[2024] UKUT 415 (LC)

Sections 13 and 14 of the Housing Act 1988 provide a statutory scheme for landlords to obtain increases in the rent payable under assured periodic tenancies. Section 13 provides for the landlord to serve a notice proposing a change in rent and for the tenant to refer the proposal to the FTT for determination if she does not agree to the proposal. If an increase is referred to the FTT, it must then determine the new rent in accordance with valuation principles provided in section 14.

The right to refer a rent increase to the FTT does not apply to all such assured tenancies. Section 13(1), 1988 Act identifies the tenancies to which sections 13 and 14 apply, as follows:

“13.

Increases of rent under assured periodic tenancies.

(1)

This section applies to –

(a)

a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part 1 of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and

(b)

any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period.”

The right to refer a notice of increase to the FTT is available only where the assured tenancy is a periodic tenancy. The statutory periodic tenancy referred to in section 13(1)(a) is one which arises under section 5, 1988 Act on the termination of an assured tenancy which is a fixed term tenancy (section 5(7)). Section 13(1)(b) covers other periodic tenancies which are assured tenancies except a tenancy “in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period”.

In Contour Homes Ltd v Rowen [2007] 1 WLR 2982], Arden LJ explained the effect of section 13(1)(b), as follows:

“ … that section excludes a tenancy where provision is made for an increase in rent, and this exclusion applies not simply as the judge thought to cases where the amount of the increase in the rent is set by the tenancy agreement, but also in cases where the tenancy agreement merely provides machinery for increasing the rent.”

This Tribunal has followed Contour in at least two previous appeals, finding in each that a clause in a weekly or monthly assured periodic tenancy which gave the landlord the right to increase the rent to a figure of its own choice was within the exception in section 13(1)(b), so that the FTT did not have jurisdiction to determine a new rent (Chouan v The Earls High School [2016] UKUT 405 (LC) and Salvation Army Housing Association v Kelleway [2024] UKUT 53 (LC)).

In Helena Partnerships Ltd v Brown [2015] UKUT 324 (LC) the Tribunal reached a different conclusion and construed the relevant provision in the tenancy agreement as merely providing information to the tenant about the landlord’s right to implement a statutory review, rather than having any contractual force in its own right. But despite the different result in Helena, the Tribunal did not cast any doubt on the principle that the inclusion of a contractual rent review clause in an assured periodic tenancy excludes the jurisdiction of the FTT to make a determination under section 14.

In Contour the first instance judge had held that because the landlord had invoked the statutory procedure and provided the tenant with information about referring the increase to the appropriate tribunal, it could not later deny that the tribunal had jurisdiction to determine the new rent. The Court of Appeal rejected that approach. Since Parliament had legislated that sections 13 and 14 did not apply to assured periodic tenancies which contained contractual rent review clauses, and since Contour’s tenancy included such a clause, “it was not possible for the parties to agree to confer jurisdiction on the Northern Rent Assessment Panel and likewise Contour could not, in my judgment, by analogy be estopped from denying that it did not have jurisdiction” (per Arden LJ, at [26]).