Salvation Army Housing Association v Philip Kelleway

An assured tenancy expressed to continue from month to month is a periodic tenancy, even if its initial term is described as one month. Where the tenancy agreement contains a binding provision permitting rent increases, Housing Act 1988 section 13 does not apply. The landlord may instead follow the contractual rent-review provision. A fixed-term assured tenancy may give rise to a statutory tenancy under section 5, but that conclusion depends on the proper construction of the agreement. The Upper Tribunal may correct an error in the FTT’s reasoning on an appeal on a point of law, even where the FTT’s operative decision is correct.

The appellant landlord granted the respondent a tenancy described on its frontsheet as an assured non-shorthold tenancy with starter tenancy provisions. Clause 1.1 described it as an assured shorthold monthly tenancy for an initial term of one month and continuing month to month. The agreement provided that, after the starter period, it would become an assured non-shorthold tenancy. It also contained contractual provisions for rent increases.

The landlord served a notice under section 13 of the Housing Act 1988. The respondent referred the proposed rent to the FTT. The FTT struck out the reference because the notice did not provide for the rent to take effect at the beginning of a new tenancy period, reasoning that the tenancy was a statutory periodic tenancy. The landlord appealed against those reasons, while accepting that the reference had been correctly struck out. The central issues were whether the tenancy was periodic or statutory, and whether sections 13 and 14 applied.

1. Appeal on a point of law. The FTT had misdirected itself in refusing permission to appeal. Under section 11 of the Tribunals, Courts and Enforcement Act 2007, an error in the FTT’s reasoning is a point of law arising from its decision. The application for permission was therefore proper.
2. Construction of the tenancy. Clause 1.1 created a monthly periodic tenancy. A periodic tenancy consists of consecutive terms arising one after another until notice brings it to an end. The reference to continuation from month to month after the first month was inconsistent with a fixed one-month term and resolved any possible ambiguity. The starter tenancy provisions reinforced that construction.
3. Effect on rent determination. The tenancy was an assured periodic tenancy containing a provision for rent increases. Section 13(1)(b) therefore excluded it from the statutory rent-notice procedure. The FTT had no jurisdiction to determine the rent under section 14, but its conclusion followed from the contractual rent provision rather than from the tenancy being statutory.
4. The FTT’s decision to strike out the reference stood. Its reasons were set aside. The tenancy was an assured periodic tenancy, and the landlord was free to follow the contractual provisions for increasing the rent.

• Upper Tribunal (Lands Chamber): the FTT’s operative decision to strike out the rent reference was upheld, but its reasons were set aside. The tenancy was held to be an assured periodic tenancy, and sections 13 and 14 of the Housing Act 1988 did not apply.
• First-tier Tribunal (Property Chamber): struck out the reference after deciding that the tenancy was statutory and that the section 13 notice was defective.