Martyna Switaj v Adrian McClenaghan

The Tenant Fees Act 2019 is not retrospective. A payment required and made before commencement does not become a prohibited payment for a later tenancy merely because the landlord retains the money. For the landlord prohibition, a requirement involves an overt act or utterance with compulsory quality; silence and passive retention are insufficient. Where a payment is not required by a tenancy term, it must still be made in exchange for the grant, renewal or other relevant transaction. The payment must also result from the requirement. A later tenancy must therefore be assessed on its own terms. An analogy with a deposit case does not assist where the later tenancy contains no equivalent obligation.

Ms Switaj became tenant under an assured shorthold tenancy granted in 2018. The tenancy required an administration fee and a check-out fee, both paid before the Tenant Fees Act 2019 came into force. Later tenancy agreements, including the current tenancy granted in 2021, contained no equivalent fee provisions.

In 2023 Mr McClenaghan served a section 21 notice. The County Court rejected the tenant’s defence and made a possession order. On appeal, Ms Switaj argued that the earlier check-out payment had been retained or notionally carried into the current tenancy and therefore prevented service of the notice. The central issue was whether a pre-commencement payment became relevant to the later tenancy under the Act.

Appeal dismissed. Lewison LJ gave the leading judgment, with which Andrews LJ and Zacaroli LJ agreed.

1. Meaning of requirement. Under section 1 of the Tenant Fees Act 2019, the word require imports an overt act or utterance and a compulsory quality. Mere silence or passive retention of money is insufficient. Under section 1(6)(a), where the requirement is outside a tenancy term, it must be made in consideration of the grant or other relevant transaction. In this contractual context, consideration means a payment made in exchange for the grant. The check-out fee was paid for the original tenancy, not the current tenancy.
2. Payment caused by the requirement. Section 17 is sequential. First, the landlord must make a requirement which breaches section 1(1). Secondly, the prohibited payment must be made as a result of that requirement. A notional payment based on the landlord’s continued retention of funds was not responsive to, or caused by, any current requirement.
3. Superstrike distinguished. The reasoning in Superstrike Ltd v Rodrigues concerned a later statutory periodic tenancy which itself contained an equivalent obligation to provide a deposit. The current tenancy contained no obligation to pay a check-out fee and no obligation to conduct a check-out. The analogy therefore did not assist the tenant.
4. Inferences and appellate review. The court applied the guidance in Efobi v Royal Mail Group Ltd: inferences are matters of ordinary rationality and context, rather than rigid legal rules. The District Judge had not been asked to draw the elaborate inferences advanced on appeal and was not wrong to refrain from drawing them. Any possible claim to repayment of the earlier fee did not convert its retention into an unlawful payment.
5. Transitional effect. The Tenant Fees Act 2019 was not retrospective. The earlier requirement and payment occurred before commencement and were not caught by section 1 or section 30. The possession order therefore stood.

• Court of Appeal (Civil Division): dismissed the appeal and upheld the possession order.
• Clerkenwell and Shoreditch County Court: District Judge Redpath-Stevens rejected the defence based on the earlier payments and made an order for possession.