The tribunal had no jurisdiction to determine the rent of a contractual assured tenancy that contained a provision for increasing the rent
In 1990, Dudley Borough Council granted Mr Chouhan a weekly tenancy of part of a house (formerly used as the headmaster’s house) in the grounds of The Earls High School, Halesowen. Although local authorities cannot grant assured tenancies (Housing Act 1988 Sch 1 para 12), the agreement signed by Mr Chouhan described the tenancy as an assured tenancy. It took effect as a secure tenancy (Housing Act 1985 s80). The rent was £395 per month. The agreement stated that the landlord could increase or decrease the rent by serving notice on the tenant, but that ‘the amount of any increase in rent shall not be such as will increase the rent above the level of rent which a RAC would determine for the premises if the RAC had jurisdiction to determine the rent in accordance with the Housing Act 1988 s14’.
In November 2011, the freehold interest in the school house was transferred to the Official Custodian of Charities and, in January 2012, the custodian granted a head lease of premises including the school house to the Earls High School, for a term of 125 years. In July 2015, agents acting for the school served a notice proposing a new rent of £520 per month. It referred to Housing Act 1988 s13(2). The guidance notes on the form notified Mr Chouhan that if he did not accept the new proposed rent he was entitled to refer the notice to the First-tier Tribunal (FTT). Mr Chouhan did so, but the FTT concluded that the tenancy was not an assured tenancy to which section 13 applied because it contained a contractual provision for varying the rent (s13(1)(b)) and accordingly it had no jurisdiction to consider the proposed rent increase. Mr Chouhan appealed.
After referring to Helena Partnerships Ltd v Brown [2015] UKUT 0324 (LC) and Contour Homes Limited v Rowen [2007] EWCA Civ 842, Martin Rodger QC, Deputy President, dismissed the appeal. When the interest of the landlord was transferred to the Custodian of Charities and subsequently became vested in the school, the tenancy agreement ceased to be a secure tenancy and became an assured tenancy. Section 13(1)(b) excluded from the ambit of the statutory rent determination procedure any assured tenancy which contained a contractual rent review mechanism binding for the time being on the tenant. Martin Rodger QC stated, ‘It is not possible for parties, by agreement, to confer jurisdiction on a court or statutory tribunal which Parliament has said is not to have jurisdiction in the circumstances of their case’ [22]. The purpose of referring to section 14 in the clause relating to rent increases was that ‘it should be used as a contractual yardstick to regulate the level of rent increases and to prevent the landlord from requiring an increase above the level of the rent which would be determined by a rent assessment committee (or now by the FTT) “if” that body had jurisdiction’ [25]. The only way in which the tenant could challenge the new rent was in proceedings before the county court as an application for a declaration that the rent specified in the notice exceeded the rent which a rent assessment committee would determine for the premises if it had jurisdiction under section 14, or by declining to pay the increased rent and defending any subsequent possession claim.
Cf with Helena Partnerships Ltd v Brown [2015] UKUT 0324 (LC), in which Upper Tribunal held that an agreement which recorded the right of the landlord to serve a notice under section 13 to increase the rent did not take effect as a contractual provision for determining the rent as its intention was merely to inform the tenant of his statutory rights.