Residential tenancies

Citation

Waterson, G. and Lee, R. (2001), "Residential tenancies", Property Management, Vol. 19 No. 4. https://doi.org/10.1108/pm.2001.11319dab.012

Residential tenancies

Residential tenancies

R v. West Sussex Rent Officer ex parte Haysport Properties Ltd (2001) The Times, 22 March 2001; [2001] EGCS 16

The question which arose in this case was whether substantial repairs carried out by the landlord to the demised premises could constitute "a change in condition" sufficient to justify the landlord in applying for an early revision of the registered fair rent. Yes, said the Court of Appeal. It was clear that under s.’70 of the Rent Act 1977 the state of repair was a factor to be taken into account in setting a fair rent. Moreover, in this case the repairs had been such as to transform a dwelling which had been unfit for human habitation into one which was fit for human habitation. The 1977 Act provided expressly that the landlord had the right to an early review of the registered fair rent if he changed the furniture in the property. An interpretation of the relevant provisions which did not accept that the landlord had a similar right where he had replaced the roof of the property "would properly be regarded as capricious".

Bankway Properties Ltd v. Penfold-Dunsford (2001) The Times 24 April 2001

In this case the Court of Appeal had to consider the effect, if any, of a provision providing for a five-fold rent increase on a fixed review date two years into the period of an assured tenancy. The initial rent was £4,680 per annum, from the commencement date in February 1994. The lease provided that in February 1996 the rent would increase to £25,000. The landlord knew that the tenants were dependent on housing benefit to pay the rent. Although the rent review clause had been drawn to their attention in a letter from the landlord's predecessor written in February 1994, and the landlord's agent had invited them to read the agreement properly before signing it, it was agreed that they had not in fact done so, that the rent provisions had not actually been explained to them, and that they had not noticed the provisions relating to the proposed increase in rent.

In the words of Lady Justice Arden:

The clause was not a pretence. Nor was the agreement a sham in the sense of Snook v. London and West Riding Investments Ltd [1967] 2QB 786. Nothing in the Housing Act 1988 restricted the rent the parties could agree. Whilst the clause was onerous and unusual, the landlord had done all that it needed to when it drew the tenant's attention to the rent review clause in this letter of February 1994. But the question was whether the clause was permitted by the 1988 Act. It was clear from sections 5 and 7 [of the 1988 Act] on their true construction that parties to an assured tenancy might not agree to vary the statutory scheme for security of tenure so as to reduce the level of protection available to the tenant … The clause was a device. It was in reality a provision which [if effective] enabled the landlord to obtain possession. [Although] it masqueraded as a provision for an increase of rent it was introduced to enable the landlord to bring the tenancy to an end when he chose. That provision offended against the mandatory scheme of the 1988 Act and was unenforceable. Thus, the order for possession and the judgement for arrears of rent had to be set aside.

Pill L.J. agreed: the tenancy agreement was to be construed as one which had been intended to give effect to the statutory purpose of providing long-term protection for the tenant. The intention of the clause was inconsistent with that objective. To permit its enforcement would be to defeat the main purpose of the agreement, and therefore the clause should be ignored.

The law is stated as it is understood to be on 10 May 2001.

Geoff WatersonRosalind Lee