Whether tenancy protected under Rent Act 1977 or Housing Act 1988 – Whether section 34(1)(b) of Housing Act 1988 applicable – Whether low rent regime applied – Judge finding tenancy not protected – Appeal allowed
In 1960 the defendant’s father (F) purchased a property, 121 Sternhold Road, London SW2, and in 1974 the defendant (R) became a tenant of the whole of the ground floor. In 1976 F died and R’s mother (M) took over the property. From 1982 to 1990 R occupied only the back room on the ground floor, for which he paid a lower rent, while another tenant, S, occupied the rest of the ground floor. In March 1990 S moved out and R moved back to the whole ground floor, paying rent of £40 per month plus annual insurance. In November 1995 M’s trustee in bankruptcy sold the whole house to the claimant, A. In February 1998 R’s rent was increased to £600 per month.
In July 1998 A issued possession proceedings on the basis that R was an assured tenant in rent arrears. In January 1999 a second set of proceedings were issued. A claimed possession on the basis that the tenancy was exempt from protection, since it was created on or after 1 April 1990 and was at a low rent.
R claimed that he was a Rent-Act-protected tenant of the whole ground floor, as of March 1990. He contended that: (i) the tenancy was covered by section 34(1)(b) of the Housing Act 1988 so that it continued to be protected after the commencement of the Act; and (ii) the tenancy was not excluded from protection, either under the 1977 Act or as an assured tenancy under the 1988 Act, because it was a tenancy at a low rent. The second contention depended upon which definition of low rent applied. A tenancy created before April 1990 failed to qualify for protection if the rent was less that two-thirds of the rateable value of the property (the old definition). A tenancy created after 1 April 1990 failed to qualify for protection if the rent in Greater London was £1,000 per month or less (the new definition).
The judge found that the defendant had been a protected tenant, but held that section 34(1)(b) of the 1988 Act was only applicable to a situation in which a tenant voluntarily accepted a tenancy of suitable alternative accommodation. He held that: (i) the new definition of low rent applied, as S would have paid rent up to the end of the month; and (ii) the claimant would not have started paying rent until 1 April 1990, and because the defendant was paying less than £1,000 per month, the tenancy was not protected. Accordingly the judge granted an order for possession and a money judgment for arrears. The defendant appealed.
Held: The appeal was allowed.
1. There was nothing in section 34(1)(b) of the 1988 Act to suggest that the premises should be the same before and after the commencement of the Act, or to suggest that, if they were different, section 34(1)(b) was limited to that particular situation. See: Laimond Properties Ltd v Al-Sarkarchi (No 2) [1998] 30 HLR 1099. Moreover, the fact that the tenancy was granted by F in 1974 and a new tenancy was granted by M in 1990 did not mean that section 34(1)(b) was not applicable. Although it was unclear exactly when M had taken over the property, it was a reasonable inference that she had taken it over within a short time of F’s death in 1976, before the commencement of the 1988 Act. It made no sense to suggest that she could be the landlord for the purpose of granting a new tenancy on one day in March 1990, but not for the purpose of the old one that was surrendered at the same time.
2. The obvious inference from the evidence was that in 1990 S moved out and R moved in, and that the tenancy therefore began when R moved in or, at the very least, that an agreement for a new tenancy was made. Accordingly, the judge was wrong to conclude that the new tenancy started in April 1990. The old regime applied and as the rent was more that two-thirds of the rateable value of the property, it was not a tenancy at a low rent. Therefore it could be concluded that the defendant was a protected tenant under the Rent Act 1977.
Robert Bailey-King (instructed by Ronald Fletcher Baker) appeared for the claimant; Michael Cronshaw (instructed by Preuvneers & Co, of Mitcham) appeared for the defendant.
Thomas Elliott, barrister
