Trowers' property litigation weekly update
This week the team considers the residential rent freeze and moratorium on evictions to be introduced in Scotland, as well as the proposal to end section 21 evictions in England. We also look at Guest v Guest, a Supreme Court case involving remedies awarded in proprietary estoppel cases. All this alongside our usual round up of insights from around the firm and some positive news of the week.
Residential rent freeze and moratorium on evictions introduced in Scotland
Although only applicable in Scotland, it is interesting that as a reaction to the increased cost of living, the Scottish Cost of Living (Tenant Protection) Bill was passed on 6 October 2022 which will introduce a rent cap and certain restrictions on evictions for residential tenancies (private and public sector tenancies and some student accommodation).
Under the rent cap, landlords cannot increase rent above the 'permitted rate' on or after 6 September 2022 (currently 0% although this can be modified) and any increase notice given on or after this date, but before the legislation comes into force, has no effect.
Possession proceedings can still be commenced, but a six-month moratorium is being introduced in respect of enforcement of decrees (judgments) for removal. The changes apply to most types of residential tenancy, but there are several exceptions with regards to the moratorium including ASB and substantial rent arrears. Damages for unlawful evictions have also been increased to a maximum of 36 months' rent.
This has however been balanced with some built in safeguards for landlords, for example where a landlord is experiencing financial hardship themselves.
The Bill has an expiry date of 31 March 2023 but can be extended.
While this only applies to Scotland, it is interesting to see how Scottish Ministers have reacted to the cost-of-living increases. Despite some calling for rent control in England, we are yet to see such far-reaching proposals which would impact all sectors, although the Government is presently consulting on a rent cap in the social housing sector, the outcome of which is awaited.
Section 21 evictions: 'ban will go ahead'
On 12 October 2022 during Prime Minister's Question Time, Liz Truss confirmed that “she will carry out her commitment to get rid of no-fault evictions”. This followed reports earlier in the week in The Times that the government was considering shelving plans to end section 21 evictions.
The highly anticipated Supreme Court decision in Guest v Guest
This appeal concerns the proper basis for awarding remedies in cases of proprietary estoppel. Proprietary estoppel arises when a person gives a clear assurance to another person that they have or will be given an interest in property, that other person reasonably relies on the assurance to their detriment, and it would be unconscionable to go back on the assurance.
The case concerns a dispute between members of a family over the future of the family farm. Andrew, the eldest son, had worked on the farm for long hours with low pay on the basis of a promise by his parents that he would inherit a substantial (but unspecified) share of the farm on their death. However, the relationship between Andrew and his parents began to deteriorate and his parents made new wills, removing Andrew's inheritance. Andrew issued proceedings and the judge at trial ordered the parents to make an immediate payment of £1.3 million which amounted to 50% of the value of the farming business and 40% of the value of the farm itself. This award meant that his parents would be required to sell the farm.
The parents appealed initially to the Court of Appeal (where their appeal was dismissed) and then to the Supreme Court, stating that the award went beyond what was necessary. Andrew's expectation was that he would inherit the farm on their deaths and the immediate lump sum was therefore more than he was promised.
The appeal was allowed and permitted the parents to choose between either putting the farm into trust in favour of their children or, if a clean break was preferred, paying compensation to Andrew now but with a reduction properly to reflect his earlier-than-anticipated receipt.
Insights from around the firm
- Corporate - Sequana – Supreme Court rules that directors' "creditors' duty" exists
- Projects and Construction - Society of Construction Law paper: Duty of care in contractual chains: Have we reached consensus?
- Employment and Pensions - Update: Levelling Up and Regeneration Bill 2022 progress through Parliament
- 275 Rare Parrots Saved From Hurricane at Florida Sanctuary
75 exotic parrots are now on their way to a new wildlife sanctuary after a caretaker pulled all of them up into his stilted house to ride out Hurricane Ian. After the devastation, a full-scale volunteer effort transported all 275 parrots by boat through flooded canals to solid ground where they will be taken to another wildlife sanctuary.
The efforts were led by Project Dynamo, a volunteer rescue operation. They put together a team and four boats to put all the parrots into cat-sized pet carriers and bring them off the Island. One of the volunteers came from the new sanctuary, who said they are likely to take the birds in for 6 months to a year.
Hero Honeymooners Rescue Sleeping Babies from Burning Nursery in Spain
David Squillante and Doran Smith found themselves in Barcelona last month for their honeymoon. The newlywed 38-year-olds were on their way to tour a park when they saw a burning building, they ran inside through the smoke and ended up saving a room with 20 sleeping infants.
- Construction is underway in the Maldives for a floating city to house 20,000 people – a trailblazing solution to rising sea levels and an overcrowded capital city
In a lagoon in the Maldives, a floating city is taking shape. Consisting of houses, restaurants, shops, a school and a hospital, the futuristic feat of architecture opened its first units over the summer and will house 20,000 people by the time it is completed in 2027.
The floating city offers new hope to the half a million people who live there. It will provide large, airy, affordable houses for local people, each with its own seafront view and balcony.