Upper Tribunal rules building can be demolished even with outstanding repair enforcement order

The Josephine Marshall Trust appealed against a decision of the First-tier Tribunal for Scotland Housing and Property Chamber (‘the FTT’) in an action originally raised by Nicholas Charlton, the tenant of the property in question.

An Upper Tribunal appeal from the Housing and Property Chamber can be heard by a single Sheriff sitting alone. This case was heard by Sheriff Nigel Ross.

‘A state of considerable disrepair’

The appellant was the owner of a cottage in Argyll, which was let under an assured tenancy to the first respondent in 2005. By 2016, the property was in a state of considerable disrepair. On 14 March 2017 the FTT issued a Repairing Standard Enforcement Order in respect of the property requiring the landlord to carry out such work as was detailed in a specialist report from a suitably qualified professional.

The appellants appointed an architect, who concluded that the building had reached the end of its useful life and suggested, stopping short of recommending, that the better course of action would be to construct a new house compliant with current building regulations. As a result, the report contained no recommendations about repair, preventing the appellants from complying with the full terms of the RSEO.

As a consequence, the appellants applied to Argyll and Bute Council for a demolition warrant, which was granted, and served a notice to quit to the first respondent. In October 2017 they applied to the FTT for an extension to the RSEO, which was not granted. In January 2018 they applied for an order for repossession under Ground 6 of Schedule 5 of the Housing (Scotland) Act 1988, that the landlord seeking possession intends to demolish or reconstruct the whole or a substantial part of the house. This was served with the RSEO still outstanding.

The action for repossession was refused, for the reason that, as a matter of law, a landlord could not “intend” to demolish a building while an RSEO was in place. Furthermore, planning permission for the demolition, which the local authority decided was necessary in this case, was not in place at the time the application for repossession was made, although it was granted a month later.

In May 2018, the appellants applied to the FTT to revoke the RSEO. This application was also refused, and the appellants were issued with a notice of failure to comply. This decision was appealed. This case amalgamated both of these appeals, as they were co-dependent on each other.

‘Unnecessarily complicated

In the Upper Tribunal’s decision, Sheriff Ross first addressed the repairing appeal. He acknowledged that the architect’s report had created a difficult position, saying that it “did not make the clear recommendations which the RSEO appears to have anticipated. This would not have mattered if the Tribunal had retained control over what works were and were not required. The Trust was left in the difficult position of trying to work out whether a recommendation had been made, and what works were required as a result.”

He went on to say that the Tribunal, in making the RSEO and requiring the appellants to obtain an expert report, was only permitted to exercise its powers under the Housing (Scotland) Act 2006, an exercise that “has become unnecessarily complicated[.]” Furthermore, he stated “[t]he 2006 Act is clear. The landlord must ensure that the property meets the repairing standard at all times during the tenancy. It is an absolute requirement. The property still does not meet that standard. The Tribunal cannot therefore be faulted for finding that the Trust is in breach of its duty.”

Whilst the appellants had made an undertaking to the Tribunal that the property would be demolished, there was no way of enforcing that. Sheriff Ross stated the RSEO could only be revoked “where it considers that the work required by the order is no longer necessary”. While Mr Charlton was in residence they acted rationally and within their powers in deciding they could not reach that conclusion.” Therefore, the repairing appeal was refused.

Turning to the repossession appeal, Sheriff Ross identified the key issue as being “whether the existence of an RSEO prevents the landlord forming an “intention” to demolish,” the determination of which was described as “a mixed question of fact and law.” There was no question of whether there was factual intention to demolish, so what remained to be addressed was the legal effect of the RSEO.

In Sheriff Ross’ view, the FTT “erred in considering that the RSEO acted as a legal barrier” to demolition. He stated that “[a]n RSEO operates independently of any one tenant, and continues even when that tenant departs. It is a specific statutory creation within a specific statutory regime, quite independent of the aim and intention of the 1988 Act. If the RSEO had the effect which the Tribunal anticipated, it would amount to a significant restriction on the right of the landlord to demolish a property.”

Said right was recently recognised by the Supreme Court in S. Franses Ltd v The Cavendish Hotel (London) Ltd [2018] UKSC 62. The practical effect was outlined by the Sheriff as the RSEO remaining “in place until the property is demolished, thereby guarding against any wiles on the part of the landlord, and then is apt to be revoked on application.” He went on to say “demolition will simply mean that an RSEO is superfluous, and the tenant has no further need of legal protection from a defective property. The tenant may have other rights following demolition, but they are not to be found in the RSEO regime.”

Furthermore, nothing was submitted by the first respondent suggesting that the appellants had “a genuine interest in obtaining vacant possession of a dilapidated property which is subject to an RSEO and from which they can derive no rent,” evidence of which would go against there being a true intention to demolish. Accordingly, the repossession appeal was allowed, and the repossession order granted.