Business Clinic: Can we collect holiday bungalow rent arrears?

Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.

Here, Duncan Sigournay of Thrings advises on a property rent arrears question.

Q. We have holiday bungalows on our farm subject to a planning condition of a 28-day maximum stay rule.

We let one of the bungalows out continually to the same family for seven months. They have now left, but have rent arrears. Is the rent still enforceable, as they claim that the unit was let illegally under the 28-day rule?

A. Taking this back to basics, I presume there was a written tenancy agreement in place, signed by both parties and setting out the parties’ respective responsibilities and obligations such as rent, use of the property and payment of rent.

I also presume the tenant resided in the property with his family.

If so, there was a clear contractual relationship between the parties, which can be enforced.

Even without such a written tenancy, evidence should be available to establish that the tenant occupied the premises during that period.

The fact is he had the benefit of the accommodation, but is now wishing to avoid paying rent. 

See also: Business Clinic – undocumented grass lets – have we created a problem?

From time to time, landlords (and indeed tenants) may find themselves in breach of various regulations, statutes and bylaws.

But that does not necessarily invalidate the contractual relationship between parties. It can present difficulties if enforcement action is taken by the relevant authority which, in turn, requires agreements to be ended early in order to stop the breach.

However, that does not appear the position in your case. 

For the purposes of your query, I consider the arrears and the planning breach to be entirely separate. On that basis you would be entitled to pursue the tenant for the payment of arrears through the courts.

The tenant’s argument, if valid, would be a licence for tenants to avoid paying rent whenever there was any kind of breach on the part of a landlord, which would be nonsense.

It is unclear whether the tenant vacated before they were contractually entitled to do so. Again that could be brought into the proceedings to ensure you get what you are entitled to.

I suspect the tenant may be hoping you will not wish to attract publicity in relation to the planning breach by issuing proceedings for recovery of the arrears.

Although you may be wary of publicity, the tenant should also be wary, especially if he is trying to find alternative accommodation.

If proceedings are issued and the claim is successful, the tenant risks having a court judgment against them, which will make renting another property or getting a mortgage difficult if the usual credit checks are undertaken against the tenant.  

The breach of a planning condition restricting occupancy to 28 days is not, of itself, an offence.

However, it does open up the possibility of enforcement action being taken by the local planning authority (LPA), either through service of an enforcement notice, or a breach of condition notice.

Any enforcement action from the LPA would require the breach to cease within a specified time period, which would mean ending the tenancy. Failure to comply will be a criminal offence punishable by an unlimited fine.

Given the serious implications, if you are subject to enforcement action we recommend you seek legal advice as soon as possible.

That said, an LPA can only take enforcement action against a breach that is ongoing; if the tenants have moved out, the risk of enforcement action has passed for now.

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