North Lincolnshire Homes Ltd v Bentley [2015] UKUT 451 (LC)

IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE FIRST TIER TRIBUNAL (PROPERTY CHAMBER) RESIDENTIAL PROPERTY
UT Neutral citation number: [2015] UKUT 0451 (LC)
Between
North Lincolnshire Homes LtdBentley
MRS AMY MURTINGA BENTLEY
[1]On 22 nd December 2014 the Deputy President granted permission to appeal from a decision of the First-tier Tribunal (Property Chamber) (Residential Property) (“the F-t T”) under section 11 of the Tribunal, Courts and Enforcement Act 2007 (“the Decision of the Deputy President”). The Deputy President granted permission on grounds 1 and 3 set out in the Appellant’s application dated 25 th November 2014, but refused permission on grounds 2, 4 and 5. He made various observations when granting permission, to which I shall refer again below.[2]The basis of the application is that the Appellant seeks to appeal the F-t T’s determination of the fair rent of £86 per week payable in respect of property known as and situate at 16 Pelham View, Hibaldstow, Brigg, North Lincolnshire (“the Property”). The Background[3]On 10 th June 1996 the Property was let by the Appellant to the Respondent by way of a secure tenancy agreement. In February 2007 the housing stock, part of which included the Property, was the subject of a large-scale voluntary transfer from the previous landlord to the Appellant. Following this under the terms of a deed dated 26 th February 2007, and a notice of assignment given to the tenant on 28 th February 2007, the tenancy became an assured short tenancy by default arising out of the transfer of the housing stock on 27 th February 2007.[4]Following changes to the Housing Benefit Rules in April 2013 it is said that the Respondent has been under-occupying the Property. As a result there has been a reduction in the amount of Housing Benefit received by her towards her rental liability. This has meant that the tenant has had to meet the shortfall in rent herself, which she has failed to do. The Appellant therefore had to issue legal proceedings against her for arrears of rent. In paragraphs 33 to 45 of its reasons for decision dated 30 th September 2014 (“the Reasons”) the F-t T set out the basis of its determination as to the market rent which it considered the Property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy under the Housing Act 1988 (“the 1988 Act”). In reaching its conclusions it took various matters into account, including that the market rent of the Property would be based on its condition at the time of the inspection which was made on 2 nd July 2014 (see paragraph 39 of the Reasons). The Tribunal then went on to consider the effect of section 16 of the 1988 Act as to the term to be implied in every assured tenancy that the tenant shall afford to the landlord access to the dwelling-house let on the tenancy, and to provide all reasonable facilities for executing any repairs which the landlord is entitled to execute (see paragraph 40). The Tribunal then made the following statement: “Even though the tenant failed to allow access, the Tribunal made a reduction for the outstanding repairs as the landlord has failed to exercise his statutory rights to obtain access and to undertake the necessary works.” (See paragraph 41).[5]The Tribunal then concluded that the open market rental value for a modernised property of this nature in the present market conditions was £120 per week. However, it decided that the Property was not in a good enough condition to achieve that rental value and a number of deductions were therefore made from that sum totalling £34 per week. This resulted in the Tribunal pronouncing that the rent at which the Property might reasonably be expected to be let was £86.00 per week - to take effect from 7 April 2014.[6]The Appellant then sought permission to appeal the F-t T’s decision (“the Application”). On 12 th November 2014 the Tribunal came to the conclusion on the Application that it had not erred in law in making the deductions, to which I have made reference above (“the Appeal Decision”). In particular the Tribunal rejected the submission made by the Appellant that it should not have made the deduction for disrepair because the tenant is required by the terms of the tenancy to afford the landlord access to execute necessary repairs. The Tribunal then in the Appeal Decision repeated its conclusions set out in the Reasons, and went on to state:
“…. The Tribunal took the state and condition of the Property as it was found at the time of the inspection and decided that it was required to come to a decision based on this evidence. As further stated in its Decision the Tribunal decided that had the landlord exercised its right to carry out repairs, the Property could have been valued with the benefit of those repairs.”
[7]In the Decision of the Deputy President in granting limited permission to appeal, the following observations were made on grounds 1 and 3 of the Application:
“If, as the [Appellant] submitted to the F-t T, it had been refused access to carry out repairs, it is arguable that the repairs should be assumed to have been carried out. It is therefore arguable that the F-tT erred in law in taking the actual state of repair of the premises into account and as treating it as justifying a reduced rent.”
Discussion[8]It is submitted by the Appellant that the F-t T wrongly interpreted the relevant law in that there is no statutory right enabling the Appellant to enter the tenant’s property and to undertake repairs. Instead, it is an implied term of the tenancy that the tenant shall afford the landlord access to the dwelling house for executing therein any repairs which the landlord is entitled to execute, pursuant to section 16 of the 1988 Act. In its revised grounds of appeal, as ordered in paragraph 5 of the Decision of the Deputy President, the Appellant sets out in ground 3 the reasons why it is submitted that the F-t T made inappropriate deductions when reaching the conclusion as to the rent payable by the Respondent. The basis of the submissions is as follows:(1) The F-t T erred in law and/or took into account an irrelevant consideration, or failed to take account of a relevant consideration, when reducing rental value on the basis of repairs in the circumstances when the tenant has refused access to the Appellant in order to carry them out. This factual circumstance appears at paragraph 32(c) of the F-t T’s Decision.(2) It is further submitted that it is incorrect as a matter of law that there should be a deduction in the rent when the tenant has failed to mitigate her own loss, by allowing the Appellant to enter and carry out repairs. It is submitted that it would seem wrong that a tenant should benefit in terms of reduction in rent when he/she has failed to comply with the express term of the tenancy.(3) Reference is also made by the Appellant to section 14(2)(c) of the 1988 Act which provides as follows:- “In making a determination under this section there shall be disregarded – (a) …. (b) …. (c) Any reduction in the value of the dwelling house attributable to a failure by the tenant to comply with any terms of the tenancy.” It is said that the failure to allow access to carry out repairs is a failure to comply with a term of the tenancy. The Decision[9]It is common ground that the Appellant as landlord was not welcome, or wanted, at the Property, and that the tenant has persistently refused the landlord access to the Property in order to carry out repairs, and to perform other major works. In my judgment, therefore, the F-tT erred in law in deducting sums from market rent of £120 per week as determined, in the circumstances when the Appellant had been refused access in order to carry out repairs and other major works. In my judgment the condition of the Property is directly referable to the Respondent’s failure to allow access. I appreciate that it is submitted that the Appellant have not exercised their implied rights to enter in order to affect repairs, but the Respondent herself was in breach of the provisions of the 1988 Act (section 14(2)(c)) in failing to allow access or such repairs to be carried out.[10]In such circumstances, on this review I find that the F-t T erred in law in reaching the conclusion it did on this point. The matter should be remitted to the Tribunal for reconsideration of their decision as to the market rent to be determined in respect of this Property. In this regard it should be borne in mind that in the Landlord’s Notice dated 21 st February 2014 the proposed new rent under the tenancy in question was £99.39 per week to replace the existing rent of £93.75 per week. Dated: 13 August 2015 Judge Edward Cousins

Cited in 3 later judgments