Court of Appeal confirms treatment of tenant improvements on expiry of long residential leases
The Court of Appeal has clarified the treatment of tenants’ improvements effected under a long residential lease when, after the expiry of the lease, the tenant remains in occupation as an assured tenant under the provisions of Schedule 10, Local Government and Housing Act 1989. Martin Rodger QC, leading Dr Victoria, represented Mrs Hughes, a tenant who had made extensive improvements at her own expense to a flat which she held on a long residential tenancy. She exercised her right to remain in occupation as an assured tenant after the expiry of the lease and her improvements were correctly disregarded by the Rent Assessment Committee when it determined the initial rent payable under Schedule 10 of the Local Government and Housing Act 1989. The Court of Appeal held that, on the second rent determination she was not entitled to have the improvements disregarded because the rent then fell to be determined under section 14 of the Housing Act 1988, and the improvements had not been carried out under an assured tenancy. On the proper interpretation of Schedule 10 to the 1989 Act, the improvements fell to be taken into account even though the effect was that the new rent as assessed exceeded the statutory maximum for protection as an assured tenant, the tenant lost her protection and the landlord became entitled to serve a notice to quit.
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