LANDLORD AND TENANT — Rent restriction — Assured tenancy — Tenancy agreement containing clause providing for review of rent — Landlord sending letter to tenant initiating rent review procedure — Whether letter required to comply with statutory notice requirements — Housing Act 1988, s 13(1)(b)

Contour Homes Ltd v Rowen

CA: Pill, Arden and Lawrence Collins LJJ: 26 June 2007

Where an assured tenancy agreement contained a clause providing the machinery for the increase of the rent the landlord was not required to comply with the rent review procedure set out by s 13 of the Housing Act 1988.

The Court of Appeal so held when allowing the appeal of the landlord, Contour Homes Ltd, against the decision of Irwin J of 4 October 2006, dismissing the landlord’s appeal against the finding of the Northern Rent Assessment Panel that the landlord’s letter of 27 February 2006 to the tenant, Gary Rowen, initiating a review of the rent payable under the tenant’s assured tenancy was invalid as it did not comply with the requirements of s 13(2) of the Housing Act 1988.

ARDEN LJ said that the judge had held that the landlord’s letter should have been in the form prescribed by s 13(2) of the 1988 Act. The landlord submitted that s 13 did not apply, since the tenancy agreement contained its own rent review clause, and so was excluded by s 13(1)(b) as an assured periodic tenancy “in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period”. On their face, those words were apt to exclude: (1) a term providing for a specified increase in rent; (2) a term providing the machinery for the increase of rent. In her Ladyship’s judgment both were included within s 13(1)(b) because of the words “will or may be”. There was nothing in s 13(1)(b) limiting it to clauses which provided for an increase of a fixed amount as opposed to clauses providing for an increase of unspecified amounts to be arrived at in a specified way. The judge had therefore been wrong to limit s 13(1)(b) to fixed amount rent review clauses.

LAWRENCE COLLINS and PILL LJJ delivered concurring judgments.

Appearances: Jonathan Seitler QC (Trowers & Hamlins, Manchester) for the landlord; the tenant did not appear and was not represented.

Reported by: Brendan Wright, barrister