Earlier this month, Judgment was handed down by the Court of Appeal in the case of Gill v Lees, which was an opposed lease renewal appeal in which ground (a) of section 30 of the Landlord and Tenant Act 1954 – the disrepair ground - was analysed.
The appeal concerned a landlord's opposition to the grant of a new tenancy pursuant to the Act. The tenant had served a section 26 notice requesting a new tenancy and the landlord had served a counter-notice opposing the grant relying on grounds (a), (b) and (c) of section 30 of the Act.
At trial, although breaches were acknowledged, collectively they were not deemed by the judge to be enough to deny the tenant a new tenancy. The appeal was about the first ground (a), and the relevant factual circumstances to the appeal were that the premises were badly out of repair when the s26 request was served, but this had been rectified by the time the case came to court.
Section 30(a) of the Act states 'where under the current tenancy the tenant has any obligations as respect the repair and maintenance of the holding, that the tenant ought not to be granted a new tenancy in view of the state of repair of the holding, being a stat resulting from the tenant's failure to comply with the said obligations'.
The Court of Appeal was asked to determine (i) at what time a tenant had to be in breach of its repairing obligations for the landlord to satisfy ground (a) and (ii) what approach the Court should adopt, generally, to the question of whether the tenant 'ought not' to be granted a new tenancy.
In answer to the first question, Lord Justice Lewison concluded that there is nothing (case law or otherwise) that confines the Court to considering only the state of repair of the holding at the date of hearing. Rather, in his view, it was more consistent with the underlying policy of that ground of opposition to take a more holistic approach and so what had happened between the date of the notice (or counter-notice) and the date of the hearing with regards to the repair of the property was a relevant consideration.
On the second point, the landlord argued that the question should be approached solely from the perspective of the landlord and that any hardship to the tenant must be ignored. The Court of Appeal disagreed, and decided that, to determine whether a tenant 'ought not' be granted a new lease, the actions of the actual landlord and the actual tenant should be considered. In this case, the tenant's attitude to, and evidence about the repairs during the proceedings were all taken into account.
The appeal was dismissed and the trial judge's finding that the tenant should not be denied a new tenancy was upheld. This appeal is likely to bring clarity to the applicability of ground (a) in unopposed lease renewal claims where tenants neglect their repairing obligations throughout the duration of a lease, but who eventually, albeit belatedly, comply with their repairing obligations.
The conclusion to be drawn is that a court is less likely to refuse a lease for a 'bad tenant' discretionary group in the absence of continuing egregious breaches. As a result, such grounds of opposition are of growing limited effect and landlords should look to see if a mandatory ground of opposition can also be used so that at least a tenant who has taken its lease obligations less that seriously can not expect automatically to get statutory compensation.
