London Housing & Commercial Properties Ltd v Cowan

Fair rent–If rent officer concludes that premises have been improved, committee must simply proceed to an assessment–Their assessment must be a straightforward reassessment of the current fair rent, not one which either is limited to the extra value inherent in the improvement nor reflects their own adverse view of the improvement’s consequences–Change from gas boiler to modern electrical boiler entities landlord to current fair rent though normal three-year period between reviews has not elapsed This was an appeal by London Housing & Commercial Properties Ltd, of 92-94 Judd Street, London WC1, from a decision of a rent assessment committee of the London Rent Assessment Panel dated August 1 1975 registering a fair rent of £295 per annum in respect of the first-floor flat at 116 Thanet House, Thanet Street, London W1, occupied by the respondent, Mr Joseph Cowan. Mr J Peppitt (instructed by Rooks & Co) appeared for the appellants, and Mr S Sedley (instructed by the Camden Community Law Centre) represented the respondent. Mr H K Woolf (instructed by the Treasury Solicitor) appeared as amicus curiae. Giving judgment, LORD WIDGERY said that the respondent lived in Victorian-built premises owned by the appellants and had a regulated tenancy which fell within Part IV of the Rent Act 1968. On January 16 1973, on an application by the respondent, the rent officer determined a fair rent for the respondent’s flat at £295 per annum including £28 for services. He duly registered that rent. Shortly after that the appellants took out of the premises a somewhat unreliable gas boiler and replaced it with a modern electrical boiler at a cost of £220. They then approached the rent officer with a view to getting the rent increased on account of this improvement. They had to approach the rent officer because section 44 of the 1968 Act laid down a three-year period within which time the registration of a regulated rent could not normally be queried or altered. But subsection (3) made an exception where there had been such a change in the condition of the dwelling-house (including the making of any improvement therein) as to make the registered rent no longer a fair rent. In considering whether that exception applied, it was clear that the proper approach was to ask whether there had been changes, and if so, to ask whether, as a result of those changes, the registered rent was no longer a fair rent. There had to be changes of a statutory kind before any question of a review could arise. It had been argued that the rent officer, in coming in within three years, had to confine any increases in rental to those which followed from the alteration in the condition of the house which itself gave rise to his right to come in in mid-term. He (his Lordship) was quite satisfied that that was not the right answer. A rent officer making an assessment of a fair rent did so under section 46, and under no limitations beyond those contained in that section, which expressly provided for regard to be had on an assessment to all the circumstances, and in particular to the age, character and locality of the property and its state of repair. Counsel for the respondent claimed that the rule was unfair to tenants in conditions of inflation. He argued that a tenant, following a mid-term assessment, might have to pay a higher rent than he would have had to do if there had been no mid-term assessment. That was true, but it had to be remembered that all that was happening when there was a reassessment was that the tenant was having his rent brought up to a fair rent somewhat earlier than he would otherwise have done. The three-year limitation was intended as an administrative limit, not as a means of giving tenants the right to live on at less than a fair rent for the better part of three years. Nothing in R v Fulham, Hammersmith & Kensington Rent Tribunal, ex parte Hierowski [1953] 2 QB 147 contradicted this opinion. When on May 15 1974 the landlords sought a review under section 44(3), the matter came before the rent officer and the usual consultative procedure was followed. There was an argument about whether the new boiler was a section 44(3) improvement, but the rent officer held that it was, and registered a new fair rent of £312, including £34 for services. The landlords were dissatisfied, and went to the committee. After hearing argument, the committee came to the conclusion that the new water-boiler was not sufficient to invoke section 44, in that it was not an improvement of such a character as to render the rent of £295 no longer a fair rent, and they decided to restore that figure in the register. It was obvious that the committee, having looked at the improvement, thought little of it, and thinking their functions were limited, felt that what they should do was to determine a new fair rent which was fair in the sense of restoring the status quo prior to the mid-term application. Were they right or wrong?  Mr Woolf had submitted that the only concern of the committee so far as taking on new applications was concerned was to see that the matter had properly been referred to them under the terms of schedule 6 to the 1968 Act, and that it was for the rent officer to consider whether there had been any improvement. The committee and the rent officer, said counsel, were part of a unified whole created for the fixing of a fair rent; if the rent officer had reached a conclusion about improvement of the relevant premises and thought that the rent should be increased, it was not for the committee to question the propriety of the rent officer’s view, and they should simply proceed to an assessment of the fair rent. Mr Sedley was the principal contender on the other side. The difference between the two arguments was in a sense small, turning on the proper meaning of the expression ‘fair rent.’  Mr Woolf said that this meant the section 46 rent, Mr Sedley that in the circumstances it could include a rent deliberately cut down so as to be no more than the figure fixed in 1973, a figure which ought never to have been departed from anyway. He (his Lordship) had reached the conclusion that Mr Woolf was right, and that a fair rent was a section 46 rent. He was unable to accept that one could ever adjust or distort the rent to correct a supposed misuse of section 44. The appeal should be allowed, and the case sent back to the committee with a direction to make a straightforward section 46 reassessment. THOMPSON and KENNETH JONES JJ agreed, and an order was made accordingly. Leave to appeal to the Court of Appeal was granted.