Can Term in Rent Book Create an Assured Tenancy?

Andrews & Andrews v Cunningham [2007] EWCA Civ 762 Waller, Wilson and Lawrence Collins 

By s.19A, Housing Act 1988, an assured tenancy entered into after February 28, 1997, is an assured shorthold tenancy unless it falls within one of the exceptions found in Sch.2A. 

Paragraph 1 of Sch.2A excepts a tenancy where the landlord had served notice on the tenant stating that the tenancy was not to be shorthold before it was entered into. 

Likewise, para.3 excepts a tenancy which "contains a provision to the effect that the tenancy is not an assured shorthold tenancy." 

By Sch.1, para.10, 1988 Act, a tenancy granted by a resident landlord (as defined) is not assured. 

On the death of a resident landlord, the tenancy does not become assured for two years, during which the tenant may be evicted, or a new resident landlord may move in - Sch.1, para.20. (See also Sch.1, para.17(1)(c) where the property vests in the Probate Judge).

If neither of those events occurs, the tenancy becomes assured. 

The claimants were the executors of the estate of Mr Hodges, who died in November 2001. 

The estate included a house which had been divided into flats. 

Before his death, Mr Hodges lived in the basement flat. 

In 1999, he granted the defendant a tenancy of a flat on the house's ground floor. 

There was no written tenancy agreement, but the defendant was given a rent book which said on the front, "assured tenancy". 

The defendant cooked Mr Hodges' meals, cleaned his bedroom, helped him to bed and drove him around the area. As Mr Hodges' health deteriorated, the defendant provided greater support. 

In September 2005, the claimants commenced proceedings for possession of the property because the defendant was an assured shorthold tenant. 

The defendant filed a defence, asserting that he was a fully assured tenant and that no adequate case had been pleaded to entitle the claimants to possession. In support of his defence, the defendant argued that his tenancy was excluded from being an assured shorthold tenancy because:

(i) the rent book - which referred to an "assured tenancy" - was a notice under para.1, Sch.2A, 1988 Act, excluding the tenancy from being shorthold; and,

(ii) the oral tenancy reflected the agreement between the defendant and Mr Hodges that the tenancy was to be of a long-term nature which comprised a provision to the effect that the tenancy was not an assured shorthold and was excluded from being such by para.3, Sch.2A.

The district judge accepted the defendant's evidence that the agreement was for a long-term tenancy and found that using the words "assured tenancy" on the front of the rent book reflected that agreement.

He, therefore, held that the rent book was a notice for para.1 and dismissed the claim for possession. 

An appeal to the circuit judge was allowed. 

The Court of Appeal dismissed an appeal by the defendant. 

The rent book was not capable of being a notice under para.1, Sch.2A, because:

(a) an assured shorthold tenancy is a form of assured tenancy, and therefore, the inclusion of the words "assured tenancy" on the front cover did not amount to a statement that the assured tenancy to which the rent book related was not a shorthold;

(b) the rent book was capable of applying equally to fully assured tenancies and assured shorthold tenancies;

(c) for a notice to be valid under para.1, it must be a written notice;

Paragraph 3 of Schedule 2A applies only to an "assured tenancy which contains a provision to the effect that the tenancy is not an assured shorthold". 

At the date of the grant of the tenancy, the tenancy was incapable of being any form of assured tenancy because Mr Hodges lived in a flat in the house and was a resident landlord (para.10, Sch.1, 1988 Act). 

Accordingly, as there was no assured tenancy, para.3, Sch.2A could have had no effect. The court expressed doubt about whether an oral agreement could satisfy para.3, but left the question open.