10:04 AM, 16th September 2024, About 3 weeks ago 9
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A common question I get asked after a disaster like a fire or flood is whether a landlord is obligated to re-house a tenant. The straightforward answer is “no.” However, a related question is whether the landlord must “pay” for alternative accommodation. This is a distinct issue, but first, let’s address the duty to re-house.
Responsibility to provide alternative accommodation
There is actually no legal requirement, under any primary or secondary legislation or case law, that obligates a landlord to arrange alternative accommodation if a property becomes uninhabitable due to a disaster. This holds true even if the landlord is at fault, such as causing the fire.
However, local authorities do have a duty to assist tenants in such cases.
Under s.175 of the Housing Act 1996, a person is considered homeless if they have no available accommodation.
Under s.189(1)(d) of the Housing Act 1996. A person is classified as being in priority need of accommodation if they are homeless (or threatened with homelessness) due to an emergency like a flood, fire, or another disaster.
When a local authority has reason to believe that someone is homeless and in priority need, they are required to provide temporary accommodation pending a final decision on any duty owed s.188(1) Housing Act 1996.
Paying for Alternative Accommodation
Whether a landlord must cover the cost of re-housing a tenant temporarily depends on whether the landlord has breached their repairing obligations and whether the disaster was the landlord’s fault. A landlord is not in breach of their repair obligations until they have been notified of the disrepair and a reasonable time has passed for repairs to be made, The Homes (Fitness for Human Habitation) Act 2018
For instance, if the property’s electrical system was faulty and the landlord was unaware of the problem, the landlord wouldn’t be liable for the tenant’s damages. Consequently, the landlord would not be responsible for the cost of alternative accommodation. However, if the landlord was aware of the defect (e.g after receiving notice of the fault) and failed to act, the tenant may recover the reasonable cost of alternative accommodation.
Will rent continue to be paid
Tenants are generally still required to pay rent even if the property is rendered uninhabitable by a disaster. It is always recommended to read the tenancy agreement to see what provisions this makes.
Insurance Considerations
In most cases, the property will have building insurance that may cover both alternative accommodation and rent. However, the specifics depend on the terms of the insurance policy and the tenancy agreement.
If the tenancy agreement is silent on these matters, the tenant generally has the option to either continue paying rent and have alternative accommodation covered by the landlord’s insurance or offer to surrender the tenancy. If the landlord accepts the surrender, the tenancy ends immediately. If the insurance policy includes rent loss cover, the insurer will pay the rent while the property is being reinstated. Alternatively, the tenant may agree with the landlord to pay for the alternative accommodation themselves, in which case the insurance may cover the rent loss instead.
The exact coverage will vary depending on the insurance policy and the tenancy terms, but it is rare for insurance to cover both alternative accommodation and rent loss simultaneously. The landlord and tenant must agree on the best course of action, particularly if the tenant intends to return after the property is reinstated.
If the tenancy agreement requires the landlord to insure the property but they fail to do so, the landlord may be liable for any costs the insurance would have covered.
Reinstatement or Rebuilding of the Property
Whether a property must be reinstated or rebuilt depends on the lease. Long leases (over 21 years), particularly in local authority properties, often include clauses requiring the landlord to rebuild or reinstate in the event of destruction, as stated in para 14(3) Schedule 6, Housing Act 1985
For private rentals, especially assured shorthold tenancies, there is an implied covenant under s11 Landlord and tenant act 1985, that the landlord will repair the property’s structure, exterior, and essential installations. However, this does not extend to rebuilding or reinstating the premises after destruction by fire or other disasters, unless specified in the tenancy agreement.
If the tenancy continues despite the property being destroyed, the tenant may offer to surrender the tenancy to stop paying rent, or if the timing is right, give notice to quit. If the landlord wishes to terminate the tenancy, they must serve the appropriate notice and may need to obtain a possession order if the tenant refuses to vacate.
If the tenant is not residing at the property due to its destruction, it could be argued that the tenancy has ceased to be an assured shorthold tenancy, as it is no longer the tenant’s home. However, this would depend on whether the tenant intends to return once the property is restored.
Why insurance is key
Regardless of the reason for the fire, flood or other disaster that renders a property uninhabitable, it is important that landlords have the correct insurance in placed to cover them for their losses and protect against a claim from the tenant.
reader
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Sign Up10:13 AM, 16th September 2024, About 3 weeks ago
If you are writing an article like this you need to cover the legal concept of frustration and is impact on leases including those under two years in length.
AdrianB
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Sign Up11:18 AM, 16th September 2024, About 3 weeks ago
What do landlords do when they have unfurnished flats that have block buildings insurance?
I do worry about my exposure as my houses all have landlord building policies which cover loss of rent/alternative accommodation but there doesn’t seem to be any products that cover additional landlord risks over normal block buildings policies? What do others do?
Ron
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Sign Up12:48 PM, 16th September 2024, About 3 weeks ago
Reply to the comment left by at 16/09/2024 - 10:13
Frustration is very important as a concept which can end legal obligations on both parties.
Overall, the article gives an impression that the position for the landlord is rosier than it is.
Also, in an emergency it is difficult to work out the cause and whether there was notice of the defect. If the tenant is homeless and the landlord refuses to provide alternative accommodation and it then transpires the landlord was liable for the fault causing the emergency then this will increase the level of the damages.
Finally, councils often refuse to rehouse and point the tenant back to the landlord.
Jonathan Willis
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Sign Up12:57 PM, 16th September 2024, About 3 weeks ago
I remember reading up on shelter about this but the advice seems to have changed. It still says that unless the tenancy agreement states the landlord will provide alternative accommodation then they dont have to, but this did add in an exclusion around s11 repairs which is no longer mentioned. The jist was if someone happened outside the control of the landlord, i.e. car crashes I to the front door, Vs the landlord doing something,or lack of action causes an issue, i.e. fire caused by bad electrics which were reported as faulty, then s11 kicks in and it makes the landlord liable.
However the current guidence on shelter no longer mentions this. It just says the tenant should continue to pay rent, and if the property isn't fit for habitation then present yourself as homeless to the council, and mutual agreement with the landlord to pause rent.
However over on the Reddit pages, any attempt to say the landlord isn't liable is met with considerable down votes, with many saying the tenant has a contract for accomodation, so alternative accommodation must be provided. Sounds logical but is never backed up by legislation or case law.
Robert Sled
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Sign Up16:15 PM, 16th September 2024, About 3 weeks ago
The ast is not "the landlord will provide me with *a* home" for the duration of this contract. It is that the landlord will rent *this* home to me. Think of it this way - imagine you go to McDonald's and pay for a chicken sandwich. They call you to the counter and say "we just ran out of chicken". Do you now have a *right* to receive a beef burger? No. You could have a refund, and perhaps the restaurant will want to keep your money so they may decide to offer to give you beef, but ultimately you do not have a *right* to force them to give you an alternate product. Well similarly, I would be surprised if it turned out that renting a specific house from a landlord means you have the right to demand he puts you in a different house.
If the contract is for one specific house, it's for one specific house (in my opinion)
Property Gal
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Sign Up18:26 PM, 16th September 2024, About 3 weeks ago
My new freeholder has inherited permission to build two storeys on my top floor flat and the building insurance he has arranged has no cover if the flat becomes uninhabitable which the building works are bound to cause e.g. floods.
I don't think leaseholders can force the freeholder to arrange uninhabitable cover?????
Should I take out my own cover for this?
All advice appreciated. Help!!!
Julie Ford
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Sign Up8:26 AM, 17th September 2024, About 3 weeks ago
Reply to the comment left by at 16/09/2024 - 10:13
Frustration only applies to contracts which have become impossible to perform.
A supervening event changes the circumstances of performance of the contract so significantly, that the parties no longer need to perform the contract.
If the intention of both parties is for the tenant to return to the property when the emergency is dealt with or the repairs complete. this would not lead to frustration.
Although frustration can be applied to AST it rarely is, instead surrendering the tenancy is the preferred option
Julie Ford
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Sign Up8:28 AM, 17th September 2024, About 3 weeks ago
Reply to the comment left by AdrianB at 16/09/2024 - 11:18
Freeholders should have adequate insurance to cover for the work they are responsible for. But as a leaseholder you should have an insurance product that covers you for alternative accommodation, which could then be claimed back via the FH insurance
Julie Ford
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Sign Up8:31 AM, 17th September 2024, About 3 weeks ago
Reply to the comment left by Property Gal at 16/09/2024 - 18:26
Yes, as a leaseholder you would need your own insurance that covered alternative accommodation, the cost if which should then be recoverable from the freeholders insurance for liability