In a recent decision of the Upper Tribunal, which reversed a decision of the First-tier Tribunal, the Upper Tribunal judge decided that a heritable creditor, who had not yet entered into possession of a property with sitting tenants could not be a ‘landlord’ for the purpose of the Housing (Scotland) Act 2006 (the 2006 Act) and therefore an application raised against them seeking to determine whether or not the underlying property met the Repairing Standard under the 2006 Act could not proceed.
What were the facts?
The tenants originally entered into a lease for the property concerned in September 2020 with a Mr Fever. The property had a standard security over it, originally granted in favour of one company which had subsequently been assigned to Pepper UK Ltd (the Appellants). In December 2021, the Appellants obtained a decree from the sheriff court which found that the Appellants were entitled to enter into possession of the property as creditors under the Conveyancing and Feudal Reform (Scotland) Act 1970. Crucially though, the Appellants, whilst entitled to enter possession had not taken or entered into possession. The tenants (prior to receiving notice to leave) lodged an application with the First-tier Tribunal complaining that the property did not meet the repairing standard and named the Appellants as their landlord in that application.
What did the First-tier Tribunal Decide?
The decision at first instance by the First-tier Tribunal was that the Appellants were landlords for the purpose of the 2006 Act and issued a Repairing Standard Enforcement Order. They relied upon the terms of section 20(5) of the 1970 Act which deems that a heritable creditor who is in lawful possession of security subjects has the rights and any obligations under and in terms of a lease assigned to them and that included obligations of repair and maintenance. They also looked at the interpretation of ‘landlord’ in the 2006 Act as including the landlord’s successors in title when coming to that decision.
Why were the First-tier Tribunal wrong?
In short, the Upper Tribunal Judge decided that the parts of the 1970 Act the First-tier Tribunal based their decision on only applied where the heritable creditor had actually entered into possession of the particular property, which had not happened in this case. Whilst the Appellants were entitled to possession, they had not entered into or taken possession of the property concerned. The Upper Tribunal also stated that the definition of ‘landlord’ as including successors in title did not help as the Appellants had an “interest, separate and distinct from ownership” and that “the landlord’s interest as owner has not transferred”. That being the case, the Upper Tribunal decided that “Mr Fever remains the heritable proprietor”. In those circumstances, any application to enforce the repairing standard should have been directed to Mr Fever and not the Appellants. The Upper Tribunal judge reversed the decision by the First-tier Tribunal and dismissed the tenant’s application. A copy of the Upper Tribunal decision can be found here.
If you require any further information or advice, please contact us or watch our blogs for further updates.
