[2025] UKUT 258 (LC)

Mr Constantine’s tenancy was granted in March 2017 for a term of 12 months. The agreement stated that the rent was £1,256.25, “payable monthly”; the agreement recorded that “on this occasion” the parties had agreed that it should paid as a single sum in advance; therefore “the total rent payable in this instance is £15,075.00”.

It contains the following clause 3.23:

“Tenant option to renew for further 12 months at the same rent, provided no breaches of the terms of the lease and notice of exercise option to be given no later than 3 months before the end of the term.”

Mr Constantine says that the effect of that clause is to make his tenancy perpetually renewable, so that he can renew it every year at the same rent. He is, he says, in the words of section 5(4) of the 1988 Act, “entitled, by virtue of the grant of another tenancy, to possession of the same dwelling-house”, so that no statutory tenancy arises and he remains liable only for the annual rent of £15,075.

His landlord, Mr Bird, says that the clause gives him the right to renew the tenancy only once. After that a statutory periodic tenancy arises, he can serve a notice under section 13 of the 1988 Act and the First-tier Tribunal has jurisdiction under section 14 to determine a market rent for the property.

The dispute about the effect of the term is a long-running one. On 21 March 2024 Mr Bird served a notice under section 13 of the 1988 Act proposed a new rent of £1,450 per month, and Mr Constantine responded by referring the matter to the FTT under section 13(4). His argument in the FTT against the new rent was that no statutory tenancy had come into eing because the tenancy was perpetually renewable; he remained in possession pursuant to the annual renewal provided for in the tenancy agreement at clause 3.23. Mr Constantine says in his grounds of appeal that he has given notice every year in accordance with the provisions of that clause, and it does not seem to be in dispute that he has done so.

The FTT recorded the parties’ arguments, reminded itself that the construction of the agreement must follow the guidelines set out in Arnold v Britton [2015] UKSC 36, and said:

“9.

On the balance of the evidence before it, the Tribunal is of the opinion the option granted by clause 3.23 of the 2017 tenancy agreement was a right to renew the tenancy only for one further year period of 12 months from 29 March 2028 to 28 March 2019 with no further option to renew after that. The contention that there has been an informal agreement to vary the agreement based to the email exchanges is subjective evidence that is insufficient to rebut the primary document, the agreement.”

Accordingly the FTT found that a statutory periodic tenancy had arisen, and proceeded to determine the market rent. This Tribunal granted Mr Constantine permission to appeal that decision on the basis that it might well be correct but was not properly explained.

Accordingly I have to determine whether the FTT was right to conclude that the tenancy was not perpetually renewable.