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Housing: The status of tenants after the sale of reversionary interests in residential tenancies

C sold to D1 (a housing association) their reversionary interest in a number of residential tenancies subject to the Rent Act 1977, those tenants (such as D2) now being tenants of D1.

On the sale of the reversionary interest the tenants ceased to be regulated tenants under the Rent Act 1977; the question for the Court was what their present status was. C and D2 said they were secure tenants and also housing association tenants, D1 said assured tenants.

The case turned on the proper construction of s.38(5) Housing Act 1988. The Court considered that although the drafting of the relevant provision was not straightforward, to the point where it was not unreasonable to consider there had been a drafting error. Ultimately the wording of s.38(5)(d) was clear and included C as a public body for the purposes of s.38(1) and therefore by s.38(3) the tenancy was not capable of being a protected tenancy, secure tenancy etc and Sched 1, para 1 of the Act was disapplied. The tenants were now assured tenants of D1 pursuant to s.1 HA 1988. The status of the tenant's security depended upon the protection that the new landlord was capable of giving under statute. D1 was not capable of granting secure or housing association tenancies.

/ 2nd Aug 2011


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