Housing association granting tenancy – Association ceasing to be fully mutual – Whether tenancy secure tenancy for purposes of Housing Act 1985 and 1988 – Whether tenants having statutory right to buy – County court dismissing claim – Appeal allowed
In December 1985 the respondent housing association granted to the appellant tenants a periodic tenancy of a residential property known as flat 16, 97B Knatchbull Road, London SE5. At that time, the association was a fully mutual housing co-operative with its membership restricted to tenants and perspective tenants, and it was registered with both the Housing Corporation and the Registrar of Friendly Societies. The appellants’ tenancy was not, at that time, a secure one under the terms of the 1985 Housing Act, since the “landlord condition” in section 79(1) of that Act was only fulfilled, in the case of housing association landlords, where the association was a non-mutual one.
In 1989 the assured tenancy regime was introduced by the Housing Act 1988. Section 35(5) of that Act created the possibility of a non-secure tenancy becoming a secure tenancy. Schedule 18 to the 1988 Act, which partially repealed section 80 of the 1985 Act, had the effect of reducing the list of landlords fulfilling the landlord condition, although a saving provision in para 4 of the schedule provided for certain exceptions to the repeals. The exception in para 4(a) applied where, immediately before the Act came into force, the landlord was “a body which, in accordance with the repeals, would cease to be within… section 80”. In 1990, subpara (c) was added to para 4 by the Local Government and Housing Act 1989, providing that the repeals “do not have effect in relation to a tenancy while it is a housing association tenancy.”
In December 1991 the association altered its rules and thereafter ceased to be fully mutual. Subsequently, the appellants claimed a right to buy the property under Part V of the Housing Act 1985. The association disputed the claim and an arbitrator was appointed under the Independent Housing Ombudsman Scheme to hear the matter. The arbitrator held that the tenancy was not a secure tenancy but an assured tenancy and that, consequently, the appellants had no right to buy. The county court dismissed the appellants’ appeal.
The appellants appealed, contending that the words in the additional subparagraph created a strong possibility of a tenancy becoming a secure tenancy at some time in the future if the landlord condition in respect of that tenancy was satisfied. It was argued that in the instant case the landlord condition was satisfied when the association converted itself into a non-mutual association.
Held: The appeal was allowed.
1. On its true construction, para 4(a) in Schedule 18 to the 1988 Act provided a saving for existing tenancies in respect of which, immediately prior to the commencement date of the statute, the landlord condition was satisfied, but would otherwise have ceased to be satisfied by virtue of the repeals. The saving was achieved by preserving the unamended landlord condition in relation to such tenancies, so that they would be secure tenancies at any time in the future when the interest of the landlord belonged to an authority or body within the unamended section 80 of the Act. So construed, para 4(a) did not impact upon the appellants’ tenancy, since immediately before the commencement date, the association was not an authority or body within the unamended section 80 list.
2. However, para 4(c) did create the possibility of a tenancy becoming a secure tenancy in the future if a landlord’s interest became vested in a non-mutual association. The meaning of the expression “housing association tenancy” in para 4(c) was to be found in Part VI of the Rent Act 1977. The appellants’ tenancy was a housing association tenancy within that meaning and the repeals did not affect it so long as it remained within that definition. Accordingly, the landlord condition in relation to the tenancy remained as it was immediately before the repeals took effect, and could be satisfied by a non-mutual association, which was included in the unamended section 80 list. If followed that when the association converted itself into a non-mutual association, the landlord condition was thereby satisfied, and the appellants’ tenancy thereupon became a secure tenancy.
Jan Luba QC (instructed by Thomas & Co) appeared for the appellants; Stephen Knafler (instructed by Evans Butler Wade) appeared for the respondent.
Thomas Elliott, barrister
