and I dont know how to pick up your answers. Kind regards Just too tired now.