0:02 AM, 16th September 2024, About An hour ago
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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.
