Giving legal shelter to tenants
9 February 1997
18 December 2013
High Court decides: liquidators of insolvent landlords can disclaim leases with the effect of extinguishing the tenant’s leasehold interest
5 December 2013
30 May 2013
29 July 2013
6 December 2013
Roger Pearson looks at how a ruling in a housing case has reversed an earlier decision which left tenants unprotected by law.
A Court of Appeal ruling has given tenants who live above business premises good reason to celebrate.
The decision in the three-case appeal of Wellcome Trust v Alhammad, Ebied & anor v Hopkins & anor and the Church Commissioners for England v Baines, reverses a 1989 Appeal Court ruling and, according to a leading housing lawyer, puts right a legal wrong which has disadvantaged many tenants.
Wellcome Trust v Alhammad was the lead of the three cases, all of which focused on the same principles.
Andel Alhammad had lived in a third floor flat at Egerton Mansions off London's Old Brompton Road since 1980. The ground floor was let as a shop. However, in December 1993 Alhammad's landlord, who held a lease from the freeholder of the property, both in respect of the shop and three residential flats, surrendered the head lease.
Under the principles laid down in the 1989 case of Pittalis v Grant, Alhammad was left unprotected by law. Up to that point he had Rent Act protection in respect of the tenancy granted by the leaseholder. But once the lease was surrendered he lost his rights. The landlord took advantage of Alhammad's change in status and, in April this year, took him to West London County Court where it obtained a possession order.
It is that order which has led to a new Court of Appeal stance. In Pittalis the court held that tenants lose their protected status when a leaseholder surrenders its lease to the freeholder.
However, Lords Justices Leggatt, Morritt and Brook have now ruled that in such circumstances the tenant retains his or her protected tenancy rights even if the lease does revert to the freeholder.
"It is a decision which will give security to probably hundreds of tenants the country over," says Alhammad's solicitor Saimo Chahal, who heads the housing law department at Bindman & Partners.
"There are people with tenancies granted as long as 20 or 30 years ago who have had their rights extinguished overnight," she says.
"Many tenants have ended up with the stark choice of either having their rents raised to market rent levels or of being forced to leave their homes. This latest ruling is very good news for such tenants."
The decision is a significant landmark in landlord and tenant law, and in Chahal's view it is yet another case which disproves the theory about the sluggish speed at which the law moves. The passage to the Court of Appeal, where Chahal instructed Paul Morgan QC and Stephen Cottele, was rapid. Judgment in the county court was passed at the end of April and it was reversed in the Court of Appeal on 30 July.
For Chahal it was a question of pulling out all the stops. Her client had previously been represented by another firm and switched to Bindmans only two weeks before the West London County Court hearing.
"Two weeks is a painfully short time to prepare a case of this nature," says Chahal. "It is a classic example of how the courts can move very rapidly when the matter is one that has wide ranging implications for a great many people."
She adds that it is also a case which emphasises the value of legal aid. Without it Alhammad would not have been able to take on a landlord of this stature and in those circumstances tenants throughout the country would have been deprived of a vital ruling in their favour.