Social Housing Speed Read: Network Homes Ltd v Harlow : a lesson in improving improvement clauses
3rd December, 2018
In this week's Speed Read, we analyse the recent High Court decision in Network Homes Ltd v Harlow (Harlow), which highlights the importance of good drafting in tenancy agreements.
The issue of access
It is not uncommon for landlords to face issues when attempting to gain access to their properties – not just to carry out repairs or periodic inspections, but also in order to carry out improvements to the property. In those circumstances, it may be necessary for the landlord to apply to Court to enforce its rights.
However, the position may not be straightforward, depending on the wording of the tenancy agreement. There is an important distinction between “repairs” and “improvements”, and often tenancy agreements may not have been drafted widely or specifically enough to permit the landlord access for the latter.
The facts of Harlow
In this case, Mr Harlow was a resident in a flat within a sheltered housing scheme . Network Homes, the landlord housing association, wished to gain access to the flat to replace the front entrance door following concerns over fire safety. Mr Harlow refused access unless Network Homes met certain conditions. The parties could not come to an agreement, and Network Homes therefore sought an injunction requiring Mr Harlow to provide access.
Clause 2.1 of Mr Harlow’s tenancy agreement stated that Network Homes ‘would not interfere with [his] right to occupy the Property unless [they] need to gain access in circumstances set out in clause 3.18’. This was actually a drafting error, and the clause should have referred to clause 3.19, which stated ‘you must give all authorised employees of [Network Homes] reasonable access to the Property to inspect or carry out essential maintenance, inspection and repair to the Property… This includes treatment programs for pest eradication, improvement work and access to repossess your home if it is to be redeveloped or disposed of’.
Further, clause 2.2 of the tenancy agreement stated ‘we retain the right to carry out any repair, maintenance or improvement works … which we decide to carry out to improve the Property …’.
The initial decision
The County Court Judge concluded that the Agreement did not provide a right of access for the purpose of carrying out improvements. The Judge stated that the drafting of the first sentence of clause 3.19 ‘limits the reach of access’ as it permits the landlord to enter the property ‘to inspect, to carry out essential maintenance, to inspect or to repair’, despite the fact the second sentence of clause 3.19 referred to ‘improvement work’. The Judge reached this decision by finding that the first sentence identified the three permitted objects of access, and that the second sentence only served to identify things which may be included within the ‘essential maintenance’, ‘inspection’ or ‘repair’ of the Property.
The Judge also rejected the suggestion of an implied right of access, as he stated that if it had been the intention of the landlord to reserve a right of access under any right to improve, ‘one would have seen it spelt out’.
The High Court decision
On appeal by Network Homes, it was held that clause 3.19 should be interpreted as including improvement works. Mr Harlow’s right to exclusive possession was subject to the conditions of clause 3.19, and clause 2.2 reserved the right of the landlord to carry out improvement works, and as a result one would expect clause 3.19 to allow the landlord to enforce this right. It therefore made sense for clause 3.19 to permit access for the purposes referred to in the second sentence of the clause.
It was held that a wider interpretation of clause 3.19 ‘[made] sense of the entire agreement’. The High Court Judge further noted that the tenancy was granted by a social housing landlord, and ‘a reasonable person would expect the landlord to be able to ensure the safety of all residents in the building’ and access all the properties within the building for this purpose.
Therefore, it was decided that Network Homes should be able to gain access to the Property to carry out improvements and replace the front door.
In both Courts, the poor drafting of the tenancy agreement was criticised repeatedly by the Judges. Indeed, on appeal the Judge explained that the poor drafting of the document meant ‘that the Court should be more willing to depart from the natural meaning of the words’ than when they were ‘considering a carefully drafted document’. Further still, the housing association incurred substantial costs as a result of this case, and Mr Harlow’s case was publicly funded.
Although landlords may take comfort from the fact that, in this instance, the Court found that the tenancy agreement should have been construed as to permit access to the property for improvements, undoubtedly the overarching lesson here should be to ensure that the tenancy agreement is clear in its drafting. If a specific right should be reserved for the landlord under a tenancy agreement, then it should be clearly set out. This, as was noted in the High Court Judge’s closing statement, will hopefully avoid similar disputes and the associated costs, delay and upheaval in the future.
Tenancy agreements should be regularly reviewed to ensure they remain fit for purpose and take into account lessons learned from the Court. This is something we regularly assist clients with, please contact us for a discussion.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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