A Rent Increase May Create a New Tenancy Agreement
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A recent County Court decision held that increasing the rent may result in the creation of a new tenancy agreement, where it can be shown that this was the intention of both the landlord and the tenant.
Background to the case
The background to the case was that Tower Hamlets Community Housing (THCH) rented a property to Mr and Mrs. Desir, under an assured tenancy agreement. Both tenants passed away. The tenant's daughter claimed that she had been living at the property for the past 10 years, and therefore had the right to succeed.
THCH commenced possession proceedings. However, 2 months prior, THCH had served a notice of rent increase. This was paid by the tenant's daughter. THCH's tenancy agreements stated that if, following a tenant's death, THCH agreed in writing to change the amount of rent, it would create a new tenancy agreement.
The District Judge found that a new tenancy agreement had been created for the tenants' daughter, from the date of the rent increase. The possession claim was dismissed.
Considerations for notice to quit possession proceedings
This case raises some important points to consider when commencing notice to quit (NTQ) possession proceedings and the property has, for whatever reason, been placed into use and occupation:
Make sure that the rent account is changed to a use and occupation account where you are aware that a tenant has passed away.
Check whether anyone has the right to succeed in the tenancy agreement.
Review your tenancy agreements to check what changes or comments made in writing say about creating a new tenancy agreement.
Ensure that any internal processes surrounding rent increases contain the correct wording when sending to occupiers of a property where the tenants are deceased. Importantly, change the wording from rent to use and occupation.
How can Tozers help?
Our Affordable Housing team have over 25 years' experience in this sector, forming close working relationships with their housing clients. To find out more about the areas they advise on and their bespoke services please visit their page or contact a member of the team.