Landlord Tenant Case

Court of Appeal

Published May 26, 2010 in the Times Law Reports

Hughes v Borodex Ltd

Before Sir Andrew Morritt, Chancellor, Lady Justice Arden and Lord Justice Patten

Judgment April 27, 2010

A landlord was entitled to serve notice to quit on a tenant who lost her protected tenancy by carrying out improvements in the property which resulted in its rent exceeding the assured protected tenancy limit.

The Court of Appeal so held when dismissing the appeal of the tenant, Cherry Sheila Hughes, from the dismissal by Mr Justice Collins 2009 EWHC 565 Admin of her appeal from the decision of a rent assessment committee on May 7, 2008, that it was not entitled to disregard improvements made by her when assessing the rent payable to the defendant landlord, Borodex Ltd, under the new assured periodic tenancy created by the Housing Act 1988, which was to replace her long residential tenancy which had expired.

Those acting:

Mr Martin Rodger, QC and Ms Victoria Williams for the tenant and Mr Philip Rainey, QC and Mr Christopher Heather for the landlord.

LADY JUSTICE ARDEN said that provisions for rent reviews and fixing the rent often provided for a tenant’s improvements to be disregarded in the interests of fairness to the tenant. But there was no uniform rule on that.

However, if improvements were to be disregarded under the new form of tenancy that the tenant now had, that result had to be achieved on the interpretation of Schedule 10 to the Local Government and Communities Act 1989.

Her Ladyship said the effect of paragraphs 9 and 11 of Schedule 10 to the 1989 Act in their form and context in relation to rent was clear. Their function was limited to that of enabling the rent to be fixed at the outset.

Once the initial terms, including rent, were fixed, those paragraphs were spent and it was open to the landlord to serve a notice to quit and start the procedure for fixing a new rent under the provisions of section 13 of the 1988 Act.

Schedule 10 to the 1989 Act merely applied in the period immediately after the creation of the new assured tenancies and not throughout their duration.

It was not for the court to assume that Parliament necessarily intended to produce the opposite result with regard to improvements.

It was of course open to Parliament to ameliorate the position, to some extent, by raising the limit, not raised since 1989, for the purpose of the qualifying conditions for assured tenancies.

Lord Justice Patten and the Chancellor agreed.

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