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News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the February / March 1999 issue

Tennancy validate by bank action - February / March 1999

A tenant granted an assured tenancy in contravention of mortgage conditions nevertheless gains fresh tenancy rights if accepted by the mortgagee. This was the finding of the Court of Appeal in the case of Mann v Nijar and Anor. The property concerned had been bought for conversion with the help of a mortgage which forbad the landlord to grant leases without the banks consent. But consent was not sought prior to sub-letting the basement flat. Subsequently the developer ran into financial difficulties and surrendered the mortgage to the bank which in turn appointed a receiver who collected rents from the tenant. The property was subsequently sold without vacant possession. But the new owner cut off water and electricity supplies and, in the tenants absence, moved builders in and his possessions out. The condition contained in the mortgage would have entitled the bank to treat the tenancy and null and void, even if it had allowed possession to continue after finding out about the letting. But the inference from the facts of the case and especially the banks acknowledgement that it was not selling a property with vacant possession was that a new and valid tenancy had been created. The ousted tenant was awarded £2,500 in damages.

* Provided entry was peaceable, a mortgagor was entitled exercise a common law right to take possession of its property without first resorting to court action, ruled the Court of Appeal in the case of Ropaigealach v Barclays Bank plc. This was notwithstanding provisions of the Administration of Justice Act 1970 which lays down procedures for gaining possession by court action.

other artilces from the February / March 1999 issue