Property Law uk

Maintained by Gary Webber

Rent Act 1977

This pages contains material dealing with
  • Access by landlord to carry out works
  • Mixed use premises
  • Obtaining possession by misrepresentation
  • Statutory tenancy - requirement of occupation
  • Succession
  • Suitable alternative accommodation
  • Transition to assured tenancy regime
  • Losing protection on grant of assured shorthold

Access by L to carry out works

Akram v Adam
[2002] EWCA Civ 1679; [2003] HLR 28.

Introduction

Under s116 of the Rent Act 1977 a county court may make an order in respect of a statutory tenancy that allows the landlord to enter and carry out works. However, such an order can only be made where the works are specified in one of a number of specifically listed grants (subs(3)).

Facts

In this case L wanted to carry out certain works so as to convert Ts room into a self-contained unit that would provide T with suitable alternative accommodation within s98(1). However, there was no grant application. Nor did the judge consider the question of interim accommodation as required by subsection (4).

Decision

Hence, the judge had no power to make an order under s116 and his purported order was of no effect. It is not possible to make an order under s98(1)(a) (suitable alternative accommodation) requiring T to move out so that the works can be done because under that section the courts only power is to make an order for possession if the suitable alternative accommodation is available at the date of the order or will be available when it will take effect.


Mixed use premises

Tan v Sitkowski
[2007] EWCA Civ 30.

Where premises were let (after the Rent Act 1965 came into force) for mixed business and residential use the premises were not "let as a separate dwelling" within s1 of the 1977 Act. The tenancy was not therefore protected. The tenant cannot, simply by unilaterally ceasing the business use, arrogate to himself protection under the Rent Act 1977. (Prior to the 1965 Act, a mixed use tenancy was protected).

Where the premises were originally let for purely residential purposes, and the tenant subsequently uses them wholly or partly for business purposes Part II of the 1954 Act applies so that they are no longer protected by the Act. However, if he ceases to use them for business purposes the premises do once again become subject to the protection of the 1977 Act.


Obtaining possession by misrepresentation

Clements v Simmonds
[2002] EWHC 1652; 41 EG 178 (QBD).

Facts

Under s102 of the Rent Act 1977 the tenant is entitled to damages where a landlord has obtained an order for possession and it is subsequently made to appear to the court that the order was obtained by misrepresentation or concealment of material facts. In such a case the court may order the landlord to pay to the former tenant such sum as appears sufficient as compensation for damage or loss sustained by that tenant as a result of the order.

Facts

L had obtained an order for possession under Case 9 of Schedule 15 to the 1977 Act, i.e. by satisfying the judge that she reasonably required possession for occupation by herself. However, shortly after T gave up possession L gave instructions for the property to be sold.

Decision

The judge came to the view that the tenant would have left, and had not therefore been deprived of her home, but that she was deprived of the opportunity to negotiate a compensation package for loss of her statutory tenancy. He awarded her the sum he considered that she would have been able to obtain in such negotiations, £60,000.


Statutory tenancy

Requirement of occupation

Kerr v Stephens
[2006] EWCA Civ 187

Introduction

Cases on the Rent Act 1977 do not come up so often these days. Under that Act a person with protection starts out, under the contractual tenancy, as a "protected tenant". If the landlord wishes to recover possession the landlord must determine the protected tenancy by a notice to quit (assuming that it is a periodic tenancy). This then gives rise to a statutory tenancy. The landlord will only be entitled to possession if he can prove a ground for possession. However, the statutory tenancy only continues for so long as the tenant occupies the property "as [her] residence"; in effect, as her home (s2(1)(a) of the Rent Act 1977). Whether or not the tenant has continued to occupy the property as her residence has been described as "a jury question to be determined by applying ordinary common sense" (Beck v Scholz [1953] 1 QB 570, Evershed MR at 575).

Facts

In this case the defendant was in fact a statutory tenant by succession but the same principles apply. The landlord contended that she had ceased to occupy the dwelling as her home and so had ceased to be a statutory tenant.

The tenant contended that the behaviour of a new neighbour had been so upsetting that she was "driven out". Thereafter she spent a considerable amount of time at a friend's house some five to ten minutes walk away. She took her meals there, took baths there and washed her clothes there.

First instance

However, the judge found that the dwelling was still her home and that she was merely a guest at the friend's house. She continued to sleep in her home two or three nights a week, and visited the property daily. He therefore found that she still had a sufficient connection to the property and continued to be the statutory tenant. The judge said this:
    "In my judgment, the correct answer to [the preliminary issue] which is, as the cases make clear, essentially a jury question or one of fact and degree - and in this case I consider it to be essentially one of degree - is that Miss Stephens has not ceased to occupy No. 6 as her home. It has been her home all her life. Although her new arrangements have reduced the importance of No. 6 to her as a place to resort to, her connection with it is still sufficiently great that she still occupies No. 6 as her home, or as her residence."
The landlord appealed.

Held

Appeal dismissed. The judge rightly directed himself that the issue raised the question of fact or degree which required to be approached in a commonsense way. Adopting that approach, he then proceeded to address the issue carefully and conscientiously.


Succession

Clore v MacNicol
[2004] EWCA Civ 1055

Facts

A Rent Act tenant died. Her son and daughter claimed to be entitled to succeed as the assured tenancy by succession. In circumstances where there is more than one person qualified under paragraph 3 of schedule 1 to the Rent Act 1977 to take an assured tenancy by succession, that paragraph provides that the person entitled to the assured tenancy shall be decided by agreement between them or, in default of agreement, by the county court. It is not possible for them to succeed as joint tenants.

Subsequently the son was prepared to let his sister have the tenancy. He wrote to the landlord stating:
    "..in order for Anita MacNicol to remain at the above address I hereby give up all rights to the tenancy to my sister".
The landlord argued that the letter constituted an assignment which would have been a breach of the assured tenancy by succession (s15 of the Housing Act 1988).

Held

The letter did no more than surrender the brothers' rights to his sister.


Suitable alternative accommodation

Amrit Holdings Co Ltd v Shahbakhti
[2005] EWCA Civ 339

Facts

This was a claim under the Rent Act where the landlord claimed possession on the ground that suitable alternative accommodation was available to the defendant.

The accommodation that the landlord said was available was owned by the defendant and was occupied by assured shorthold tenants.

To get hold of the accommodation it would be necessary to remove the tenants. It would also mean that the defendant would lose his income from the property and would have to re-arrange his financial affairs. He had lived in the subject property. On all the facts that judge held that it was not reasonable to make an order for possession.

Held

The CA refused to interfere with that decision. Buxton LJ:
    "In assessing that question in a case such as the present, it is important to remember that, on the appellant's argument, Mr Shahbakhti is required to rearrange his affairs and to take steps to eject his own tenants because the landlord wishes to remove him from a place which has been, on the evidence, his home for a period of 25 years

    The elements that he [the judge] had in mind were first, there would be no financial hardship to the claimants if the order were not made; even though they had a commercial interest and, the judge accepted, a legitimate commercial interest in getting an increased rental from the premises let other than from a controlled tenancy without incurring, as a landlord perhaps normally would, any cost in providing the alternative accommodation to their tenant. On the other hand, Mr Shahbakhti would lose his investment in Loxham House. He will have the expense and trouble of bringing proceedings against his tenants, and he would have his investment arrangements interfered with. He would also lose money in direct financial terms in that he would lose the current passing rent of £953 per month on Loxham House and save only the sum of £700 per month that he is currently paying at Karridale Mansions. That sums out at some £3,000 per annum, a sum that at the very least is not de minimis".

Suitable alternative accommodation and reasonableness

Whitehouse v Lee
[2009] EWCA Civ 375

Summary

A judge had erred in finding that it was reasonable to make a possession order, as he had not properly taken into account all the relevant factors.

Facts

T (and her husband) had been a Rent Act tenant of a flat for 45 years, had raised her children there and was active in the local community having set up a local neighbourhood association. L and the other beneficiaries of the property were at retirement and wished to untangle their associations and sell the property with vacant possession in order to reduce their ongoing obligations and to maximise their profit on sale. They purchased a property that was less than a mile away in a mansion block and offered that as suitable alternative accommodation. When T and her husband refused to take up the new accommodation, they sought possession under section 98 (1) of the Rent Act 1977.

The judge found that the proposed accommodation was suitable. Further he stated that despite the emotional and social impact a move would have on T, it was reasonable for L to seek possession and made an order accordingly. (The husband who was a joint tenant died between the hearing and the appeal).

Appeal

The approach to the issue of reasonableness was set out by Rimer LJ at para 23:
    “The question of whether it is or is not ‘reasonable’ to make an order for possession in a case such as this is one of fact entrusted by the legislation to the trial judge. The determination of that question requires the judge to take account of all the facts, matters and circumstances relevant to it; and then to evaluate all of them in forming an overall factual judgment. The evaluation exercise is akin to, although different in kind from, the exercise of a discretion. It is important that this court should recognise the limits of the grounds upon which it can properly interfere with the trial judge’s evaluation. It is trite that it is irrelevant that the court forms the view that it might itself have answered the reasonableness question differently. The only circumstances in which it will ordinarily be open to the court to review the judge’s decision on that question will be if it is satisfied that he acted under an error of principle or that his decision was plainly wrong (Bracknell Forest Borough Council v Green [2009] EWCA Civ 238, paragraphs [22] to [30], per Mummery LJ). An appellate court’s approach to a challenge to such an ‘evaluation’ is therefore akin to its approach to a challenge to an exercise of discretion. "
The judge at first instance should not have narrowed his approach to reasonableness by just having regard to whether it was reasonable for L to seek possession balanced against the reasonableness of T and her husband wishing to stay in her home, but should have considered in the round whether it was reasonable to make the order. Such a consideration would have included an evaluation of the impact on L of not making an order. He had therefore misdirected himself as to the law. Further, given that a pecuniary gain was the only factor relied upon by L, the order was obviously wrong and the appeal was allowed.


Transition to assured tenancy regime

Joint tenants

Secretarial and Nominee Co Ltd v Thomas
[2005] EWCA CIV 1008

Introduction

This case concerned s34 of the Housing Act 1988, the transitional provision that protected existing Rent Act tenants, when assured tenancies were introduced on 15 January 1989.

Issue

The question asked in the case was: If A, a Rent Act tenant, took a new tenancy agreement after the commencement of the Housing Act1988 jointly with B, does B thereafter partake in the ongoing protection to which A would have been entitled if he, B, takes a new tenancy by himself (or with another, C), but without A?

Decision

The answer given by the Court of Appeal was: No. Rix LJ:
    "The obvious purpose of section 34(1)(b) is to extend protection of a Rent Act tenant into the new regime of assured tenancies. There appears to be nothing immediately striking about the subsection to indicate that it is intended to extend its protection to parties who become tenants of the landlord for the first time after the commencement of the new regime. the provision was aimed at protecting "existing tenants": (para 25)

    .. it seems to me that the whole premise of the transitional protection afforded by section 34(1)(b) is that the protected tenant was a Rent Act tenant on the commencement of the 1988 Act on 15 January 1989. It seems to me that such a requirement is inherent in the subsection. (para 33)


Losing protection on grant of shorthold

Truro Diocesan Board of Finance Ltd v Foley
[2008] EWCA Civ 1162

Summary

A Rent Act tenant lost his protection when he surrendered his tenancy and seven days later entered into an assured shorthold tenancy of the same property. The agreement for the new tenancy, although in place at the time the old tenancy was surrendered, did not provide sufficient continuity to bring the tenancy within s34 (1) (b) of the Housing Act 1988.

Facts

T was a Rent Act tenant. L sought possession in 2000. That action was compromised and an order made that
    “1B There be a declaration that the First Defendant was a tenant of the premises under a protected shorthold tenancy within the meaning of section 52 of the Housing Act 1980 and as at the date hereof there has been no grant of a further tenancy .."
Further, a schedule was attached to the order, which provided:
    "1) The First Defendant's existing tenancy of the premises at the Church School House . . . ("the property") shall be determined by the First Defendant delivering up possession of the property to the Claimant on or before 26 September 2001 on which date the Claimant shall arrange for the First Defendant's dinner bed and breakfast at the White Hart Hotel, Launceston.

    2) The First Defendant shall deliver up possession of the property by vacating the property for a minimum period of 24 hours and by delivering all keys to the property to the Claimant at the commencement of that period by delivery of the keys to Messrs Kivells at 2 Broad Street Launceston at or before 11.30 am on 26 September 2001 and collection of the keys on or after 12 noon 27 September 2001.

    3) On 27 September 2001 the Claimant shall grant to the First Defendant an assured shorthold tenancy of the property within the meaning of section 19A of the Housing Act 1988.

    4) The terms of the said shorthold tenancy shall include the following:
      (i) a fixed term of 5 years commencing on the date of the grant of the tenancy
      (ii) An initial rent of £320 per month payable in advance on 4th day of each month
      (iii) . . . .
      (iv) Clauses 3 to 5 contained in the Agreement date[d] 20 March 1987 attached hereto.
    The above tenancy being for a period in excess of 3 years is required to be by deed and now the parties to the agreement hereby sign this as a deed as witnessed below."
Each party then signed and delivered the document as a deed in the presence of witnesses. T handed the keys to L's agent on 26 September 2001 and collected them again a little over 24 hours later on 27 September.

In 2006, L served a s21 notice (under the Housing Act 1988) on the basis that T was an assured tenant. T maintained that he was still a Rent Act tenant and refused to go. Proceedings were issued. It was determined at a preliminary hearing that T was not bound by the declaration as to his status contained in the agreed order as it was based on the parties’ agreement and a tenant could not contract out of the Rent Act.

Issues

The remaining issue was whether immediately before his new tenancy, T was a protected or statutory tenant within the meaning of s34(1)(b) of the Housing Act 1988. T argued that he was on two grounds, the first was based on the interpretation of the 1988 Act, the second was a Human Rights Act point.

Construction point

Section 34(1)(b) of the Housing Act 1988 provides an exception to the rule that no new Rent Act tenancies can be created. It provides as follows:
    "(1) A tenancy which is entered into on or after the commencement of this Act cannot be a protected tenancy, unless—
      (a) it is entered into in pursuance of a contract made before the commencement of this Act; or
      (b) it is granted to a person (alone or jointly with others) who, immediately before the tenancy was granted, was a protected or statutory tenant and is so granted by the person who at that time was the landlord (or one of the joint landlords) under the protected or statutory tenancy;"
Section 45(1) provides:
    "(1) In this Part of this Act, except where the context otherwise requires,—
    "tenancy" includes . . . an agreement for a tenancy . . . ;"
If T had been a tenant immediately prior to the grant of the new tenancy to him, s34 (1) (b) would have assisted him. However, there was a gap of around seven days between surrender and the grant of the new tenancy. He did have an agreement for the new tenancy at the time of surrender, just no immediate right to possession.

In order to carry over the Rent Act status, the new tenancy must begin ‘immediately’ on the end of the old one. The court reiterated the point that it does not take much for continuity to be lost in landlord and tenant cases, so that a 24-hour gap would be sufficient for the protection to be lost.

T therefore needed to establish that tenancy in the context of s34(1)(b) included an agreement for a tenancy. He could not show that immediately before the new tenancy he had been a Rent Act tenant. However, he did have an agreement for a tenancy at that time. He relied on s 45 in order to import the wider meaning of tenancy into s34.

It was held that s45 did not assist T as the context indicated otherwise. Not only did s34(1) (a) make a clear distinction between a contract for a tenancy and the tenancy itself, but also s34(1) (b) did not make sense in relation to an agreement for a tenancy.

An additional argument based upon the decision in Walsh v Lonsdale (1882) 21 Ch D 9, was rejected. It was contended that the agreement for a tenancy created a tenancy. However, it was fatal to that argument that there was a specific date in the future referred to for the granting of the tenancy; possession was not immediate.

Human Rights

It was also argued that if s34(1)(b) did not carry over the Rent Act tenancy T’s article 8 rights would be infringed. The argument was rejected. Moore-Bick LJ at para 35:
    “I do not think it can be said that section 34(1)(b) of the Housing Act 1988 itself, if interpreted in accordance with the natural meaning of words used, gives rise to an infringement of the tenant's rights under article 8. It is quite true that its effect in this case is that Mr. Foley's new tenancy did not benefit from protection under the Rent Act, but that was a matter of his own choosing and there is nothing in the Convention which prevents a person of his own choice from entering into a tenancy for a defined term subject to an obligation to give up possession on its expiry.”

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