Collecting rent can be a nuisance!

The Problem
Can a managing agent be treated as an owner of the property by collecting rent and therefore be liable for statutory breaches?

The Law
The Environmental Protection Act 1990 defines an "owner" of premises as a person receiving the rack rent whether on his own account or as agent or trustee for another person.

In Camden Council v. Gunby (a case before the High Court in July of 1999) a partner in a firm of surveyors collected rent as managing agent for the freehold owner. The Council served on the surveyor an abatement notice relating to a statutory nuisance arising from a structural defect in the property.

The surveyor argued he wasn’t the owner of the property and since the notice had to be served on the owner under the 1990 Act, he was not liable.

The court decided that the surveyor was liable for the statutory nuisance as an owner of the property since he was collecting the rent.

The Solution
Collecting rent is often one of the main tasks of the managing agent. In a multi-let building it would probably not be sensible for the agent to perform all management work other than collecting rent.

Managing agents or other rent collectors should therefore be aware of their liabilities and, as far as possible, check the financial strength of their client. The agents will clearly wish to deflect liability onto the actual owner and therefore the contracts between agent and owner may also need to be checked to ensure this point is covered.

Agents or trustees collecting rent should also ask their insurance brokers to confirm they are insured for any liability they suffer arising from statutory breaches.