In times such as these where we are dealing with rapidly emerging realities it can be easy to overlook strands of how society is made up. It can often take people directly involved with a particular issue to draw attention to potential problems, ideally before they arise.
One such problem involves private renting. Whilst the mess of UK housing policy is not an immediate triage problem there is a minor element of it that might be a ticking time bomb problem.
Many tenancy agreements come with clauses in the contract that prevent any business activity taking place within these private houses. Whilst at most times these are reasonable, not rigidly enforced, and signed quite casually by tenants they cause individuals potentially a deeply problematic dilemma.
One can easily imagine any number of office based workers in this country have signed such contracts, based on the assumption that they would never be compelled to break this aspect of their tenancy. Now, however, for the sake of their own health, their company’s reaction to Covid-19, or the greater public health many are working at home. None of these are areas where would want people to be punished for a breach of contract.
It would therefore be correct to introduce emergency legislation to nullify all those clauses in contracts. Whilst it might be possible to abuse such a gesture the chances of people opening new businesses in the current climate seems low, and the potential costs to the tenants following government advice is higher.
Temporary emergency legislation is, by its nature, somewhat a blunt instrument. In this case, however, it feels like the best one.
* Guy Patching works in customer service & supply at a dynamic UK SME. He campaigned previously for the Lib Dems in Cornwall.
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10 Comments
This clauses shouldn’t be an issue for tenants. Most “no business’s clauses should be engaged by working from home like this because the primary use is residential and the working from home is ancillary to that. In any event the” eviction” provisions propped by government should prevent abuse by landlords.
Any way, landlords won’t care as long as the tenant pays the rent, behaves well and looks after the accommodation.
Tristan: I think the key word there is “Shouldn’t” .
I would agree that most tenants will fine, and indeed even where they might be technically in breach many landlords will not take advantage.
There remains, however, a danger for tenants where landlords might have reason to want to change tenants, or where agents feel the need to enforce an agreement from either their own private advantage (changing tenants is more lucrative for them than retaining tenants), or from sheer bloody mindedness.
It is for that reason I feel that the upsides to this action outway any potential risks. I would note you don’t bring any level of negatives, only as stating that it “shouldn’t” be necessary. We do not live in that ideal world unfortunately.
This is the wording in the Government’s standard model shorthold tenancy agreement
1.40 The Tenant must not use the Property for the purposes of a business, trade or profession except with the prior written consent of the landlord which must not be unreasonably withheld or delayed. In particular, it will not be unreasonable for the Landlord to withhold consent if there is a reasonable likelihood that the use proposed would:
(a) give rise to a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies; or
(b) cause a nuisance to the occupiers of neighbouring properties or significantly increase wear and tear to the Property.
The explanatory notes say:
“The tenant should normally be allowed to carry out a low impact business from home, provided that the property remains a private residence first and business use is secondary. Clause C3.2 permits a tenant to carry out a home business from the property as long as the landlord gives consent in writing. This does not mean that the landlord’s permission is required for all home-working – modern practice means that an office-based worker or a teacher, for instance, may sometimes work at home or bring papers home to work on and permission would not be required for that type of activity. If the tenant wants to run a business from home and the landlord refuses consent, written reasons need to be given. The reasons have to be reasonable.”
It’s really hard to see that, in circumstances where governments are giving very strong instructions that people should work from home that a landlord refusing this would be seen as reasonable.
Breach of tenancy agreements are (generally speaking) ones where the court has a discretion to order possession – Ground 12 – Sch 2 Housing Act 1988). So would probably take national circumstances and the scale of any breach into account (ie its unlikely that a very technical breach which didn’t prejudice the landlord and which could be easily remedied)
If landlords want to change tenants then they can just give notice in the ‘ordinary’ way. I don’t see why a landlord would want to go through a much more convoluted and hard to establish process.
(Given all that is this really a helpful article for LDV to have run?)
Makes you think. Home Insurance policies. You are always asked is your home used for
business, do you work from home – that normally means a higher premium!
Yes Theakes, this doesn’t just apply to rented property. Owner occupiers aren’t supposed to run a business from their homes without permission from the local authority I think. Imagine the chaos if this rule was applied at the moment. Best not to go there.
Hywell – Landlords are not required to follow the standard contract and can phrase however they wish so merely quoting the standard form is not relevant.
Theales & Sue – I think you make good points. I think it could entirely be appropriate to strike them from home insurance policies
True – they aren’t obliged to follow the government model. But I bet a huge number of tenancies do as most are ‘off the shelf’ pre-bought documents. You aren’t citing any examples where this is the case.
You haven’t address my points about how any such provision would be enforced given the discretion afforded by Ground 12
I shall be blunt – I think you are being very irresponsible and peddling uninformed and inaccurate information. LDV should pull this article.
Hywell – Thanks for your continued input.
I haven’t addressed your question about Ground 12 because I felt it was irrelevant for two reasons.
The first is your point directly related to your own assumption that landlords in all cases have used default “off the shelf” tenancy agreements, something clearly only a matter of conjecture. Every tenancy agreement I have signed, for instance, has been bespoke – a matter of the whims, preferences & peccadilloes of the landlord or letting agent.
The second is that merely the threat of breach of contract can be enough to shift tenants, or worry tenants into taking behaviour we would not want them to take. People are motivated not by their reality but by their perceived fears. Perhaps you, being as you are, clearly, a legal expert, would not be threatened by any potential landlord who might seek to punish you for doing the right thing. You might be able to form an argument, argue it yourself, no matter what your tenancy agreement might say
Part of the problem is that others do not have your utter self assurance and 100% confidence. There are people for whom this threat is a real one, and your dismissal of it with complex legalise shows how little you have thought through this problem at a human level.
To illustrate my point; we are seeing people panic buying various items, despite their not being any supply chain issues; its driven in part by understandable fear. Does this same population seem to you to be one in which you can assume deep confidence that the law would side with them without something explicit? If you can hold such a view, I have no idea how to persuade you.
Guy I think Hywel is right and that your article alarmist.
One point that hasn’t been mentioned is that the evil a clause prohibiting working from home is designed to prevent is that working from home could cause damage to the property or be anti-social. How would you feel if your neighbour started running a car repair business from home or car sales business and had say 20 cars parked up and down your road or someone ran a counselling service from home and had a constant stream of clients turning up at all times of day and night? That’s one of the reasons Ground 12 is discretionary. Also even if there is no restriction Ground 14 allows eviction if a nuisance is caused., say because of noise, smells or whatever. I think you are falling into the trap of assuming that everybody working from home is only using it as an office. I think the chance of a judge ordering possession because of home working that does not inconvenience neighbours is essentially zero in present circumstances. Also obtaining possession under Schedule 2 is difficult , expensive and time consuming, which is why landlords are moaning about the new restrictions on S21 evictions.
Sue I don’t think Local Authorities mind people working from home. They just need to know so they can assess whether apply business rates to part or all of the property in lieu of Council Tax.
this is an excellent article that makes very specific points. i think people need to realise that there are a lot of informal and semi-formal tenancies in britain, the more formal ones probably do use an off the shelf model, but ive lived in places where there was zro tenancy agreement provided, and where the gareement has been whatever the landlord wanted.