London District Properties Management Ltd & Ors v Goolamy & Anor

A rent review clause in an assured tenancy does not displace the statutory rent-increase scheme once the tenancy becomes a statutory periodic tenancy. Under section 5(3)(e) of the Housing Act 1988, the pre-existing terms continue subject to the later provisions of Part I, including section 13. Section 13(1)(a), rather than section 13(1)(b), applies to a statutory periodic tenancy. Accordingly, absent agreement, the landlord must serve a notice under section 13(2), and the tenant may refer the proposed rent to the Rent Assessment Committee.

The tenants occupied a flat under a three-year assured tenancy containing a clause providing for a five per cent annual rent increase, including during any subsequent statutory periodic tenancy. After the fixed term expired, a statutory periodic tenancy arose. The landlord served notice under section 13(2) of the Housing Act 1988 proposing a substantially increased rent. The London Rent Assessment Panel concluded that it had no jurisdiction because the contractual rent review clause governed the tenancy.

The landlord appealed under section 11(1) of the Tribunals and Inquiries Act 1992. The issue was whether the contractual clause prevented use of the statutory rent-increase mechanism.

1. The appeal was allowed and the case was remitted to the Panel to determine the rent.
2. Under section 5(2) and (3) of the Housing Act 1988, expiry of the fixed-term assured tenancy created a statutory periodic tenancy. Its terms were the same as those of the fixed-term tenancy, subject to the later provisions of Part I.
3. Section 13 draws a deliberate distinction between statutory periodic tenancies under section 13(1)(a) and other contractual assured periodic tenancies under section 13(1)(b). The exclusion in section 13(1)(b), concerning a binding contractual rent-increase provision, applies only to the latter category.
4. The words subjecting the preserved terms to the following provisions of Part I include section 13. They therefore render ineffective, during the statutory periodic tenancy, a rent review clause in the former assured tenancy which purports to regulate later rent increases. The statutory scheme takes its place.
5. Absent agreement under section 13(5), the landlord must use the notice procedure in section 13(2). The tenant may then apply for an assessment under section 13(4), with the determination governed by section 14.
6. The Panel erred in treating section 13(1)(b) as applicable after finding that the tenancy was statutory. Section 13(1)(a) governed the application.

• High Court (Administrative Court): On an appeal under section 11(1) of the Tribunals and Inquiries Act 1992, the court allowed the appeal against the London Rent Assessment Panel's decision of 19 December 2008 and remitted the case for determination of the rent.