Published February 27th 2020

Learning the Law: Contracting out of repairing obligations for dwellings

The Landlord & Tenant Act 1985 (“LTA 1985”) section 11 imposes a number of repairing obligations on landlords of residential tenancies, which cannot simply be overridden by agreement between the parties. The provisions apply in general to lettings of dwelling-houses for a term of less than 7 years, which would include most assured shorthold tenancies and assured tenancies. As highlighted in Josie Edwards’ article at the following link ‘https://www.michelmores.com/news-views/news/rural-dwellings-housing-health-and-safety-rating-system-and-agricultural-tenancies‘, these statutory obligations do not, however, catch tenancies of dwellings, which are let as part of a farm, under the Agricultural Holdings Act 1986 or the Agricultural Tenancies Act 1995.

Section 11 – maintenance and repair

The Section 11 obligations are:

to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes);
to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity); and
to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.

Section 11 also includes the provision, that “in determining the standard of repair required by the lessor’s repairing covenant, regard shall be had to the age, character and prospective life of the dwelling-house and the locality in which it is situated.”

Under Section 12 contracting out of these provisions is expressly prohibited.

Kerr and another v Maass [2019]

The recent High Court case of Kerr and another v Maass [2019] EWHC 95 (Ch), has highlighted the question of contracting out of these statutory obligations. In that case the Court decided that an agreement between landlord and tenant to contract out of the landlord’s repairing obligations under section 11 LTA 1985 did not bind the parties. Furthermore, the tenant could not avoid the effect of a notice to quit under section 21 Housing Act 1988, by arguing, by way of an estoppel, that his agreement with the landlord gave him rights over and above those of an Assured Shorthold Tenancy (“AST”).

The case

In 1993, the landlord granted an oral tenancy to the tenant, at a significantly reduced monthly rent, in return for the tenant taking on the obligations for maintenance and repair of the property. The tenancy then continued in more or less the same format and at the same rent for 24 years.

After that time, the landlord served a section 21 notice to regain possession of the property after finding that it had fallen into disrepair. The tenant argued that the landlord was not entitled to recover possession due to proprietary estoppel through acquiescence, and also counterclaimed for damages due to the landlord’s non-compliance with his repairing obligations under section 11.

Decision on the repairing obligations

This arrangement, regardless of its commerciality or fairness, fell foul of section 12 of the LTA 1985, which imposes an express restriction on contracting out of section 11 obligations, to the extent that any agreement or covenant will be void if it “purports to exclude or limit the obligations of the lessor”. The only way to contract out of the repairing obligations is to obtain permission from the Court.

Therefore, despite the approval of both parties and the low rent to reflect the change in obligation, the Court found that it was not possible to contract out of section 11. The landlord was found liable for damages for his failure to repair and maintain the property under Section 11 in the sum of £5,000 and required to pay the tenant’s costs in the counterclaim.

Proprietary estoppel by acquiescence

The tenant resisted possession proceedings by arguing that a proprietary right had arisen due to the circumstances of his occupation. He argued that he believed that he had a more substantial and secure right of occupation than under an AST and that the landlord had acquiesced in this belief by agreeing to contract out of the landlord obligations in section 11 of the LTA 1985 (which should otherwise have applied under an AST).

This defence was based on the doctrine of proprietary estoppel by acquiescence. Megarry and Wade (9^th Ed.) sets out the principles at 12-0.34 as follows:

There must be a mistaken belief by the tenant as to their rights, which causes them to adopt a particular cause of conduct;
The landlord must have known of the mistaken belief of the tenant; and
The landlord must have failed to correct the tenant by not asserting his own inconsistent right against the tenant’s.

If the landlord were to enforce his right and in doing so cause detriment to the tenant, then due to the acquiescence, it would be unconscionable to allow the landlord to assert that right.

Application to this case

In this case, it was established that the landlord was neither told, nor knew of the tenant’s belief that he had a more substantial interest in the property than under an AST. There was also no evidence that either party knew that they could not contract out of the Section 11 obligations and instead, they made an “innocent and understandable mistake”. As such the Court found the landlord’s conduct could not be considered unconscionable and the tenant’s defence of proprietary estoppel by acquiescence failed. The section 21 notice was therefore effective in terminating the tenancy.

Conclusion

This decision confirms the orthodox thinking that it is not possible to contract out of section 11 of the 1985 Act without the permission of the Court, even if both parties are willing to agree and the arrangement seems fair and reasonable.

By being ignorant of his legal obligations, a landlord risks facing various causes of action, including proprietary estoppel through conduct, being excluded from regaining possession of a property and/or a claim for damages for breach of section 11 of the LTA 1985.