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A tale of two homes: not all “sitting tenants” are what they seem

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A tale of two homes: not all “sitting tenants” are what they seem

' a person may occupy two homes as his residence and be a sitting tenant of either property'

Bernard D’Monte

Legal Executive

Background

Residential tenants with security of tenure under the Rent Acts (sometimes known as sitting tenants) can stay in their homes for life as long as they genuinely live there and pay a low “fair” rent.

Landlords are sometimes reluctant to take steps to remove these tenants even if they have good grounds to do so.

Bircham Dyson Bell (BDB) recently acted for a landlord of a “sitting tenant“ in a successful claim for possession.

The case concerned a mews house known as 2 Cheyne Mews in Chelsea where BDB acted for the landlord, Mr L, in his claim for possession. Mr L is the freehold owner of the mews house. The tenant in this case, Mr C, was fortunate to benefit from what he claimed was a Rent Act tenancy dating from the 1960s and managed to keep the mews house as a very affordable pied a terre for nearly 50 years.

The two homes man

In addition to the mews house Mr C and his wife owned a 5 bedroom property in Surrey.

There is recognition in the case law that, at least in principle, a person may occupy two homes as his residence and be a sitting tenant of either property. The classic instance of this is the person who lives in the country, but maintains a residence in town for the purposes of his work and which he occupies as a sitting tenant; see for example Langford Property Co. Ltd v Tureman [1949] 1KB 29.

Court proceedings were issued in July 2014 to recover possession of the mews house on two alternative grounds:

a) Mr C’s quality of occupation of the mews house did not satisfy the “residence” requirement under the Rent Acts, alternatively;
b) it was reasonable for the court to make an order for possession because of suitable alternative accommodation being available to Mr C at his home in Surrey.

As expected Mr C deployed the ‘two homes” defence in the court proceedings, and argued that the mews house was used as his second home. He also argued that his property in Surrey was not a suitable alternative to the mews house in Chelsea.

Suitable alternative accommodation

Paragraph 4 of Part IV of Schedule 15 of the Rent Act 1977 provides that:

“…accommodation shall be deemed to be suitable…if it consists of either:

(a) premises which are to be let as a separate dwelling such that they will then be let on a protected tenancy…or;
(b) premises to be let as a separate dwelling on terms which will, in the opinion of the court, afford to the tenant security of tenure reasonably equivalent to the security afforded by Part VII of this Act in the case of a protected tenancy of a kind mentioned in paragraph (a) above,

and, in the opinion of the court, the accommodation fulfills the relevant conditions as defined in paragraph 5 below”.

An interesting question in this case was whether a property which is not let on a protected tenancy or on terms with equivalent security for tenure can qualify as suitable alternative accommodation for the purposes of paragraph 4 of Part IV of Schedule 15. In other words are the terms of paragraph 4 exhaustive so as to exclude the Surrey property held on freehold tenure by the sitting tenant himself. The editors of Woodfall say that this question has not yet been definitively determined. However, they also express the view that the provisions of paragraph 4 are not exhaustive and that there is some support in the case law for this. Interestingly one case not cited in Woodfall, but which assists the landlord’s argument in this regard, is the Court of Appeal decision in Luttrell v Addicott [1946] 2 All ER 625. Whilst the trial Judge in our case appeared to accept the non-exhaustive test, he did not have to make a finding on this issue for the reasons set out below.

The residence test

The freehold of the property in Surrey was purchased by Mr C in 1980 under the Leasehold Reform Act 1967, whereby a long leaseholder can buy the freehold of his property (enfranchise) from the landlord subject to certain strict criteria, one of which in 1980 was that the property must have been the only or main home of the tenant for a period of at least 5 years before the tenant exercises the right to enfranchise

The litigation process requires the parties to disclose all relevant documents to each other and disclosure proved problematic throughout the proceedings, involving both specific and third party disclosure court applications.

The documents which came to light in this disclosure exercise were sourced from a third party and related to the purchase of the Surrey property in 1980. This information was not known by the Claimant at the commencement of court proceedings.

This documentation had a devastating effect upon Mr C’s defence.

The issue which came into sharp focus only a matter of a week or so before the trial was whether, as a result of the late document disclosure, Mr C was ever a statutory tenant. The documentary evidence showed that by the time Mr C’s contractual tenancy of the mews house came to an end in the 1960s he was not living in it. The significance of this was that once the statutory tenancy had been lost it could not be regained by subsequent occupation. However, if in fact a statutory tenancy had arisen upon the expiry of the contractual tenancy in the 1960s, it would have been more difficult for the landlord because absences from the property by the tenant will not necessarily deprive the tenant of Rent Act protection.

Having reviewed the evidence the judge held that Mr C and his family had moved out of the mews house in the 1960s and so no Rent Act tenancy had ever come into existence. That being so the trial Judge did not need to determine whether the Defendant had lost his statutory tenancy by not occupying the property in more recent years and nor did he need to determine the suitable alternative accommodation issue. Mr L was awarded possession of the mews house, costs and damages being the difference in the low registered rent and market rent for a period of some 4 years.

Conclusion

If there is a suspicion that the sitting tenant no longer lives at the property landlords are well advised to look carefully into the tenant’s circumstances and the occupational position to consider whether there is enough evidence to bring a claim for possession.

21 Sep 2015

Bernard D’Monte