Landlords Beware – Prosecution Under the 1987 Act
It has long been the case that leasehold practitioners will advise their landlord clients that a breach of the rights of first refusal found in Part 1 of the Landlord and Tenant Act 1987 (“the 1987 Act”) is a criminal offence yet no prosecutions have been reported. This advice will need to be slightly amended following a recent prosecution under the 1987 Act.
However, the position has not changed significantly as the prosecution was withdrawn because the summonses were issued late. Practitioners will therefore remain unsure as to whether a prosecution under the 1987 Act is likely to be successful.
In accordance with the 1987 Act, when a landlord disposes of an interest in a residential building, it must serve notices on the qualifying tenants in the building to provide them with the right to first refusal in relation to that disposal. It is a summary offence (with a potentially unlimited fine) for a landlord to fail to serve the notices without a reasonable excuse under s.10A of the 1987 Act.
In accordance with s.127(1) of the Magistrates Courts Act 1980, there is a 6 month time limit from the time when the offence was committed to apply for a summons in relation to a summary offence.
In this recent prosecution, the landlord sold a block of flats at auction and completed the sale a month later. The local housing authority issued a summons against the landlord 6 months after the completion date. However, under s.4A of the 1987 Act, the disposal takes place on the date of the auction contract not the date of completion. Therefore, the summons were issued 7 months after the alleged offence and so outside of the 6 month time limit. The prosecution was accordingly withdrawn.
Landlords may still wish to tread more carefully when considering their obligations under the 1987 Act as it is now clear that a prosecution is not necessarily an empty threat.
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