We are grateful to Nearly Legal for highlighting this interesting County Court case on the issue of when a new tenancy might be created following the death of the tenant.   Whilst the case relates to a local authority tenancy, the cautionary note is equally applicable to a private sector tenancy.

The issue at hand was whether a landlord might accidentally grant a new tenancy to the person in occupation of the property following the death of the tenant.  The answer is ‘yes’ and here is why that might occur.

Background

The case was Tower Hamlets Community Housing v The personal representative of Joseph Desir & Ors. Mr & Mrs Desir had an assured tenancy with Tower Hamlets Community Housing (“LL”).  Sadly, both Mr & Mrs Desir died within a short period of each other in Spring 2020.  Their daughter, who had been their live-in carer for around 10 years immediately prior to the death of the tenants, claimed to have succeeded to the tenancy. 

Whilst the LL was investigating the succession claim it serve notice to quit at the property and in 2021 began possession proceedings (notwithstanding that it had yet to conclude its investigation/decision on the succession claim).    In addition to the above and prior to the issue of the possession claim, LL served a notice pursuant to section 13 Housing Act 1988 increasing the rent (for further information  see here).  The increased rent was paid by the daughter.

The possession claim

The tenant’s daughter was joined to the possession claim and defended on the basis of her succession right but also seeking a determination on her claim that, in increasing the rent following the death of the tenants, the LL had in fact created a new tenancy to her.

Because a notice to quit operates to end  the tenancy (and thus possession is sought following expiry of the same) a LL may only accept sums that would have been due as rental payments as “use and occupation” charges (e.g. mesne profits as distinct from rent) whilst the occupier remains in possession, awaiting a possession order or eviction. That does not prejudice the LL’s position.  However, the same cannot always be said if, during the period following the service of the notice to quit, rental payments are demanded or a section 13 rent increase notice is served as occurred here. 

The Court considered that, where the occupier can show that the intention of the LL in serving the rent increase notice was to create a new tenancy, then that is exactly what will be inferred.  The daughter’s claim on this point was assisted in part by a term of the tenancy granted to the deceased former tenants which stated:-

“In accordance with the provisions of Ground 7 acceptance by [LL] of Rent after your death shall not be regarded as creating a new Periodic tenancy unless [LL] agrees in writing to a change in the amount of Rent, the period of the Tenancy or the Premises, which are let or any other term of the tenancy”

The daughter was able to rely upon this provision in the tenancy to substantiate her claim that LL had, in serving the rent increase notice, exhibited a clear intention to create a new tenancy and as such the possession claim must fail.  LL was further hindered as it had never actually communicated to the daughter that the rental payments she had been making were to be accepted only as “use and occupation charges” pending the possession claim, and not as rent.

In light of the above the possession claim duly failed and the daughter was able to remain in occupation under a new tenancy (with new succession rights) granted to her and which was effective from the date of the increased rent on expiry of the section 13 rent increase notice served earlier by LL 

Conclusion

The above issue is not limited to providers of social housing.  Succession of tenancies on death of the tenant applies not only to assured tenancies but also private sector assured shorthold tenancies (see our Legal Update on the latter point here).

Upon notice of the death of a tenant the conduct of the LL is going to be hugely important.  In most cases the estate of the deceased tenant will wish to bring the tenancy to an end promptly - the tenant’s estate remaining liable for the rent due for the duration of the period following death that the property is not handed back to the LL.  However, on the odd occasion the LL may be presented with an occupying relative or friend/partner of the deceased tenant (who is perhaps in no hurry to vacate).  In those circumstances how the LL conducts itself following notice of the tenant’s death is potentially going to be very important and may affect how and when the property is vacated and handed back to the LL.

Whilst compassion should be shown to those managing the deceased’s estate it is quite possible that factors affecting that will arise, such as a lack of payment of rental/use and occupation charges due and/or a lack of urgency on the part of the estate to see the property vacated.  Despite these likely frustrating factors, given the potential for tripping up, the LL should seek advice as to their options and the “do’s” and “don’ts” before taking a step, if nothing else so as not to delay recovery of possession.

For more information, please feel free to contact a member of the team on 01435 897297 or info@kdllaw.com.  

Disclaimer

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