Landlord and tenant – Rent assessment – Housing Act 1988 – Appellant landlord applying to first-tier tribunal for determination of rent under tenancy of residential premises pursuant to section 14 of 1988 Act – FTT finding no jurisdiction to determine application since respondent tenant holding regulated tenancy under Rent Act 1977 not assured tenancy governed by 1988 Act – Whether FTT wrongly applying provisions of 1977 Act – Whether having jurisdiction to determine rent – Appeal allowed
In 1980, the tenants of a residential property, who did not themselves live there, allowed the respondent into occupation of the premises. In 1984, the appellant acquired the freehold of the property. They later became aware that the tenants were not living at the property and they brought possession proceedings against the tenants and the respondent. The appellant claimed that the tenants’ tenancy had come to an end and that, no longer being in occupation, they were not entitled to the status of statutory tenants under the Rent Act 1977; further, that the respondent was an unlawful sub-tenant who had no right to remain after the termination of the tenants’ interest. The proceedings were compromised on the terms of a consent order, which included the grant of an assured tenancy to the respondent in 1994 for a term of one year at a rent of £23.50 per week.
From 1994 onwards, the parties treated the tenancy as an assured tenancy governed by the Housing Act 1998. Between 1994 and 2013, notices of increase of rent given under section 14 of the 1988 Act were referred on five occasions to rent assessment committees and on four of those occasions the rent was increased to the prevailing market rate.
In 2013, the appellant sought a further increase to £250 per week but the first-tier tribunal (FTT) struck out that application, holding that it did not have jurisdiction under section 14 because the respondent’s tenancy was caught by section 45(1) of the Rent Act 1977 and was therefore a regulated tenancy, the rent under which could not be increased save as provided by the 1977 Act. The appellant appealed.
Held: The appeal was allowed.
The status of regulated tenant under the 1977 Act was not one which the parties to such a tenancy could contract out of. The FTT was therefore right to be concerned about the respondent’s true status and not simply to assume that a consent order agreeing that she should be granted an assured tenancy would be conclusive of that matter. On the face of it, the respondent had occupied the same house under a residential tenancy since before the commencement of the 1988 Act and would, initially at least, have been a regulated tenant. Since the 1988 Act rent review procedures which the FTT was being asked to apply depended on the tenancy being an assured tenancy, it was legitimate for it to investigate that question.
The evidence before the FTT showed that the respondent had entered into a new tenancy agreement in 1994, after the commencement of the 1988 Act, pursuant to a consent order made by the court. Although that tenancy had been granted after the commencement of the 1988 Act, it might nonetheless have been a protected tenancy under the 1977 Act if one of the circumstances specified by section 34(1) existed. The relevant provision was section 34(1)(b), under which the tenancy might be a protected tenancy if, first, it was granted to a person who, immediately before the grant, was a protected or statutory tenant and, second, it was granted by a person who was the landlord under the protected or statutory tenancy. The first condition was satisfied where, on the evidence, the respondent had been a protected or statutory tenant immediately before the grant of the 1994 tenancy. However, the second condition was not fulfilled since the evidence did not show that the appellant had been the respondent’s landlord under that tenancy.
It was for the respondent to adduce sufficient evidence to establish that her tenancy was not an assured tenancy. Since that tenancy had been granted after the commencement of the 1988 Act, it should be treated as being an assured tenancy unless the contrary was demonstrated. While the FTT was entitled to be satisfied that the respondent was a protected or statutory tenant of the premises immediately before the 1994 tenancy agreement was entered into, it was not entitled to be satisfied that the appellant had been a party to that protected or statutory tenancy. The appellant denied the existence of any such relationship and the respondent had neither asserted in terms that the appellant was her landlord nor produced any document to that effect. The FTT had failed to direct its mind to that question.
The evidence showed that, prior to 1994, there had been no direct relationship of landlord and tenant between the appellant and the respondent. That was fatal to the application of section 34(1) of the 1877 Act. The parties had agreed that the 1994 tenancy was to be an assured tenancy and had acted at all times on the basis that it was such a tenancy. The FTT had not been entitled to assume, on the evidence before it, that the respondent’s tenancy was a regulated tenancy and its consequent decision to decline jurisdiction was flawed. Determining the issue afresh, the proper finding was that the respondent’s tenancy was not a regulated tenancy but was an assured tenancy and that there was jurisdiction to determine a rent under section 14 of the 1988 Act.
The FTT had erred in focusing on section 45(1) of the 1977 Act. Section 45(1) placed a limit on the rent recoverable during the statutory period of a regulated tenancy. The purpose of section 45(1) was to ensure that an agreement by a tenant to pay an increased rent during the statutory period of the tenancy was unenforceable and that only the registered rent was payable. Section 45(1) did not determine whether a tenancy entered into after the commencement of the 1988 Act was or was not a regulated tenancy. That question was answered by section 34(1).
Nor was the position affected by section 137(2) of the 1977 Act, under which a lawful sub-tenant, whose own landlord was himself a protected or statutory tenant, would become the direct tenant of the head landlord on the determination of the intermediate tenancy. There was no evidence that the original tenants had been protected or statutory tenants at any time after 1981, having ceased to occupy the property. Nor was there any evidence that the subletting to the respondent was lawful. A subletting in breach of a covenant against subletting was not a lawful subletting. While there was no evidence of the terms of the original tenant’s tenancy, a covenant against subletting would have been standard in residential tenancies of the 1970s and 1980s.
The matter was remitted to the FTT to determine the rent under section 14 of the 1988 Act.
James Tye, a director of Swanbrae Ltd, appeared in person for appellant; the respondent did not appear and was not represented.
Sally Dobson, barrister
