Tomkins v Basildon District Council

Where a tenancy was originally granted for mixed business and residential purposes, cessation of the business does not by itself make the premises let as a separate dwelling. That result requires a subsequent contract, express or inferred from the parties’ conduct, which changes the contractual basis of the letting. Internal landlord records, rent reviews based on actual use, acceptance of housing benefit and non-charging of VAT may be insufficient where they do not show an intention to surrender the existing term or vary the permitted use. A variation of user does not imply a surrender and regrant, or a new periodic tenancy, unless the parties agreed those matters. The tenancy’s original contractual term remains relevant to the application of repairing obligations.

The appellant occupied a property under a 20-year lease granted to her and Mrs Barker for greyhound training and residential accommodation. Commercial activity ceased in about 1986, while the landlord’s successor treated the premises administratively as residential and accepted housing benefit.

HHJ Yelton held that the user clause had been varied by agreement by 1990, so that the premises were let as a separate dwelling and protected by the Housing Act 1985. He held, however, that the original 20-year lease continued and therefore the repairing obligations in section 11 of the Landlord and Tenant Act 1985 did not apply. The appellant appealed on the latter issue. The respondent cross-appealed the finding that the premises had become let as a separate dwelling. The central issues were whether the evidence established a contractual variation and, if so, what effect it had on the statutory protections.

1. Appeal dismissed; cross-appeal allowed. The judge’s conclusion that the original lease had been varied so as to become a residential tenancy was unsupported. The appellant therefore did not establish that the property was thereafter let as a separate dwelling for the purposes of section 79(1) of the Housing Act 1985.
2. Under the principles accepted from Russell v Booker, a change from business to residential use may affect whether premises are let as a separate dwelling where the original tenancy has been superseded by a subsequent contract for different use. A fully known and accepted change of use may permit the court to infer such a contract. Mere unilateral change of use is insufficient.
3. The evidence did not establish any contractual variation. Internal memoranda concerning rent reviews, descriptions of the premises and administrative treatment were matters of internal administration or were neutral. A communication made by the respondent as rating authority did not alter the tenancy. Non-charging of VAT and acceptance of housing benefit did not show an agreement to surrender the lease or create a new residential periodic tenancy.
4. The parties continued to treat the 20-year lease as operative, including through rent reviews. The appellant remained entitled under the lease to recommence the commercial use. Nothing showed an intention by either party to give up the existing term or rights.
5. The appellant’s argument that a fundamental change necessarily involved surrender and regrant failed. Even assuming surrender and regrant, there was no basis for inferring that any new tenancy was for less than seven years. The original term therefore could not support the claimed application of section 11 of the Landlord and Tenant Act 1985.
6. Lord Justice Latham agreed with Mr Justice Hart. Consequential orders were made in accordance with the agreed draft minute.

• Court of Appeal (Civil Division): Allowed the respondent’s cross-appeal and dismissed the appellant’s appeal from the order of HHJ Yelton in Southend County Court dated 9 July 2001.