Resident Landlords under the Housing Act 1988
Resident Landlords
Practitioners will be aware of the general rule under the Housing Act 1988 that a tenancy can be neither an assured nor an assured shorthold tenancy (AST) if the landlord of the property is a resident landlord. However, not all is crystal clear in this area. For example if a landlord wishes to rent out a ‘granny annex’ attached to his house – would the landlord be classified as ‘resident’ in this situation ? The distinction is important since it determines whether a standard AST, or some other form of tenancy agreement is to be used for the letting.Two categories
There are, in broad terms, two categories of occupancy that can occur in the situation where there is a degree of communality between the landlord and his occupiers. These are:- lodger
- tenant with self-contained accommodation
In the second case, the landlord and the tenant live in the same building but they each have their own “separate dwelling”.
Definition
The categories of tenancy which may not be assured (or AST) are defined in Part 1 of Schedule 1 of the Housing Act 1988 and landlords will be familiar with many of the common exceptions; business tenancies, tenancies at high or low rents, holiday lettings and of course resident landlords (this is not a complete list by any means).Schedule 1 defines “resident landlord”:
Resident landlords
10. (1) A tenancy in respect of which the following conditions are fulfilled -
(a) that the dwelling-house forms part only of a building and, except in a case where the dwelling-house also forms part of a flat, the building is not a purpose-built block of flats; and
(b) that, subject to Part III of this Schedule, the tenancy was granted by an individual who, at the time when the tenancy was granted, occupied as his only or principal home another dwelling-house which, -
(i) in the case mentioned in paragraph (a) above, also forms part of the flat; or
(ii) in any other case, also forms part of the building; and
(c) that, subject to Part III of this Schedule, at all times since the tenancy was granted the interest of the landlord under the tenancy has belonged to an individual who, at the time he owned that interest, occupied as his only or principal home another dwelling-house which, -
(i) in the case mentioned in paragraph (a) above, also formed part of the flat; or
(ii) in any other case, also formed part of the building; and
(d) that the tenancy is not one which is excluded from this sub-paragraph by sub-paragraph (3) below.
(2) If a tenancy was granted by two or more persons jointly, the reference in sub-paragraph (1)(b) above to an individual is a reference to any one of those persons and if the interest of the landlord is for the time being held by two or more persons jointly, the reference in subparagraph (1)(c) above to an individual is a reference to any one of those persons.
In summary then, a landlord is considered to be a resident landlord if he lives continuously in the same building (or in another dwelling which forms part of the same building) as his tenant unless the two dwellings are contained in a purpose-built block of flats. In fact, the resident landlord provisions of the Housing Act 1988 are very similar to those of the preceding Rent Act 1977 and so the previous case law applies as we shall see later. In fact, the resident landlord provisions of the Housing Act 1988 are more stringent than those of the 1977 Act in relation to residence. The Housing Act 1988 stipulates that the landlord must occupy the building in question as his only or principal home.1
Purpose-built
“Purpose-built block of flats” is defined in sch. 1, para 22. It must as constructed contain two or more flats. The date of construction is the relevant time to consider, and a distinction is drawn between conversions of existing buildings (which would only in the most exceptional circumstances constitute “purpose-built blocks of flats”) and constructions of new buildings (which if they consist of two or more flats will be within the definition).
Status of landlord
The person who granted the tenancy (and any successive landlords who subsequently owned the property during the tenancy) must have been an individual or individuals (i.e. not a company or institution) and he must have occupied another dwelling-house in the same building as his only or principal home. In the case of joint landlords, each of the landlords must be an individual.2
“Same building”
Whether the dwelling-house let to the tenant forms part of the same building (or flat) as the dwelling-house occupied by the landlord is an issue within the legislation which seems to cause the most confusion to practitioners. This confusion is understandable, since the distinctions are obscure and in some cases appear to lead to conflicting conclusions – something all practitioners of housing law will find eminently familiar !
For example, is our granny annex in the initial example to be considered as “part of the building” ? Clearly where the annex is a separate building, say adjacent to the landlord’s own dwelling (or even at the bottom of the landlord’s garden), then it will not be part of the same building (as there is a no significant physical connection between the two buildings) and thus the landlord will not fall within the “resident landlord” status.
But, what if the landlord builds an extension onto his house for use as rental accommodation, and the extension has no interconnecting doors with the original building ?
Whether or not the landlord’s dwelling house and the tenant’s dwelling house is deemed to form part of the same building is a question of fact and degree. But in coming to an overall decision on this matter, it is likely that a court will pay significant regard to the intention of the statutory provision when the legislation was drafted3, which was to allow the landlord to remove a tenant who lives in close proximity to him.
Case law
To help us understand how the law distinguishes what is part of the same building and what is not, it is essential to study the case law in this area. As a starting point, the judge’s pronouncement in the case of Bardrick v Haycock4 is helpful.
The English word “building” covers an immense range of all sorts of structures. It is an ordinary English word, and its meaning must therefore be a question of fact, always assuming that the court directs itself correctly as to the intention and meaning of the statute which uses it. As a matter of law, to give a defined or precise meaning to the word “building” is an impossibility. It is beyond the capacity of even the most consummate master of the English language to do so. This itself is, in my judgement, an indication that Parliament is leaving the question of fact to the judge …
I have no doubt that the intention of Parliament in enacting [the statute] was to relieve landlords where it was reasonable to do so ….[T]he mischief at which this section was aimed was the mischief of that sort of social embarrassment arising out of close proximity which the landlord has accepted in the belief that he could bring it to an end at any time allowed by the contract of tenancy
(per Scarman LJ, in Bardrick v Haycock (1976))
In Bardrick v Haycock, the landlord lived in a self-contained unit attached to the end of a building with no interconnecting door. The court, in this instance, held that the resident landlord exception (under Rent Acts) did not apply - thus highlighting the importance of interconnections in helping to establish whether an annex forms part of the same building. Also, in Bardrick v Haycock it was an important factor that the two dwelling units had separate front doors. This further reduced the possibility of constant and potentially embarrassing social encounters, between the landlord and his tenant.
In Griffiths v English5 the landlord owned a house (also divided into flats) which had an extension built on each side. In fact, there were no internal interconnections, and the landlord lived in one extension, and the tenant in another. The Court of Appeal concluded that property could constitute one building – a decision which appears to conflict somewhat with the decision under similar circumstances in Bardrick v Haycock. However, one factor that appears to distinguish the two cases was the absence of separate gardens in Griffiths.
In Lewis-Graham v Conacher6, an extension which was originally a granny flat and garage had been added to a semi-detached house. It had connecting doors between the house and the extension which were locked. There was a common gas, electric and water supply. At that stage, it was clearly one building. The landlord subsequently carried out works to divide the two dwellings into “separate buildings” after serving notice on his tenant (but had not completed the work before the notice had expired). The Court held that there was still one building. Interestingly, the Court also stated that they did not feel that it would be a separate dwelling even if the services were separate (as they were subsequently).
In another case7 two adjoining premises had been converted by the removal of internal walls and the construction of an inter-communicating door between the two premises. Not surprisingly, the two dwelling houses were held to be part of the same building.
Conclusion
According to Humpty-Dumpty, "When I use a word I know exactly what it means, no more and no less". The definition of 'resident landlord', 'building' and 'purpose-built block of flats' can be treated in the same vein – it is what the court thinks it is !References
1. Housing Act 1988, Sch. 1, para 10(1)(b).
2. Housing Act 1988, Sch. 1, para 10(2).
3. Previously as s.12 of the Rent Act.
4. Bardrick v Haycock (1976) 31 P&CR 420.
5. Griffiths v English (182) 261 EG 257.
6. Lewis-Graham v Conacher [1992] 1 EGLR 112, CA.
7. Guppy v O'Donnell (1979) 129 N.L.J. 930 (Westminster County Court).