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Ambiguous law leaves landlords in the dark

Ambiguity in legislation governing the landlord-tenant relationship has left some landlords in the dark about how to evict a tenant who does not pay rent, or who otherwise is in breach of the terms of his lease.

Readers of my columns over the last two weeks will know that the Rent Increases (Domestic Premises) Control Act 1978 (the "1978 Act") outlines the limited grounds upon which a tenancy that is governed by the 1978 Act (the "Controlled Tenancy") may be terminated.

However, the 1978 Act is silent regarding how a landlord can obtain possession of his property because his tenant has failed to pay the rent or the tenant has breached any other term of the Controlled Tenancy Agreement.

The 1978 Act does not indicate what needs to be included in a Notice to Quit or whether a Notice to Quit must even be issued by the landlord in such circumstances.

Nor is the procedure that a landlord must follow provided for in the 1978 Act.

One might assume that the Landlord and Tenant Act 1974 would provide answers. However, that legislation clearly states that it does apply to any contract of tenancy which is the subject of the 1978 Act.

Consequently, a landlord is without clear guidelines about how he should proceed.

Even the passing of new legislation last year did not address this ambiguity.

Prior to 2000, the 1978 Act applied to all domestic tenancies that had an Annual Rental Value ("ARV") of $9,900.00 or less.

The passing of the Rent Increase (Domestic Premises) Control Amendment Act 2000 (the "2000 Act") raised the applicable ARV from $9,900 to $16,200; this has pulled approximately half of Bermuda's residential units within the ambit of the rent control provisions of the 1978 Act.

However, the formalities and conditions that are applicable to Controlled Tenancies are still contained in the 1978 Act and have not been amended.

This has resulted in disputes between landlords and tenants about the manner in which a Controlled Tenancy should be terminated.

The Courts have in the past typically dealt with this quandary on a case-by-case basis.

One further matter that should be considered by both landlords and tenants of Controlled Tenancies following the amendments made by the 2000 Act is in relation to 'fixed term leases'.

A fixed term lease is a tenancy that is granted for a specific period of time, whether it be one month, one year, three years or even longer. It will automatically terminate at the expiry of the relevant period.

Last week, I mentioned that the 1978 Act was primarily introduced to provide tenants of Controlled Tenancies with security of tenure. However, entering into a fixed term lease would ordinarily circumvent such security.

Whilst the 1978 Act does not explicitly state that a fixed term lease cannot be entered into, it does provide that, with the exception of the limited grounds for termination of tenancies, no Controlled Tenancy shall terminate whilst the 1978 Act remains in force.

From this, it can be implied that fixed term leases of Controlled Tenancies cannot be enforced.

As with any area of the law, there are never any certainties when a party chooses to litigate.

However, when dealing with matters surrounding the rental of domestic premises, the onus is on the person bringing the action in Court to ensure that any notices and subsequent proceedings are issued under and in accordance with the appropriate legislation.

Therefore, should a landlord or tenant find themselves in any of the situations described above and have doubts about how to proceed, they should not hesitate to obtain formal legal advice prior to taking any action.

Attorney Susan Davis is a member of the Litigation Department of Appleby Spurling & Kempe. Copies of Ms. Davis' columns can be obtained on the Appleby Spurling & Kempe website at www.ask.bm.

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.