Assured tenancy – Rent review clause – Statutory procedure – Tenancy agreement providing for review of rent – Landlord notifying tenant in writing of intention to initiate rent review procedure – Whether notice having to comply with statutory requirements – Housing Act 1988 – Appeal allowed
The appellant was a registered social landlord (RSL) that provided low-cost social housing to those in need. It was the freeholder of certain premises in Manchester, of which the respondent held an assured periodic tenancy under a housing association tenancy agreement. In practice, such agreements tended either to include their own contractual rent review provisions, such as in the present case, or to refer specifically to section 13 and/or section 14 of the Housing Act 1988.
In February 2006, the appellant initiated a review of the respondent’s rent by the service of an appropriate letter. The respondent referred the letter to the Rent Assessment Committee (RAC), which declared it to be invalid because it did not comply with section 13(2) of the 1988 Act. The High Court dismissed an appeal against that decision.
Irwin J interpreted the exclusion from section 13 by subpara (1)(b) of any tenancy “in relation to which there is a provision, for the time being binding on the tenant, under which the rent for particular period of the tenancy will or may be greater than the rent for an earlier period” as relating to a tenancy agreement with a fixed pre-agreed uplift, namely a tenancy where the actual new level of rent for the subsequent specific periods was actually set out in the tenancy agreement. Furthermore, statements made in the tenant’s handbook, which had come into the respondent’s hands, to the effect that a revised rent could be appealed to the RAC meant that the appellant was estopped from contending the contrary. The appellant appealed.
Held: The appeal was allowed.
Where an assured tenancy agreement included a clause setting out the machinery for a rent increase, the landlord was not required to comply with the rent review procedure provided in section 13 of the 1988 Act. The exclusion in section 13(1)(b) was not limited to cases where the rent increase was fixed by the tenancy agreement, but also applied where the agreement provided the machinery by which a rent increase might be implemented.
The words in section 13(1)(b) could exclude a term providing: (i) for a specified increase in rent; and (ii) that the rent might be increased on the happening of a certain event, for example where the landlord served a notice because of the words “will or may be”. Nothing in section 13(1)(b) limited it to clauses that provided for an increase of a fixed amount, as opposed to clauses that provided for an increase of unspecified amounts to be arrived at in a specified way. Furthermore, it would require clear wording to justify an interference with freedom of contract by limiting the exclusion to rent review clauses providing for fixed uplifts.
With regard to the statements in the tenant’s handbook, which did not in fact apply to the respondent, the jurisdiction of the RAC was entirely statutory and could not be reduced or enlarged by consent or estoppel: J&F Stone, Lighting & Radio Ltd v Levitt [1947] AC 209 applied.
Jonathan Seitler QC (instructed by Trowers & Hamlins, of Manchester) appeared for the appellant; the respondent did not appear and was not represented.
Eileen O’Grady, barrister
