Former Rent Act tenants enjoy a protected status for themselves and other new joint tenants but only as long as the original tenant remains
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Key points |
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● A former Rent Act tenant who is granted a new lease after the commencement date of the Housing Act 1988 will retain protected status for himself and any new joint tenants ● Those other joint tenants cannot retain protected status if the original tenant leaves |
A substantial policy change in respect of private residential lettings took place on 15 January 1989, when the Housing Act 1988 came into effect. Rent control was swept away and it was the beginning of the end for security of tenure.
As is usual in such circumstances, parliament was prepared to sanction a change of this magnitude but only when it was satisfied that current Rent Act tenants would not be deprived of their existing rights.
Thus, the 1988 Act contained elaborate transitional provisions that were designed to achieve this result. It might reasonably be thought that, more than 15 years later, these had served their purpose and become effectively defunct but, as a recent Court of Appeal decision shows, this is not the case.
Rival arguments
The outcome in Secretarial & Nominee Co Ltd v Thomas [2005] EWCA Civ 1008; [2005] 44 EG 136 turned on the meaning to be given to section 34(1)(b) of the 1988 Act. This provides that:
a tenancy which is entered into on or after the commencement of this Act cannot be a protected tenancy [that is a Rent Act tenancy] unless… 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 a person who at that time was the landlord (or one of the landlords) under a protected or statutory tenancy.
The facts of Secretarial are illustrative. In August 1988, the appellant landlord granted a one-year Rent Act-protected tenancy of a flat in north London to three tenants, one of whom was A. By the time this lease expired, the 1988 Act had come into effect. A new one-year assured shorthold tenancy was then granted to A along with two new joint tenants. In 1990, A took a further one-year assured shorthold tenancy together with B and others. In 1991, A dropped out of the picture; B took a new tenancy with the respondent and two others. Thereafter, the respondent was a tenant under a succession of annual tenancies jointly with various other tenants.
The appellant sought possession of the flat. A section 21 notice was served on the current tenants, all of whom, except for the respondent, had vacated. He claimed that, by virtue of section 34(1)(b), he enjoyed Rent Act protection and was thus entitled to remain.
The respondent argued that section 34(1)(b) had conferred Rent Act protection upon A and his joint tenants under both the 1989 and 1990 tenancies. Even though A had then departed, B was still afforded that protection and was able to pass it on to her joint tenants (who included the respondent) under the next tenancy. This remained with the respondent throughout the subsequent tenancies and meant that he could not be evicted by the notice procedure applying to shorthold tenancies.
The appellant argued that section 34(1)(b) should be interpreted in the light of the definition section — namely section 45(3). This provides that, save where otherwise provided:
where two or more persons jointly constitute… the tenant… any reference to… the tenant… is a reference to all the persons who jointly constitute… the tenant…
Reluctant conclusion
This would mean that only where all the joint Rent Act tenants take a post-1988 Act tenancy can their protected status be maintained. So, for example, if W, X and Y were Rent Act tenants, a new tenancy that was entered into after 15 January 1989 could have Rent Act protection only if all three were the tenants, and this would be the same for any subsequent tenancy. Although it would make no difference if they were joined by a fourth tenant, Z, if W, X or Y were to drop out the Rent Act protection would be lost. On this basis, no Rent Act-protected tenancy had existed after 1989.
Although the trial judge did not believe that section 34(1)(b) had been designed to protect anyone other than the original Rent Act tenant, she also did not think that section 45(3) applied. She reluctantly concluded that once a Rent Act tenant was within section 34, this gave other joint tenants the same protection and that this could be passed on ad infinitum. It was from this ruling that the appellant appealed.
Somewhere in between
Rix LJ did not find either of the arguments attractive. It seemed clear that the primary intention had been to protect existing Rent Act tenants. However, it was equally apparent that, in order to protect such tenants, parliament had decided to allow any of their new joint tenants to share in that good fortune. The real issue was whether this protection could continue once the original Rent Act tenant exits the scene.
His lordship was not convinced that the wording of section 34(1)(b) lent itself to the further layer of section 45(3). He was satisfied that the former section starts with the concept of a “person” who was, prior to the 1988 Act, a Rent Act tenant and who thereafter (whether alone or jointly with others) enters into a new tenancy.
The transitional provisions are intended to benefit that person; they are not intended to benefit the former “tenant” (who might be more than one person) or the pre-existing “tenancy”. Thus, although it is not necessary for all of any joint Rent Act tenants to participate in the post-1988 Act tenancy (or series of tenancies), it is essential that at least one of the original Rent Act tenants is still a tenant in order for protection to continue. Accordingly, the respondent was not a protected tenant.
Sandi Murdoch, senior lecturer in law, Reading University
