R (on the application of Haysport Properties Ltd) v Rent Officer of the West Sussex Registration Area

Landlord carrying out repairs under repair notice – Landlord applying for determination of fair rent within two years of previous rent registration – Whether repairs constituting change in “condition” of dwelling-house – Section 67(3)(a) of the Rent Act 1977 – Rent officer refusing application – Judge refusing application for judicial review – Appeal allowed In April 1998 the appellant landlord applied under section 67(1) of the Rent Act 1977 for the registration of a fair rent in respect of 41 Park Road, Hassocks, West Sussex, which was let under a “regulated tenancy” within the meaning of the Act. Following an inspection in June 1998, the respondent rent officer determined a fair rent of £3,224 pa. Previously, the fair rent had been £2,808 pa. The tenant registered an objection, and the matter was referred to a rent assessment committee, which concluded that in view of the very poor repair of the property, part of which was uninhabitable, the rent should be registered at £1,820 pa. Meanwhile, Mid-Sussex District Council served a repair notice on the appellant under section 189(1) of the Housing Act 1985. The appellant duly carried out the substantial repairs, as required, and then made a further application to register a fair rent. As the rent had been fixed originally by the rent officer and then by the rent assessment panel, section 67(3) of the Rent Act 1977 applied. This section states: “where a rent for a dwelling-house has been registered under this Part of this Act, no application… by the landlord alone for the registration of a different rent for that dwelling-house shall be entertained before the expiry of [two years] from the relevant date… except on the ground that, since that date, there has been such a change in (a) the condition of the dwelling-house (including the making of any improvement therein)… or (d) any other circumstances taken into consideration when the rent was registered or confirmed, as to make the registered rent no longer a fair rent”. By a decision letter of 26 May 1999, the rent officer refused the appellant’s application, stating that the changes were not sufficient to mean that the registered rent was no longer a fair rent. The appellant sought judicial review of that decision, contending that it was unreasonable. The respondent rent officer argued that the words in section 67(3)(a) did not, on their true construction, include any change attributable to repairs because of the definition in section 75(1), which states that “‘improvement’ includes structural alteration, extension or addition and the provision of additional fixtures and fitting, but does not include anything done by way of decoration or repair.” The respondent further contended that where a change in the condition of the dwelling-house was consequent upon the landlord complying with a repair notice or with his contractual obligations, the benefit of those obligations was already reflected in the rent that a tenant was obliged to pay, and therefore was not “improvement” for the purposes of section 67(3)(a). The judge dismissed the application. The appellant appealed. Held: The appeal was allowed. 1. On the true construction of section 67(3)(a), it was plain that repairs could constitute a “change in condition of the dwelling-house”, notwithstanding the fact that repairs were excluded from the definition of “improvement” in section 75(1). The wording of section 75(1) did not have to be read into section 67(3). 2. When making a determination of fair rent, the rent officer should take into account a landlord’s repairing obligation, and where the property is out of repair, the officer should also take into account the likelihood of that obligation being performed and the time within which it will be performed. It does not follow that the determination of a fair rent for a property that is out of repair, but has the benefit of a landlord’s repairing obligation, should be at the same level as a fair rent for the same property in repair. Indeed, save in a case where it is virtually certain that the works of repair are to be carried out forthwith, it is probable that a fair rent for the property out of repair would be less than a fair rent for the property in repair. Accordingly, the judge had fallen into error in refusing the application. London Housing & Commercial Properties Ltd v Cowan [1976] 2 All ER 385 and Sturolson & Co v Mauroux [1988] 1 EGLR 66 considered. Steven Woolf (instructed by Wallace & Partners) appeared for the appellant; Martin Rodger (instructed by the Treasury Solicitor) appeared for the respondent. Thomas Elliott, barrister