metadata toggle
CHAPTER D
 
Exceptions to security of tenure
Introduction
 
All three statutory regimes giving security of tenure (Housing Act 1985, Housing Act 1988 and Rent Act 1977) contain exceptions. If the tenancy, or in some cases, the tenant, comes within one of the exceptions, full security of tenure cannot exist. In most cases the tenant has ‘a common-law’ tenancy which can be terminated by notice to quit. The exceptions are to be found in Housing Act 1985 Sch 1, Housing Act 1988 Sch 1 and Rent Act 1977 ss4–16 and 24. Housing Act 1985 Sch 5 lists exceptions to the right to buy.
For introductory and demoted tenancies (Housing Act 1985 Sch 1 paras 1A and 1B), see chapter L.
Employees (Housing Act 1985 Sch 1 para 2)
 
Legal Action 23Housing Act 1985 Sch 1 para 2 excepts from security of tenure occupiers who are employees of public sector landlords where their contract of employment requires occupation of the accommodation for the better performance of employment duties. The requirement may arise expressly or by implication from the contract of employment (para 2(5)).
Employees who occupy accommodation under an express term of their contract of employment for the better performance of their employment duties are licensees, not tenants, and so cannot have security of tenure under Rent Act 1977 or Housing Act 1988. See chapter B5. The following cases are therefore also of relevance to current or former employees who assert that they are tenants.
Supreme Court (formerly House of Lords)
 
Hughes v Greenwich LBC
[1994] 1 AC 170; [1993] 3 WLR 821; [1993] 4 All ER 577; (1995) 60 P&CR 487; (1994) 26 HLR 99; (1993) 92 LGR 61, HL
 
‘Compelling reason’ required to imply term that premises occupied for better performance of duties
A headmaster was provided with accommodation in the grounds of a special boarding school for children with physical handicaps. The express terms of his contract of employment (dating from 1967), provided for free board and lodging, but made no reference to the need to occupy any specific accommodation. On his retirement, he claimed that he was a secure tenant with the right to buy. A county court judge found that Housing Act 1985 Sch 1 para 2 did not apply because the headmaster could have fulfilled all the requirements of his employment if he had lived near to the school but not in the school grounds. He was granted a declaration that he was entitled to exercise the right to buy. The council appealed, contending that a term that he was required to occupy the house for the better performance of his duties should be implied into his contract.
The House of Lords rejected the council’s assertion that a term to such effect should be implied. This should be done only for a ‘compelling reason’, ie, if the council could prove that the employee could not perform his duties unless he occupied the particular accommodation.
Court of Appeal
 
Brent LBC v Charles
(1997) 29 HLR 876, CA
 
Employee who was resident key-holder not secure; requirement to live in accommodation means no more than it is a term of the contract; redundancy irrelevant
The appellant worked for Brent Council from 1984. In early 1988 his duties included acting as key-holder for a sports centre. Later in 1988, a flat at the centre became vacant and, in January 1989, he moved into it by agreement with the council. A charge was deducted from his wages as ‘service tenancy rent’. From 1989 to 1990 the council gave him leave of absence from his job but he continued living in the flat. In 1991 he was made redundant but remained in occupation. Notice to quit was served in 1993 and in 1996 a possession order was granted. The appellant sought leave to appeal on the grounds that: (a) his contract of employment had never ‘required’ him to reside in the flat so as to apply Housing Act 1985 Sch 1 para 2 and thereby exclude him from security of tenure, (b) in any event, no such requirement was in place during his leave of absence and (c), by leaving him undisturbed from 1991 to 1993, the landlords must have given him a right to possession not associated with his employment.
Dismissing the application, the Court of Appeal held:
1)The judge had been entitled to find on the facts an express agreement to a term requiring the appellant to be a resident key-holder. The word ‘requires’ means no more than that it was a term of the contract of employment with which the employee was required as a matter of fact to comply in order to perform his duty.
2)The question of whether the employment remained on such terms during the leave of absence was a matter of fact on which the judge, having doubted the credibility of the appellant’s evidence, was entitled to find against him.
3)The inaction of both the appellant and respondent for two years from 1991 to 1993 did not of itself give substance to a claim that a new tenancy could be implied.
Dyer v Dorset CC
[1989] QB 346; [1988] 3 WLR 213; (1988) 20 HLR 490, CA
 
Whether premises within curtilage of another building a question of fact and degree
The plaintiff was a college lecturer and tenant of a house within the college grounds. Although he was better able to perform his duties as a result of ‘living in’, there was no such requirement in his contract of employment. Therefore, he did not come within the exception for resident employees in Housing Act 1985 Sch 1 para 2 and he was a secure tenant. However, the landlords sought to deny him the right to buy on the ground that his home was within the curtilage of the college.
The Court of Appeal, while recognising that the house was within the grounds of the college as a whole, held that it was not within the curtilage of any one or more of the college buildings and was, therefore, not exempt from the right to buy. Whether or not a house is within the curtilage of another building is essentially a matter of fact and degree for the trial judge.
Elvidge v Coventry CC
[1994] QB 241; [1993] 3 WLR 976; [1993] 4 All ER 903; (1994) 26 HLR 281; (1993) 92 LGR 237, CA
 
Tenant lost secure status when promoted and new employment contract required him to occupy his (existing) home
The tenant began his employment with the council in 1978. He was offered and accepted the tenancy of a cottage in 1979. There was no express or implied term of his contract of employment requiring him to occupy the cottage and he therefore became a secure tenant on the introduction of the Housing Act 1980. In 1983, he was promoted and accepted a new employment contract which expressly required him to occupy the cottage for the better performance of his duties.
The Court of Appeal held that his tenancy was not secure. Housing Act 1985 Sch 1 para 2 uses the present tense ‘is’ in setting out the conditions for exemption from security. The question is therefore whether the conditions are presently satisfied. As there was now a contractual requirement to occupy the cottage, the tenant was not secure. He had effectively lost his security of tenure by taking the new employment contract, although the contractual tenancy itself had continued throughout.
Greenfield v Berkshire CC
(1996) 28 HLR 691; (1997) 73 P&CR 280; (1997) 96 LGR 327, CA
 
Where requirement to occupy a particular property ended, tenant became secure
The council let a bungalow in school grounds to the school caretaker for the better performance of his duties. In those circumstances, his tenancy was not secure (Housing Act 1985 Sch 1 para 2(1)). He was then made redundant but found another job with the council at a different school. He was allowed to stay in the bungalow until accommodation at the new school became available. He later resigned and received notice to quit. In the county court, the council was granted possession.
The tenant’s appeal was allowed. By the date of the termination of the tenancy it was no longer a condition of his employment that he should occupy the particular property. His current occupation of the bungalow was not ‘referable’ back to his last job because he had had new and different employment (distinguishing South Glamorgan CC v Griffiths (D2.7)).
Holmes v South Yorkshire Police Authority
[2008] EWCA Civ 51; [2008] HLR 33; 7 February 2008
 
Dwelling-house provided free of rent and rates to a member of a police force is not secure
PC Holmes lived in rent-free accommodation provided under statutory powers by the police authority. The police authority made a policy decision to divest itself of its remaining police dwellings so that any occupier who did not choose to buy his or her home would be required to vacate it in July 2008. PC Holmes sought a declaration that he was either a secure tenant or entitled in equity to remain in occupation until he retired. Recorder Armitage refused relief on either basis. PC Holmes appealed.
The Court of Appeal dismissed his appeal. HA 1985 Sch 1 para 2(2) provides that a tenancy or licence is not secure if the tenant is a member of a police force and the dwelling-house is provided free of rent and rates in accordance with regulations made under Police Act 1996 s50. The Court of Appeal rejected an argument that the tenancy was not ‘free of rent and rates’ because PC Holmes had to pay water charges, formerly known as water rates. The abolition of water rates by the Water Industry Act 1991 meant that there was no longer anything for the para 2(2) exemption to bite on, assuming, which was doubted, that ‘rates’ in para 2(2) included water rates in the first place. It also rejected a further argument that representations made by the police authority created an equitable estoppel against evicting police officers. Although PC Holmes was assured in December 2000 that, if he did not buy his home or move elsewhere, he could continue to live in it until he left the police service or retired, he had done nothing which he would not otherwise have done, and so had not acted to his detriment in reliance on the authority’s promise. It is for the party claiming detriment to show that he or she sustained it. PC Holmes would have continued for as long as he could with the undoubted benefit of rent-free accommodation even if the assurance of security had not been given because, financially, he had no other option. He had not suffered any appreciable harm by reason of his reliance on the authority’s assurance.
South Glamorgan CC v Griffiths
(1992) 24 HLR 334; [1992] 2 EGLR 232; [1992] NPC 13, CA
 
Retirement did not result in tenancy becoming secure
The council bought a house on a housing estate near a school, for occupation by the school caretaker. The caretaker occupied the house as his home until his retirement. The council then gave notice to quit, relying on Housing Act 1985 Sch 1 para 2 to deny security of tenure.
The Court of Appeal upheld a possession order. It had been an implied term of the employment contract that the tenant would take the house ‘for the better performance of his duties’ and so para 2 excluded secure status. The tenant’s retirement did not revive the security that parliament had taken away.
Surrey CC v Lamond
(1999) 31 HLR 1051; [1999] 12 EG 170; (1999) 78 P&CR D3, CA
 
Term implied that school caretaker required to occupy premises for his employment
Mr Lamond began work for the council as a school caretaker in 1970. He moved into accommodation owned by the council near the school. After he stopped working for the council a possession order was made. HHJ Catlin held that he was not a secure tenant and that the court could imply into Mr Lamond’s contract a term that he should live at the premises for the better performance of his duties within the meaning of Housing Act 1985 Sch 1 para 2(1).
Mr Lamond appealed unsuccessfully to the Court of Appeal. The correct approach to be taken by a court in the light of Hughes v Greenwich LBC (Hughes v Greenwich LBC) is to find out what duties the employee was required to perform. Having regard to the nature of these duties, the court should then ask itself the question whether or not it was practicable for those duties to be carried out if the employee did not live on the premises in question. A term that an employee was required to live in a property for the better performance of his duties should only be implied if there are compelling reasons to do so. Where, as on the present facts, there was a requirement to attend at the premises where the occupant was employed both in and out of hours and where it would not be practicable to carry out those duties without living at the provided premises, because there was no other accommodation nearby, such occupation was ‘for the better performance of his duties’. The court took into account the fact that he was required to be on call for security reasons, deliveries, supervising contract workers and week end and evening work. There was a clear distinction between the position of a caretaker and that of a headmaster as in Hughes v Greenwich LBC (Hughes v Greenwich LBC).
High Court
 
Godsmark v Greenwich LBC
[2004] EWHC 1286 (Ch); [2004] HLR 53
 
Requirement not a sham and applied despite change of accommodation and employer
Mr Godsmark was employed from 1990 at a local authority residential special school. His conditions of employment required him to reside in accommodation on the school site for the better performance of his duties. In 1993 and 1995 he moved to other properties also owned by the local authority on the school site. In January 2003 a trust company took over the running of the school from the local authority and Mr Godsmark’s employment was transferred to it. The trust went into occupation of the school and Mr Godsmark’s rent for the accommodation was paid to the trust. In April 2003 Mr Godsmark issued proceedings claiming that he had the right to buy the accommodation as a secure tenant. The local authority denied that he was a secure tenant, relying on Housing Act 1985 Sch 1 para 2. HHJ Welchman held that (a) the requirement for Mr Godsmark to live in a property at the school was not a sham; (b) there had been an implied variation of his employment so as to require him to live in the accommodation to which he moved in 1993 and 1995; and (c) although Mr Godsmark had ceased to be employed by the local authority after the transfer, his occupation of the accommodation was still referable to his employment so that he remained within the exception.
Hart J dismissed his appeal. There was no doubt that there was a consensual variation of the terms of the employment contract when Mr Godsmark moved. The requirement that he live in the first accommodation plainly did not remain following his move. ‘Slender as the evidence appears to have been’, the judge was entitled to draw the inference that the variation did not expunge completely the requirement to live in the first accommodation and that the offer was to substitute the new accommodation in the existing terms of employment. Furthermore, Mr Godsmark’s occupation of the property at the date when he issued his proceedings was still referable to his former employment by the local authority. As a result the exception in Sch 1 para 2 continued to apply. Mr Godsmark was not a secure tenant and was not entitled to exercise the right to buy.
Hertfordshire CC v Davies
[2017] EWHC 1488 (QB), 21 June 2017
 
Service occupancy determined on date employment ended; no requirement to serve notice to quit that complied with Protection from Eviction Act 1977 s5
Mr Davies was employed by the council in January 2003 as a ‘resident caretaker’ at a school. His job description stated that ‘attendance at evenings and weekends was essential’ and that ‘presence on site was essential for reasons of security: “the post holder must be residential”’. The letter offering him employment stated: ‘As a condition of your employment you will be required for the better performance of your duties to occupy the accommodation provided at [the school bungalow].’ He signed a document headed ‘Service Occupancy – Tenancy Agreement’. It stated: ‘Since your occupation of the dwelling is a condition of your employment with the council, your right to live in the dwelling will end automatically when your employment with the council ends …’ He lived in the bungalow with his family. The rent payable was initially £75.05 per month. In September 2014, after Mr Davies underwent surgery, the job description was revised to provide that: ‘This is a residential role with the post holder may be required to live on site in school provided accommodation [sic].’
In June 2015, after a disciplinary hearing, the council dismissed Mr Davies for gross misconduct. On 16 June 2015, the council served a notice to quit, dated 12 June 2015, requiring Mr Davies to give up possession on 10 July 2015. The council issued proceedings for possession on 10 September 2015. The claim was transferred to the High Court because one of the remedies sought in the defendant’s counterclaim was a declaration that Housing Act 1985 Sch 1 para 2 was incompatible with his rights conferred by the European Convention on Human Rights (ECHR).
Laing J found that, as a matter of fact, Mr Davies’ occupation was, at the inception of the agreement, for the better performance of the defendant’s duties and that the agreement created a service occupancy, not a lease. Although it was common ground that the notice given by the council did not comply with Protection from Eviction Act 1977 s5, no notice to quit was required to terminate the agreement, as it ended automatically in accordance with its terms when the defendant was dismissed. Section 5(1A) only applies where a notice to quit is the mechanism which is used to bring the arrangement in question to an end.
The decision by the council to enforce the agreement in accordance with its terms was the exercise of a function to which Equality Act 2010 s149 and Children Act 2004 s11 could apply in theory. However, neither of those duties conferred a private law right on the defendant. That meant, on the authority of Mohamoud v Kensington and Chelsea RLBC (Mohamoud v Kensington and Chelsea RLBC) and Hackney LBC v Lambourne (1993) 25 HLR 172 (Hackney LBC v Lambourne), that even if the defendant could have applied for judicial review of the decision to serve the notice to quit, on the grounds that the claimant had not complied with those public law duties, any failure to comply with them would not provide a defence to the claim for possession.
With regards section 149, there was ‘no convincing evidence that the defendant had the protected characteristic of disability at the date when the notice to quit was served’ (para 107). The judge also rejected arguments that service of the notice to quit was unlawful because there was a dispute about the defendant’s dismissal and because no regard was paid to the defendant’s Article 8 rights. There was no incompatibility with the ECHR. The council was entitled to possession.
Wragg v Surrey CC
[2008] EWCA Civ 19; [2008] HLR 30; (2008) Times 19 March; 1 February 2008
 
The court should look at all the circumstances in deciding whether the required occupation is for the better performance of the employee’s duties
Mr Wragg was employed by the council as a countryside ranger, with duties relating to the management and conservation of areas of common land in Surrey. He lived in a house owned by the council. His contract of employment stated:
It shall be a condition of your service … that you will occupy, on a permanent and fulltime basis, a property to be provided by the county council. This property is provided for the better performance of your duties.
He served notice under Housing Act 1985 s122 claiming to exercise the right to buy. The council served a notice under section 124 denying that he had a right to buy, relying on the exclusion from secure tenancy status in Sch 1 para 2(1) (premises occupied in connection with employment). He brought a claim in the county court under section 181 for the determination of that issue. The claim was decided on the assumption that he was a tenant. After a detailed review of the evidence, including the work carried out by Mr Wragg since 1984, HHJ Reid QC found that Mr Wragg’s contract did not fall within the exception in para 2(1). The council appealed.
The Court of Appeal allowed the appeal. Richards LJ stated that:
[para 2(1)] is to be construed as laying down two distinct conditions: first, that ‘his contract of employment requires him to occupy the dwelling-house’; secondly, that the requirement is ‘for the better performance of his duties’. The first condition looks only to the terms of the contract: the question is simply whether the contract contains such a requirement or not. The second condition, however, raises an issue of fact outside the contract: the question is not whether the contract states that the requirement is for the better performance of his duties, but whether the requirement is in fact for the better performance of his duties … [The second condition] should be construed as including an objective test: ‘for’ is to be read as ‘to enable’, the essential question being whether the required occupation of the property is intended to promote, and is reasonably capable of promoting, the better performance of the employee’s duties.
The court should look at all the circumstances in deciding whether the required occupation is for the better performance of the employee’s duties, including the reasons given for the imposition of the requirement to occupy the property, the considerations taken into account in imposing that requirement, and the factual history in so far as it casts light on whether occupation of the property was or was not reasonably capable of leading to better performance of the employee’s duties. In this context, ‘better’ is a true comparative. The question is whether or not the requirement to occupy the house is for the better performance of the employee’s duties as compared with the position if there was no requirement to occupy.
In this case, the contractual requirement to occupy the house provided by the council was imposed under the council’s policy. There was no reason to doubt the council’s evidence that the policy about tied accommodation was one for which there was a continuing justification. The various considerations taken into account by the council in maintaining and applying its policy were all relevant and valid. There was good reason to consider that the required occupation of a house provided by the council was intended to promote, and was reasonably capable of promoting, the better performance of his duties and thus was for the better performance of his duties. The occupation of the house fell squarely within para 2(1) and Mr Wragg was not entitled to exercise the right to buy.
Temporary use pending development (Housing Act 1985 Sch 1 para 3)
 
Housing Act 1985 Sch 1 para 3 provides that a tenancy of premises acquired for development and temporarily used as housing accommodation pending that or other development is not secure.
Court of Appeal
 
Attley v Cherwell DC
(1989) 21 HLR 613, CA
 
Where accommodation acquired for development exclusion continued to apply despite change in ownership and proposed development
The tenant lived in a house acquired by a board of health in 1879 for sewage works. It was appropriated by a borough council in 1972 under the Town and Country Planning Acts and transferred to the present council on local government reorganisation in 1974.
The Court of Appeal held that: (a) the land had been acquired in 1974; (b) Local Government Act 1972 s254(3) had the effect of continuing the original purpose of acquisition, ie, development; and (c), on the evidence, development was intended, even though it might not be the same type of development as had originally been envisaged. All the requirements of Housing Act 1985 Sch 1 para 3 were present and so the tenant was not secure.
Hyde Housing Association Ltd v Harrison
(1991) 23 HLR 57; [1991] 1 EGLR 51; [1991] 07 EG 131, CA
 
Exclusion did not require immediate landlord to have acquired land for development
The Department of Transport acquired property for a road-widening scheme and then granted the association the right to use it for housing purposes.
The Court of Appeal rejected the argument that Housing Act 1985 Sch 1 para 3 required that the immediate landlord be the body which acquired the land for development. There are two distinct requirements: first, that the premises are on land acquired for development and, second, that they are used as temporary accommodation pending development. The conditions of the paragraph were fulfilled and the occupier was not secure.
Lillieshall Road Housing Co-operative Ltd v Brennan
(1992) 24 HLR 193, CA
 
Occupiers became secure after change in plans and redevelopment no longer pending
In 1969, Lambeth LBC declared a clearance area and, in 1971, compulsor-ily purchased properties within it with a view to demolishing them. Later, the council decided to rehabilitate the properties and so passed them to the co-operative to use as housing accommodation. The council was never able to finance the rehabilitation scheme. However, in possession proceedings, the co-operative contended that the original acquisition for demolition was an acquisition for ‘development’ and that the tenancies were excluded from security of tenure by Housing Act 1985 Sch 1 para 3. Its evidence about the prospect of development of the house occupied by the defendants or the land around it in the foreseeable future was, however, vague, with the relevant council officer stating that he was ‘not sure’ what the council’s plans were, except that retention and improvement of the housing were more likely than demolition and clearance.
The Court of Appeal held that the evidence was insufficient to support a finding that the land was still held pending redevelopment. Accordingly, the occupiers were secure tenants.
Private sector leasing (Housing Act 1985 Sch 1 para 6)
 
Housing Act 1985 Sch 1 para 6 excepts from the security provisions what is commonly called ‘private sector leasing’. It applies when a private owner leases a property with vacant possession for use as temporary housing to a public landlord, which then sublets to an individual occupier. The subtenancy is excepted from secure status to ensure that vacant possession can be obtained at the expiry of the head lease.
Court of Appeal
 
Haringey LBC v Hickey
[2006] EWCA 373; [2006] HLR 36; (2006) Times 5 June
 
Tenant secure because not enough for lease to provide that lessee would yield up vacant possession at end or sooner determination of term
In 1996, Vinayak Patel leased a flat ‘with vacant possession’ to Haringey LBC for a term of one year nine months. The council covenanted not to use the flat except as ‘temporary housing accommodation’. Although the lease included provision for Mr Patel to obtain vacant possession at the end of the term, it did not include provision for him to obtain vacant possession ‘when required by him’. In January 1997 the council granted a subtenancy to Ms Hickey. It was described as a ‘private sector leasing scheme: form for non-secure subtenancy’ (see Housing Act 1985 Sch 1 para 6). Later, while Ms Hickey was still living in the flat, Mr Patel granted the council a further lease, this time for a term of three years from 19 September 1997. In August 2003 the council served a notice to quit on Ms Hickey and then, in December 2003, sued for possession and rent arrears of £5,358. Ms Hickey defended on the basis that she was a secure tenant because her subtenancy was outside the provisions of para 6 because (1) the flat was not leased with vacant possession when the 1997 lease was granted because she was then in lawful possession; and (2) the lease did not include provision for the lessor to obtain vacant possession ‘when required’. District Judge Armon-Jones held that para 6 did apply and that Ms Hickey was not a secure tenant. He made a possession order. Ms Hickey appealed.
The Court of Appeal allowed the appeal. As between Mr Patel and the council the premises were let with vacant possession. Paragraph 6(a) was only concerned with the position as between Mr Patel and the council. The actual occupation of Ms Hickey at any given time was immaterial. However, the terms of the head lease did not ‘include provision for the lessor to obtain vacant possession from the landlord on the expiry of a specified period or when required by the lessor’ (para 6(b)). It was not sufficient for the lease simply to provide (as it did) that at ‘the end or sooner determination of the term’ the council would yield up the premises ‘with vacant possession’ to him.
Tower Hamlets LBC v Abdi
(1993) 25 HLR 80; [1993] 1 EGLR 68; [1993] 06 EG 102; (1992) 91 LGR 300, CA
 
Arrangement gave council vacant possession and requirements of Housing Act 1985 Sch 1 para 6 satisfied
Mrs Abdi was accepted by the council for rehousing as a homeless person and, pending an offer of permanent council accommodation, was placed in ‘private sector leasing’ accommodation. The council served notice to quit and began possession proceedings on the basis that Housing Act 1985 Sch 1 para 6 was satisfied and the premises were not secure. The tenant asserted that, on the true construction of the agreement between the private owner and the council, the latter had not been given ‘vacant possession’ and/or the former had not retained a power to recover possession, as required by para 6.
The Court of Appeal found that, although described as a ‘licence’, the arrangement gave the council vacant possession and, as a matter of construction, reserved a right to the owner to determine it when required. Paragraph 6 was satisfied, the tenant was therefore not secure and possession was granted.
Tower Hamlets LBC v Miah
[1992] QB 622; [1992] 2 WLR 761; [1992] 2 All ER 667; (1992) 24 HLR 199; [1992] 1 EGLR 39; [1992] 18 EG 147; (1992) 90 LGR 151, CA
 
Housing Act 1985 Sch 1 para 6 exclusion did not require council to have a lease rather than a licence
The council took a property under licence from a private owner and then granted the defendant a licence to occupy. It later served notice to quit and sought possession. For the occupier, it was argued that a licence from a public landlord was the equivalent of a tenancy (Housing Act 1985 s79(3)) and that Housing Act 1985 Sch 1 para 6 could not apply because the council had taken a licence rather than a lease from the private owner.
The Court of Appeal held that para 6 was intended to apply to all arrangements by which a private owner granted lesser rights than the freehold to a council. Accordingly, the reference to ‘lease’ could be read as encompassing ‘licence’. Possession was granted.
Westminster CC v Boraliu
[2007] EWCA Civ 1339; [2008] 1 WLR 2408; [2008] HLR 42; 2 November 2007
 
A tenancy may come within both paras 4 and 6 of Schedule 1 to the Housing Act 1985
Westminster leased premises from Pathmeads Housing Association. That lease contained a stipulation that Westminster should not ‘use the premises or any part thereof otherwise than for the purposes of temporary housing accommodation in accordance with the provisions of paragraph 6 of Schedule 1 of the 1985 Act’. It also provided that ‘on expiry of the term … or when required by the lessor … the council shall give to the lessor vacant possession of the whole of the premises’. Westminster owed Ms Boraliu the main housing duty under Housing Act 1996 s193. In February 2005, the council granted her a tenancy of one of the flats which it leased from Pathmeads. The tenancy agreement stated that it was non-secure under Housing Act 1985 Sch 1 para 6 (premises leased to landlord on terms enabling head-lessor to obtain vacant possession). There was no reference to Sch 1 para 4 (tenancy granted under homelessness obligations contained in Housing Act 1996 Part 7) in either the lease or the tenancy agreement. Later, Pathmeads told Westminster that it wanted the premises back and the council served a notice to quit on Ms Boraliu. In the subsequent possession claim, Westminster relied only on Sch 1 para 4 as the basis for the tenancy being non-secure. Ms Boraliu was unrepresented and an outright possession order was made. HHJ Knight QC allowed an appeal (see November 2007 Legal Action 36), holding that a tenancy could not come within both paragraphs 4 and 6, and that this was a case which fell within paragraph 6. Westminster appealed.
The Court of Appeal allowed the appeal by consent. In giving full reasons, Chadwick LJ said that the tenancy fell within paragraph 4. It was a tenancy granted in pursuance of a function under Housing Act 1996 Part 7 and the local housing authority had not notified the tenant that the tenancy was to be regarded as a secure tenancy. The fact that paragraph 6 also applied to circumstances which fell within paragraph 4 was not a sufficient reason for qualifying the plain words of paragraph 4 itself. There was a real purpose in having both paragraphs 4 and 6: the paragraphs were not to be regarded as mutually exclusive.
Business tenancies (Housing Act 1985 Sch 1 para 11, Housing Act 1988 Sch 1 para 4 and Rent Act 1977 s24)
 
Business tenancies
Housing Act 1985 Sch 1 para 11 provides that a tenancy is not a secure tenancy if it is one to which the business tenancy provisions of Landlord and Tenant Act 1954 Part II apply. There are similar provisions in Housing Act 1988 Sch 1 para 4 and Rent Act 1977 s24.
Court of Appeal
 
Andrews v Brewer
(1998) 30 HLR 203, CA
 
House was let as a dwelling; tenancy was an Assured Shorthold Tenancy not a business tenancy
Tenants claimed that a house which was purportedly subject to an assured shorthold tenancy had not been let as a dwelling and so was a business tenancy. They relied on the surrounding circumstances and, in particular, the fact that all the other houses in the street were used as guest houses.
The Court of Appeal rejected this contention, holding that the surrounding circumstances were only relevant if the purpose of the letting was not made clear in the lease. In this case, a user restriction in the lease meant that it was not permissible to infer an intention for business purposes. The Court of Appeal also dismissed a counterclaim for breach of repairing covenants because proper notice had not been given.
Broadway Investments Hackney Ltd v Grant
[2006] EWCA Civ 1709; [2007] HLR 23; [2007] L&TR 11; [2007] 1 P&CR 18
 
Where tenant occupied part of premises for business purposes, the exception applied
In 1995 the claimant’s predecessor in title granted a ten-year lease to the defendant. The property comprised a basement, ground floor and first floor. The lease described the property as ‘shop premises’ and the ‘permitted use’ clause allowed for the use of ‘the lower part of the premises for the sale and catering for fish, and the upper part for residential purposes only’. The lease also obliged the tenant ‘to keep the premises open as a shop for carrying on the permitted use at all times of the year during the usual business hours of the locality, and at all times to maintain in good order an adequate and appropriate display in the shop windows’. The defendant sold fish and groceries in the lower part and lived upstairs. However, arrears accrued and the claimants issued proceedings for forfeiture, almost £25,000 of arrears, mesne profits, interest and costs. The defendant sought relief from forfeiture under County Courts Act 1984 s138. District Judge Manners found that the premises were occupied for the purposes of a business and made an order for possession in 28 days. On appeal, HHJ Cotran found that they were not occupied for business premises, allowed the defendant’s appeal, set aside the absolute possession order and substituted an order suspended on terms that the defendant pay current rent and £1,000 per month towards the arrears.
The claimant appealed successfully to the Court of Appeal. Lloyd LJ, after considering Landlord and Tenant Act 1954 s23, said that the question posed by that section ‘is a factual one. Does the tenant occupy all or part of the premises comprised in the tenancy, and if so does he occupy them, or part of them, for the purposes of a business carried on by him, or for those and other purposes?’ He concluded that on the basis of the facts of this case ‘it seems difficult to see how there could be any doubt as to that. Mr Grant does occupy the premises, and he does so, as regards the ground floor and basement, for the purposes of his shop business carried on in that part of the premises.’ Following Cheryl Investments v Saldanha (Cheryl Investments Ltd v Saldanha), this was a tenancy under which the defendant was not only ‘allowed to use the ground floor and basement for business purposes, and for no other purpose, but he was positively required to do so’, by the lease. He had a business tenancy, not an assured tenancy. The Court of Appeal restored the absolute possession order. Obiter, Lloyd LJ, after pointing out that courts were obliged to consider whether or not the Rent Acts applied in any case, regardless of whether the tenant took the point at all, said:
it seems to me that the court would be justified in taking the same stance as regards premises which may be held on an assured tenancy, still as an exception to the general rule [precluding the raising of points on appeal which had not been taken in the lower court] which continues to apply under the Civil Procedure Rules.
Cheryl Investments Ltd v Saldanha
[1978] 1 WLR 1329; [1979] 1 All ER 5; (1978) 37 P&CR 349; (1978) 248 EG 591, CA
 
Business activity must be a significant purpose of occupation for exception to apply
The Court of Appeal considered two cases. In the first, the tenant was a partner in a business which did not have a separate address. He operated from home, using business equipment, receiving visitors and having business notepaper with that telephone number. A considerable volume of trade was carried on from the address. In the second case, the tenant was a medical practitioner with consulting rooms nearby. However, he occasionally saw patients in the rented premises. His notepaper gave both addresses and telephone numbers.
The Court of Appeal held that in the first case the tenant was occupying for the purposes of a business within the meaning of Landlord and Tenant Act 1954 s23(1) but that in the second case the tenant was occupying as a residence within the meaning of Rent Act 1977 s2. Premises are only occupied ‘for the purposes of a business’ where the business activity on the premises is a significant purpose of the occupation or part of the reason for the occupation. Where, however, the business use is merely incidental to residential occupation, there is Rent Act protection.
Florent v Horez
(1984) 12 HLR 1; (1984) 48 P&CR 166; (1983) 268 EG 807, CA
 
‘Business user’ has a broad meaning
Gurton v Parrott
(1991) 23 HLR 418; [1991] 18 EG 161, CA
 
Premises not occupied for purpose of business where business merely incidental
The court had to decide as a preliminary issue whether premises were occupied for business purposes, and so fell within the protection provided by Landlord and Tenant Act 1954 Part II, or for residential purposes, in which case they were within Rent Act protection. The tenant gave evidence that she had bred dogs and provided kennelling in timber outbuildings adjoining a two-bedroomed house until 1976. From 1976 to 1988 her son, who lived in a caravan on the premises, carried on these activities in his spare time, but there had been no kennelling, breeding or grooming at the premises since 1988. HHJ Paynter Reece, applying the test in Cheryl Investments v Saldanha (Cheryl Investments Ltd v Saldanha) found that the tenant occupied the premises as a residence and the running of the business was merely incidental.
The Court of Appeal held that this was essentially a question of fact for the trial judge. The landlord’s appeal was dismissed.
Lewis v Weldcrest Ltd
[1978] 1 WLR 1107; [1978] 3 All ER 1226; (1978) 37 P&CR 331, CA
 
Taking in of lodgers did not amount to a trade, profession or employment
The tenant took in lodgers who often stayed for long periods. At the time of the hearing she had five lodgers who occupied three rooms. She made little profit from them. The landlords claimed that the tenant had lost Rent Act protection and served notice under Landlord and Tenant Act 1954 s25, purporting to terminate the tenancy.
The Court of Appeal held that she had retained Rent Act protection. On the facts it could not be said that her activity of taking in lodgers amounted to a trade, profession or employment (see Landlord and Tenant Act 1954 s23).
Pulleng v Curran
(1982) 44 P&CR 58, CA
 
Non-use of business part of premises did not bring tenancy within Rent Act 1977
The tenant rented a grocer’s shop with residential accommodation above. The tenant claimed that he had acquired Rent Act protection because he lived in the residential part of the premises and the shop was unoccupied. A county court judge held that a small amount of business use was enough to take the tenancy outside the Rent Act and within the Landlord and Tenant Act 1954 and that the tenant had ceased to use the shop as a matter of convenience.
The Court of Appeal dismissed the tenant’s appeal. Whether or not there is business use is a question of fact. The judge had been entitled to reach the conclusion that he had reached. The mere fact that a tenant leaves business premises fallow does not mean that the tenancy then comes within the Rent Act.
Russell v Booker
(1981-82) 5 HLR 10, 14 May 1982
 
Premises that are not originally let as a separate dwelling but for some specific other purpose are incapable of acquiring the protection of the Rent Act 1977 other than in circumstances where the original agreement has been superseded by a subsequent contract, which may be inferred, providing for a different use of the land
In 1947, Miss Davis granted Mr Russell a tenancy of premises and three acres of land of orchards at Gladstone House, Glastonbury. It was a requirement of the tenancy that Mr Russell reside at the premises and to farm the adjoining land. Subsequently, the orchards were used as pasture land for a cow and a calf and a number of chickens. Mr Russell also ran a bed and breakfast from the premises. In 1980, both Miss Davis and Mr Russell died; Mr Booker obtained the freehold reversion and Mr Russell’s daughter – Miss Russell – remained in occupation of the premises. In 1981, Mr Booker began steps to recover possession of the land. Before a claim was issued, Miss Russell sought a declaration in the county court that she had succeeded to her father’s tenancy and that it was protected under the Rent Act 1977 because the land was no longer occupied as an agricultural holding. Mr Booker contested the application on the basis that, inter alia, the property had originally been let as an agricultural holding with more than two acres of land and as a result was incapable of becoming a protected tenancy under the Rent Act 1977. Miss Russell’s application was dismissed and she appealed to the Court of Appeal.
The Court of Appeal dismissed her appeal. Premises which had not originally been let as a separate dwelling but expressly for some other purpose, eg as an agricultural holding or a shop, are incapable of acquiring protection under the Rent Acts unless the original agreement has been superseded by a subsequent contract providing for a different use of the land or the court is able to infer the creation of a subsequent contract having regard to the change of use and the fact that the landlord has accepted this change of use. In this case, there was insufficient evidence for the court to infer the existence of a subsequent contract in which the premises were let as a separate dwelling.
Tan v Sitkowski
[2007] EWCA Civ 30; [2007] 1 WLR 1628; [2007] L&TR 17; (2007) Times 15 February
 
Premises let for mixed residential and business use not let as a dwelling for purposes of Rent Act 1977; tenancy not brought within Rent Act when business use ceased
In 1970, the Greater London Council granted Mr Sitkowski a tenancy of a building. He used the ground floor for his business and the first floor as a family residence. In 1989, he ceased using the ground floor for his business. He continued to occupy the first floor as his home, and he used the ground floor for storage in connection with his residential use of the first floor. In 1990, the freehold reversion was sold to Phaik Seang Tan and Kit Yeng Tan (the claimants). In 2003 they served notice to quit and brought a possession claim. HHJ Brian Knight QC made an order for possession, finding that, in 1970, Mr Sitkowski’s tenancy enjoyed the protection of the Landlord and Tenant Act 1954 Part II, that from 1989 the Landlord and Tenant Act no longer applied and that a tenant could not, simply by unilaterally ceasing business use, obtain protection under Rent Act 1977. Mr Sitkowski appealed.
After a detailed review of decisions concerning mixed business and residential use and the meaning of the phrase ‘let as a separate dwelling’ in Rent Acts from 1915, the Court of Appeal dismissed the appeal. In Pulleng v Curran (Pulleng v Curran), the Court of Appeal held that premises let for a mixed use purpose were not ‘let as a dwelling’ for the purposes of Rent Act 1977. See too Wagle v Trustees of Henry Smith’s Charity Kensington Estate (Wagle v Trustees of Henry Smith’s Charity Kensington Estate) and Webb v Barnet LBC (Webb v Barnet LBC). Although much of the reasoning in Pulleng, Wagle and Webb ‘was either flawed or incomprehensible’, those decisions had stood for over 15 years and there was a practical and rational justification for them. It would not be appropriate to overrule them simply because some of the reasoning was flawed and because another court might have reached a different decision. Furthermore, it would be anomalous and somewhat unfair to a landlord if a tenancy granted for mixed business and residential use could unilaterally be brought within the Rent Act simply by the tenant ceasing business use. The mere fact that business use of the premises had ceased 14 years before the notice to quit expired, and that the landlords continued to accept rent, could not amount to positive consent to the change of use (Wolfe v Hogan [1949] 2 KB 194). The fact that the landlords received rent in the form of housing benefit direct from the local housing authority did not mean that they were prevented from denying that they had consented to a change of use from mixed business and residential to purely residential since the Housing Benefit (General) Regulations 1987 reg 10(4) made it clear that housing benefit can be paid in respect of rent due under premises used for mixed business and residential purposes.
Tomkins v Basildon DC
[2002] EWCA Civ 876; [2002] 43 EG 206; [2003] L&TR 7
 
Business lease not varied to ‘housing tenancy’ when business ended
In 1966 the claimant went to live with a Mrs Barker. She worked for her as a kennel hand and assisted her domestically. She was not paid wages, but was kept by Mrs Barker. In 1978 Basildon Development Corporation granted Mrs Barker and the claimant a lease of a bungalow and kennels for a term of 20 years. There was a covenant by the tenants ‘to use the demised premises for carrying on the trade or business of the keeping and training of greyhounds and for residential accommodation incidental thereto’. It was, accordingly, a business tenancy within the meaning of Landlord and Tenant Act 1954 Part II. The freehold reversion was transferred to the defendant in 1994. By 1986 commercial activity at the property had ceased and the claimant devoted herself full time to the care of Mrs Barker, who eventually died in 1995. There was evidence from its files that the defendant knew about this and agreed to treat the lease as ‘non-commercial’ and to convert it to a ‘housing tenancy’. In a claim for a declaration, a circuit judge found on the facts that there had been an agreed variation of the lease to treat the property as a house ‘let as a separate dwelling’ within the Housing Act 1985. However, since there was no surrender and re-grant, the tenant continued to hold under the 20-year lease as varied, and therefore did not have the benefit of Landlord and Tenant Act 1985 s11, since that section only applies to leases for seven years or less. The claimant appealed and the defendant cross-appealed.
The claimant’s appeal was dismissed. There was no evidence to suggest that Mrs Barker and the claimant ever intended to give up their rights under the lease. Indeed, solicitors acting for the claimant wrote to the defendant in 1997 asserting that ‘she has a lease of the above property which expires on 14 November 1998’. Furthermore, the defendant continued to operate rent reviews under the provisions of the lease. Hart J, with whom Latham LJ agreed, rejected the submission that the fact that rent was being paid and received via housing benefit meant that there must have been some agreement to convert the lease into a periodic purely residential tenancy (see Social Security Contributions and Benefits Act 1992 ss130(1) and s137(1) and Housing Benefit (General) Regulations 1987 reg 10). The council’s cross-appeal was allowed. The Court of Appeal did not consider that, on an application of conventional principles of the law of contract, the judge’s conclusion that there was a contractual variation of the lease could be justified. Most of the matters considered by him were purely of relevance to the landlord for its internal administration. The highest it could be put was that the landlord for the time being was content not to enforce the user covenant and to review the rent on the basis of the actual as opposed to the permitted or required user. The property did not become ‘let as a separate dwelling’ for the purposes of the Housing Act 1985.
Wagle v Trustees of Henry Smith’s Charity Kensington Estate
[1990] 1 QB 42; [1989] 2 WLR 669; (1989) 21 HLR 177; [1989] 1 EGLR 124; [1989] 11 EG 75, CA
 
Tenant’s unilateral acts could not change security of premises let for mixed use
Where a lease of business premises coming within Landlord and Tenant Act 1954 Part II contained a covenant by the tenant not to ‘use the premises or any part thereof’ for any other purpose than that of a sculptor’s or artist’s residential studio’, the premises could not be converted into a Rent Act regulated tenancy by the unilateral acts of the tenant. The Court of Appeal reaffirmed that ‘mixed premises’ designed for both business and dwelling purposes come within the protection of the 1954 Act, not the Rent Act.
Webb v Barnet LBC
(1989) 21 HLR 228; [1989] 1 EGLR 49; [1989] 11 EG 80, CA
 
Premises let for business and residential use were not ‘let as a separate dwelling’Times 15 February
Premises comprising a house, a yard and a workshop were let to the tenant ‘to use the demised premises only for residential purposes and for the purposes of trade and business for which they are let, namely as a motor body repairs workshop’. The tenant and family lived in the house and carried on a business from the yard and workshop until 1979/80. When his business ended, the tenancy was no longer within Housing Act 1985 Sch 1 para 11, which excludes from protection tenancies to which Landlord and Tenant Act 1954 Part II applies. Accordingly, he sought a declaration that he was a secure tenant.
The Court of Appeal held that Housing Act 1985 s79(1) was not satisfied, because the premises had not originally been ‘let as a separate dwelling’, even though business use had now ceased. Mr Webb was a non-secure tenant without the protection of the Rent Act 1977, Housing Act 1985 or Landlord and Tenant Act 1954.
Wright v Mortimer
(1996) 28 HLR 719; (1996) 72 P&CR D36, CA
 
Where business activities never part of tenant’s reason for occupying premises and incidental to residential occupation, Rent Act applied
A tenant of a maisonette with Rent Act protection became a self-employed art historian, making his living from writing books and articles on seventeenth-century painting, organising exhibitions and advising dealers and private collectors. He had no work address other than the maisonette and all his writing and some preparatory work was carried out at home. There was a registered rent, but subsequently the landlord claimed that the tenant was not occupying as a residence and served a notice under Landlord and Tenant Act 1954 s25 to terminate what he said was a business tenancy outside the protection of the Rent Act. Without prejudice to his contention that there was Rent Act protection, the tenant served a counter notice under Landlord and Tenant Act 1954 s29. The court considered the nature of the tenancy as a preliminary issue. Following Cheryl Investments v Saldanha (Cheryl Investments Ltd v Saldanha), HHJ Diamond QC asked whether the business activity was more than incidental to the residential occupation. He held that there was Rent Act protection. The business activities were never part of the tenant’s reason for, or aim and object in, occupying the premises. The writing occupied only about 30 per cent of the tenant’s professional time and accounted for only a small proportion of his income.
The Court of Appeal dismissed the landlord’s application for leave to appeal. Whether or not business user was a significant element of the occupation was a question of fact and degree which was particularly within the trial judge’s ability to decide. It was permissible for the judge to take into account the tenant’s attachment to the flat and the fact that an informed or reasonable person would have concluded that the tenant was not carrying on a business at the premises.
Holiday lets (Housing Act 1988 Sch 1 para 9 and Rent Act 1977 s9)
 
A tenancy cannot be an assured tenancy if the purpose of the tenancy is to confer on the tenant the right to occupy the premises for a holiday (Housing Act 1988 Sch 1 para 9). Similarly a holiday let cannot be a protected tenancy within the meaning of the Rent Act (Rent Act 1977 s9).
Court of Appeal
 
Buchmann v May
[1978] 2 All ER 993; (1976) 7 HLR 1; (1976) 240 EG 49, CA
 
Courts should be ‘astute to detect a sham’ but for tenant to establish this
Mr May was a New Zealander. Mrs May, his wife, was an Australian. They were living and working in England on a series of temporary residence permits. In 1972 Mr Buchmann let premises to Mrs May for six months. This was followed by a succession of short-term tenancies which did not enjoy Rent Act protection because they were furnished and granted before the Rent Act 1974 came into force. Mr and Mrs May then went abroad. On their return they contacted Mr Buchmann, saying that they would be in the country for a few months before going abroad. They signed a three-month tenancy agreement which stated that the letting was for the purpose of a holiday. Mr and Mrs May, in subsequent possession proceedings, denied that the purpose of the tenancy was for a holiday.
The Court of Appeal held that the labels put on a transaction are not conclusive, but that where a tenancy agreement expressly states the purpose for which it is made, that statement is evidence of that purpose unless the tenant can establish that it does not correspond with the true purpose, either because the express label is a sham or because it is a false label. Although a court will be ‘astute to detect a sham where it appears that a provision has been inserted for the purpose of depriving the tenant of statutory protection under the Rent Acts’ ([1978] 2 All ER 993 at 999), the burden of proof lies on the tenant. In this case there was no evidence which displaced the express purpose and, accordingly, there was no Rent Act protection. The court accepted the dictionary definition of a holiday as ‘a period of cessation of work, or period of recreation’.
Killick v Roberts
[1991] 1 WLR 1146; [1991] 4 All ER 289; (1991) 23 HLR 564; [1991] 2 EGLR 100; [1991] 41 EG 133, CA
 
Rescission available where tenancy entered into as a result of tenant’s fraud
The tenant persuaded the landlord to grant a tenancy of a property, which she usually let as a holiday bungalow during the summer, by saying that he was having a house built and that it would be ready for occupation four months later.
The Court of Appeal held that the remedy of rescission of a tenancy was available to a landlord who had been induced by fraud to enter into a tenancy agreement. The effect of rescission was to restore the parties to the position in which they would have been had the tenancy not been granted, ie, no statutory tenancy came into existence.
High Court
 
R v Rent Officer for Camden LBC ex p Plant
(1980) 7 HLR 15; (1980) 257 EG 713, QBD
 
Holiday let agreement did not reflect reality of situation and tenancy protected
Four student nurses and two other students went to view a flat which was to let. At the landlord’s request they filled out forms giving details of their present addresses, their parents’ addresses, their employers and their banks. The nurses gave their addresses as a nearby nurses’ home. One of the student nurses signed a tenancy agreement which stated that the purpose of the letting was for a holiday. All six then moved in. Six months later, when the tenancy expired, at the landlord’s request one of the other occupants signed a further six-month ‘holiday let’ agreement.
Glidewell J held that there was Rent Act protection, stating that the court should not only consider the written agreement, but was ‘obliged to go on and consider other evidence to see whether [the written agreement] represents the reality of the situation’ ((1983) 7 HLR 15 at 27). He found that there was ‘clear evidence that all the parties knew that [the applicants] were going to occupy it for the purpose of their work as students’ and that that was ‘conclusive of the matter’.
County courts
 
McHale v Daneham
(1979) 249 EG 969, Bloomsbury and Marylebone County Court
 
‘Working holiday’ came within exception to security
HHJ Edwards held that, notwithstanding the dictionary definition of ‘holiday’ accepted in Buchmann v May (Buchmann v May), there was ‘no reason why a working holiday should not fall within the provisions of section 9 of the Rent Act’. (See also Francke v Hakmi [1984] CLY 1906, Bloomsbury and Marylebone County Court.)
Tenancies at a high or low rent (Housing Act 1988 Sch 1 paras 2 and 3 and Rent Act 1977 ss4–5)
 
Tenancies at a high or low rent
A tenancy of a dwelling with a high rateable value could not be an assured tenancy (Housing Act 1988 Sch 1 para 2). The Assured Tenancies (Amendment) (England) Order 2010 SI No 908 and The Assured Tenancies (Amendment of Rental Threshold) (Wales) Order 2011 SI No 1409 provide that a tenancy cannot be an assured tenancy if the annual rent is over £100,000. That new rental threshold applies to tenancies already granted.
A tenancy cannot be an assured tenancy if either no rent is payable or if it is at a low rent (Housing Act 1988 Sch 1 para 3). For tenancies granted after 1 April 1990 this means a rent less than £1,000 per annum in London or less than £250 per annum outside London. There are similar provisions in Rent Act 1977 ss4–5. See too the References to Rating (Housing) Regulations 1990.
Court of Appeal
 
Bankway Properties v Dunsford
[2001] EWCA Civ 528; [2001] 1 WLR 1369; [2001] L&TR 339; [2001] 26 EG 164; [2002] HLR 42; (2001) Times 24 April
 
Rent review clause unenforceable where it was a mere device for landlord to increase rent to level that would avoid statutory scheme for assured tenancy
Bostock v Bryant and Another
(1990) 22 HLR 449; (1990) 61 P&CR 23; [1990] 2 EGLR 101; [1990] 39 EG 64, CA
 
Payment of gas and electricity bills was payment of expenses of house, not rent
The Court of Appeal considered whether or not payment of gas and electricity bills constituted rent. HHJ Barr held that an arrangement whereby the defendants had been given exclusive occupation of a house (with the exception of one room) and paid gas and electricity bills, while the owner paid general and water rates, was a periodic tenancy.
The Court of Appeal, reversing the county court decision, stated that ‘if parties to an agreement describe a payment … as rent, the court will normally accept that it is properly so described’, but that in the present case ‘the more natural inference to be drawn from the payments by the Bryants of the gas and electricity bills was that it was simply a payment of their part of the expenses incurred and a sharing of the expenses of the house’ ((1990) 22 HLR at 452). In those circumstances, the inference should not be drawn that the payments were rent. The court made a possession order, holding that, because no rent was paid, there could be no Rent Act protection since the ‘rent’ was less than two-thirds of the rateable value.
Resident landlords (Housing Act 1988 Sch 1 para 10 and Rent Act 1977 s12)
 
Resident landlords
In general, a tenancy granted by a landlord who was at that time living elsewhere in the building in which the premises are situated, and who has continued at all times to live in the premises since then, cannot be an assured or protected tenancy (Housing Act 1988 Sch 1 para 10 and Rent Act 1977 s12). There are, however, exceptions to this exception.
Court of Appeal
 
Bardrick v Haycock
(1981) 2 HLR 118; (1976) 1 P&CR 420, CA
 
Landlord living in separate extension, not resident
The house in question was built in the early part of the twentieth century. In 1960 it was converted into six self-contained flats. In 1962 a number of lock-up garages were added. In 1968 one of the garages was demolished and a two-storey extension erected in its place. The extension was tied into the house, but there was no internal communication between the extension and the main building. The landlord lived in the extension. Tenants lived in the original house. The landlord claimed possession, relying on Rent Act 1974 s5A (now Rent Act 1977 s12). HHJ Barr held that the premises occupied by the landlord did not form part of the same building as that occupied by the tenants and dismissed claims for possession.
The landlord’s appeals were dismissed. There was evidence on which the judge could reach his conclusion. What is a building is primarily a question of fact with which the Court of Appeal will only interfere if the judge errs in law.
Barnes v Goresuch
(1976) 2 HLR 134; (1982) 43 P&CR 294; (1982) 263 EG 253, CA
 
Works of conversion not of a sufficient degree to render flats ‘purpose-built’
A tenant sought a declaration that her tenancy was protected under the Rent Act 1977. Her landlord claimed that Rent Act 1977 s12 applied. The premises were a flat in a house which had been converted in 1959. A county court judge decided that the building was not a purpose-built block of flats, although in some circumstances a building which was wholly gutted and rebuilt could be considered a new and different building.
The Court of Appeal dismissed the tenant’s appeal. The question was primarily one of fact. There were no grounds for interfering with the judge’s decision that the works of conversion had not sufficiently changed the character of the building to make it a different building.
Cooper v Tait
(1984) 15 HLR 98; (1984) 48 P&CR 460; (1984) 271 EG 105, CA
 
Residence by one joint landlord satisfies resident landlord exception
Three landlords jointly granted a tenancy. At the time of the grant and throughout the length of the tenancy, one of the three landlords lived elsewhere in the building. The other two lived at other addresses. The landlords took possession proceedings, claiming that they were resident landlords within the meaning of Rent Act 1977 s12.
The Court of Appeal held that the residence requirement may be fulfilled by just one out of several joint landlords and upheld the possession order which had been made in the county court.
Griffiths v English
(1981) 2 HLR 134; (1982) 261 EG 257, CA
 
Landlord living in one extension was resident where tenant lived in another extension
The property in question was a neo-Georgian house. Two extensions had been built on to the main house. There was no communication between either extension and the main house. The landlord lived in one extension. The tenant lived in the other extension. A county court judge, after visiting the premises, decided that the whole property comprised one building and that the landlord was a resident landlord within the meaning of Rent Act 1977 s12. He made a possession order.
The Court of Appeal dismissed the tenant’s appeal. Whether or not the premises comprised one building was a question of fact. It could not be said that no reasonable person could come to the conclusion that the premises as a whole constituted one building.
Jackson v Pekic
(1990) 22 HLR 9; [1989] 2 EGLR 104; [1989] 47 EG 141, CA
 
Residence test for landlord exception same as residence test in Rent Act 1977 s2
The Court of Appeal confirmed that, when courts are considering whether a landlord is a resident landlord within the meaning of Rent Act 1977 s12, they should use the same test as when deciding whether a statutory tenant continues to occupy premises as a residence for the purposes of Rent Act 1977 s2. Landlords who are temporarily absent must leave in the premises some personal and visible sign of their intention to return. In Jackson it was held that the landlord had not done this and her claim for possession was dismissed. Furniture was not a sufficiently personal sign and the fact that the landlord allowed the tenant’s brother to use the only room in the house which she retained was more consistent with an intention not to reside.
Lewis-Graham v Conacher
(1992) 24 HLR 132; [1992] 1 EGLR 111; [1992] 02 EG 171, CA
 
Borderline case but judge entitled to find landlord lived in same building as tenant
The landlords claimed to be resident within the meaning of Rent Act 1977 s12. The premises which were let (198a Nether Street) were an extension to the house in which the landlords lived (198 Nether Street) and had a common gas supply, a common electricity supply and a common water supply and were served by the same central heating system as the main house. Originally there had been interconnecting doors, but these had been blocked up. Further building works were carried out, but the county court judge found that, when the notice to quit served by the plaintiffs expired, 198 and 198a were still part of the same building and accordingly the tenants did not enjoy the protection of the Rent Act.
The Court of Appeal held that, although this was a borderline case, it was essentially a question of fact for the county court judge and declined to interfere with his finding.
O’Sullivan v Barnett
[1994] 1 WLR 1667; (1995) 27 HLR 51; [1995] 1 EGLR 93; [1995] 04 EG 141, CA
 
Where intention that resident landlord and tenant move to another building exception still applied despite landlord actually moving into new building after tenant
During the 1960s the tenant began to rent a room in a house where the landlord was already living and, accordingly, had a restricted contract without full security (Rent Act 1977 ss12(1)(b)(i) and 19). The landlord later decided to convert the house into self-contained flats and it was agreed that both the landlord and the tenant would move into another neighbouring house. The tenant was the first to move. For four weeks after the tenant moved, the landlord did some work on the new house but still slept in the original house until works in the new house were completed, when he moved in. In 1992 the landlord served a notice to quit. The tenant defended possession proceedings, claiming that the landlord was not resident at the time when the new tenancy was granted and that, accordingly, she had acquired full Rent Act security. At first instance a possession order was made. The judge stated that he was not required to consider a ‘fine matter of timing’ and that the landlord’s occupation had occurred either before or simultaneously with the creation of the new tenancy and that the tenant knew what was intended. The tenant appealed.
The Court of Appeal, dismissing the appeal, held that in reality it was a concerted move and that it was artificial to split up that co-ordinated transfer from one house to another. The judge was entitled to take into account the landlord’s intention. The landlord’s rights might be seriously frustrated if they were dependent on the very narrow distinctions which the tenant sought to make in this case.
Palmer v McNamara
(1991) 23 HLR 168; [1991] 1 EGLR 121; [1991] 17 EG 88, CA
 
Landlord resided in premises despite not sleeping there (due to medical condition)
The landlord claimed to be a resident landlord within the meaning of Rent Act 1977 s12. He occupied a rear room in the flat and kept belongings there, including a fridge and a kettle. However, he had no cooker and, if he wished to eat there, he bought food that did not need to be cooked or take-away meals. As a result of a medical condition which prevented him from dressing or undressing himself, he did not sleep in the room, but went to stay with a friend each night.
The Court of Appeal held that these facts did not prevent the room from being a dwelling-house or the landlord from occupying it ‘as his residence’. The court noted that all the landlord’s possessions were in the room and found that, as a question of fact and degree, the county court judge was right to take the view that the landlord occupied the room as his home.
Wolff v Waddington
(1990) 22 HLR 72; [1989] 2 EGLR 108; [1989] 47 EG 148, CA
 
Resident landlords under Rent Act 1977 can have two homes
A tenant appealed unsuccessfully against a possession order which had been made on the basis that he was outside the protection of the Rent Act 1977 because there had, at all times, been a resident landlord within the meaning of s12. The tenant claimed that, although part of his flat was above part of his landlady’s accommodation, it was not part of the same building because there were separate entrances. He also claimed that, although his original landlady’s daughter had moved into the building a fortnight before her mother’s death and had lived in the premises for 13 months after the death, she was not resident because her real home was in the USA.
The Court of Appeal held that these were essentially matters of fact for the county court judge and saw no reasons to interfere with them. It followed Langford Property Co v Athanassoglou [1949] 1 KB 29, CA, and accepted that ‘resident’ landlords, like statutory tenants, could have two homes, although occupation merely ‘as a convenience’ or for occasional visits would not have been enough.
Board and attendance
 
A tenancy cannot be a Rent Act protected tenancy if the rent includes ‘payment in respect of board or attendance … [and] the value of the attendance to the tenant forms a substantial part of the whole rent’ (Rent Act 1977 s7). There is, however, no equivalent to section 7 in the Housing Act 1988 and a tenancy may be an assured tenancy even if substantial attendances or board are provided, so long as the occupant has exclusive possession.
Supreme Court (formerly House of Lords)
 
Otter v Norman
[1989] AC 129; [1988] 3 WLR 321; [1988] 2 All ER 897; (1988) 20 HLR 594; [1988] 2 EGLR 128; [1988] 39 EG 79, HL
 
Any amount of board satisfies requirement, provided not de minimus or a contrivancede minimis requirement
The tenant claimed that he was a protected tenant and that a continental breakfast consisting of two bread rolls, butter, jam and marmalade, unlimited tea or coffee with milk and sugar and a glass of milk was not board within the meaning of Rent Act 1977 s7. The breakfast was served in a communal dining room by kitchen staff employed by the landlord.
Lord Bridge approved dicta in Wilkes v Goodwin [1923] 2 KB 86, CA (at 93–94 and 96) that any amount of board suffices, provided it is not de minimis, but stressed the need for the tenant’s rent to include ‘not only the cost of the food and drink provided but also all the housekeeping chores which must be undertaken in shopping for provisions, preparation and service of meals on the premises and cleaning and washing up after meals’ ([1988] 2 All ER at 901). It is clear that the provision of a box of uncooked and unprepared groceries once a week is not sufficient to constitute board, although this might amount to an ‘attendance’. Lord Bridge also pointed out that:
… courts have consistently set their face against artificial and contrived devices whereby landlords have sought to deny to tenants the protection intended to be conferred by the Rent Acts ([1988] 2 All ER at 901).
This general statement may be of assistance to other tenants or ‘licensees’ challenging Rent Act or Housing Act evasion.
Court of Appeal
 
Nelson Developments Ltd v Taboada
(1992) 24 HLR 462; [1992] 2 EGLR 107; [1992] 34 EG 72, CA
 
Daily cleaning and weekly laundry of bed linen an ‘attendance’
Mr Taboada rented a bed-sitting room. The landlords provided cleaning and refuse removal on a daily basis and clean bed linen weekly. In 1989 the rent officer assessed the value of the services at £12.97 when he registered a fair rent of £45 per week. In possession proceedings, the judge found that the provision of linen was an attendance and that the value of the services formed a substantial part of the rent.
The Court of Appeal, following Palser v Grinling [1948] AC 291; [1948] 1 All ER 1, HL, held that ‘attendance’ meant ‘services personal to the tenant’ and that the question of ‘proportionality’ was a question of fact for the judge. It upheld the possession order which had been made.
County courts
 
Rita Dale v Adrahill Ltd
April 1982 Legal Action 39, Shoreditch County Court
 
Provision of breakfast in another house not ‘board’
HHJ Stuckley held that the possibility of food (a breakfast of cereal, eggs, toast and tea or coffee) in another house was not ‘board’ within the meaning of the Rent Act.
Scottish courts
 
Gavin v Lindsay
October 1985 Scolag 153, Glasgow Sheriff Court
 
Where breakfast not served to tenant at house, not ‘board’
The ‘board’ offered by the landlord consisted of two alternative options. The tenant could either have breakfast at a particular café (‘The Cup and Saucer’) or collect the ingredients for breakfast from a shop.
Sheriff Kearney held that the concept of board should consist of two elements, ‘substance’ and ‘service’, both provided at or about the time of use. ‘Substance’ meant food and drink. Service meant the preparation and setting out of that food and drink. The service offered by the landlord was not ‘board’.
Accommodation for Homeless Persons (Housing Act 1985, Sch 1 para 4)
A tenancy granted by a local housing authority in performance of any function exercised under Part 7 of the Housing Act 1996 or Part 2 of the Housing (Wales) Act 2014 is not a secure tenancy unless the local housing authority concerned have notified the tenant that the tenancy is to be regarded as a secure tenancy.
Court of Appeal
Wandsworth LBC v Tompkins
[2015] EWCA Civ 846; [2016] PTSR 102; [2015] HLR 44, 31 July 2015
A tenancy, which was provided under Part 7 of the Housing Act 1996 and mistakenly stated it to be an introductory tenancy, was not construed as a providing a secure tenancy
Mr and Mrs Tompkins and their four children were evicted and applied to Wandsworth LBC for accommodation on grounds of homelessness. The council did not accept that they owed them the full housing duty under Housing Act 1996 s193, but provided temporary bed and breakfast accommodation pursuant to the interim duty (s188). As the council continued its investigations, it wrote offering to accommodate them in another property. The letter stated that the council was ‘now able to provide you with alternative temporary accommodation in accordance with its duties under the Housing Act 1996 (Part 7), as amended’. As a result, Mr and Mrs Tompkins signed a tenancy agreement, headed ‘Grant of Introductory Tenancy’. Later, the council wrote that the introductory tenancy form had been used in error and that they should have been granted a non-secure tenancy pending the completion of the section 184 inquiry. The council served notice of proceedings (Housing Act 1996 s128) within the 12-month trial period commencing with the grant of the tenancy, but did not issue the claim for possession until one day after the expiry of the 12-month period. As a result, the council amended the claim form and the particulars of claim to plead that, by virtue of Housing Act 1996 s124(2) and Housing Act 1985 Sch 1, para 4, the tenancy was incapable at law of taking effect as an introductory tenancy. The council argued that the tenancy was granted in pursuance of its Part 7 homelessness function, and in particular the interim duty under section 188, and so could not have been a secure tenancy unless the notification referred to in paragraph 4 had been given. As the tenancy could not therefore have been a secure tenancy, it could not take effect as an introductory tenancy either and the grant therefore operated to confer on Mr and Mrs Tompkins a non-secure tenancy. The tenants argued that it took effect as an introductory tenancy because the notification required under Sch 1 para 4, was provided by a certificate contained in the tenancy form which stated that the tenancy ‘will become’ a secure tenancy at the end of the trial period. HHJ Lamb QC held that the tenancy was granted pursuant to the council’s homelessness functions and that the certificate did not amount to a notice under Sch 1 para 4, because it did not notify the Tomkins that the tenancy ‘is to be regarded’ as a secure tenancy, but stated that the tenancy ‘will become’ a secure tenancy. He granted a declaration that they held the property under a non-secure tenancy.
The Court of Appeal dismissed Mr and Mrs Tomkins’s appeal. It was clear from Westminster City Council v Boraliu Westminster CC v Boraliu that the paragraphs of Schedule 1 have to be read as mutually exclusive to and not qualified by each other. In this case, the certificate in the tenancy agreement, read as a whole and in the context in which it was signed, could not amount to a notification by the council that the tenancy was to be a secure tenancy. The certificate was simply an acknowledgement of the effect of Housing Act 1996 ss124–129. It was not any form of notification by the council whether for the purposes of paragraph 4 or otherwise. As its title suggested, the purpose of the certificate was to provide a statement by the tenants that they understood the general statutory provisions which governed the grant of an introductory tenancy. It could not be treated as a paragraph 4 notification and did not contain the language that would be necessary for that purpose. Using the wrong form of agreement did not alter the statutory function which was being exercised.
CHAPTER D
Previous Next