Christian Wallis v Hutchby & Collumbell Limited

On an appeal on a point of law, a tribunal determining a rent under the Housing Act 1988 must make a clear finding about the contractual terms governing the rent. It is insufficient to consider what the parties may have intended without deciding what they actually agreed. Evidence that rent has remained unchanged may support, but does not itself establish, the terms agreed when the tenancy began. A determination under section 14 may be ineffective if the parties agreed that the rent would remain fixed, but the effect of such an agreement under section 14(7) is a separate question. Where the tribunal has completed the valuation required by section 14, that determination may remain in place while the contractual issue is resolved elsewhere.

The appellant referred to the First-tier Tribunal (Property Chamber) a notice under section 13(2) of the Housing Act 1988, concerning an assured periodic tenancy. The FTT increased the weekly rent from £100 to £156 with effect from 25 November 2024. The appellant argued that an oral agreement made when the tenancy began in 1999 fixed the rent for the duration of the tenancy.

The FTT rejected that argument, relying on the absence of corroborating evidence and the commercial improbability of a permanently fixed concessionary rent. The appeal concerned whether the FTT had made an error of law by failing to determine what the parties had agreed and whether the rent determination was consequently payable.

1. The appeal was allowed in part. The FTT erred in law by failing to make a finding about the terms agreed orally in 1999. Its statement that there was no evidence supporting a fixed rent overlooked the appellant’s own evidence and the rent books, which were consistent with his account.

2. The FTT’s references to what was in the parties’ minds and to the commercial sense of a permanently fixed rent did not resolve the contractual question. The relevant issue was what the parties had expressed in their agreement. Commercial improbability could bear on whether the alleged agreement was made, but it could not replace a finding on that issue. If the FTT disbelieved the appellant, it needed to say so and explain why.

3. The question was not naturally a valuation issue under sections 13 and 14. The FTT had properly determined the open-market rent under section 14(1), and that valuation was not challenged. The unresolved issue was whether the tenancy terms permitted an increase at all.

4. Section 13 appeared to apply even where an assured periodic tenancy included a term that the rent would not increase. However, section 14(7) provided that the rent determined by the FTT would become payable unless the landlord and tenant otherwise agreed. It remained open whether an agreement made before the determination, including an agreement made when the tenancy began, could qualify as such an agreement.

5. The FTT’s decision was set aside insofar as it decided that the rent could be varied. Its determination of £156 per week under section 14(1) remained in place, subject to the contractual issue. The Upper Tribunal declined to remit that issue to the FTT. If the parties could not agree, the question whether the new rent became payable was to be determined by a court in appropriate proceedings.

• Upper Tribunal (Lands Chamber): allowed the appeal in part and set aside the FTT’s decision that the rent could be varied, while leaving its valuation determination in place.
• First-tier Tribunal (Property Chamber): on 23 January 2025, determined the rent at £156 per week with effect from 25 November 2024 and rejected the argument that the rent was contractually fixed.