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Certainty at Last for Tenants of Mutual
Housing Co-operative Associations
Berrisford v Mexfield [2011] UKSC 52
Summary

The Supreme Court has concluded that a tenant of a fully mutual housing co-operative association has a 90 year tenancy determinable in accordance with the express provisions of the agreement and not one that is void for uncertainty.

This is a significant decision for anyone representing tenants or landlords of housing co-operative associations, as well as dealing with some interesting points on construction of tenancy agreements.

The Facts
  • Ms Berrisford is a tenant of 17 Elton Avenue pursuant to a written tenancy agreement dated 13 December 1993.
  • Ms Berrisford's Landlord (Mexfied Housing Co-Operative Ltd) are a fully mutual housing co-operative association founded as part of a mortgage rescue scheme. Mexfield were set up with a view to buying mortgaged properties from individual borrowers that were in difficulty and they then let those properties back to the individual.
  • Tenants such as Ms Berrisford have no statutory protection save for the limited protection given by the Protection From Eviction Act 1977.
  • The express terms of the tenancy provided for the property to be let to Ms Berrisford "from month to month until determined as provided in this Agreement."
  • Clause 5 of the tenancy agreement allowed Ms Berrisford to determine the tenancy by giving one month's notice in writing.
  • Clause 6 of the tenancy agreement allowed Mexfield to terminate the tenancy ONLY In certain specified circumstances such as non-payment of rent or failure to comply with the terms of the tenancy agreement.
  • The Court of Appeal concluded, following authority including House of Lords authority in Prudential v London Residuary Body [1992] 2 AC 386, that this agreement was of uncertain duration and was therefore void. A tenancy by conduct therefore arose instead and this was determinable by a simple notice to quit complying with the Protection From Eviction Act 1977. Mexfield were therefore entitled to possession.
The Issues
The court considered the following issues:
  1. Whether the landlord was able to determine the agreement by giving one month's notice in a notice to quit?
  2. Whether the arrangement was capable of being a tenancy as a matter of law?
  3. Whether the tenancy would have been treated as a tenancy for life before 1926?
  4. Whether the tenancy became one with a term of 90 years by reason of s149(6) Law of Property Act 1925?
  5. Whether, alternatively, Ms Berrisford was entitled to resist the claim for possession on the basis of simple contract by seeking injunctive relief?
The Decision

The court (Lord Neuberger giving the lead judgment) concluded that Ms Berrisford has a tenancy for a 90 year term determinable pursuant to Clauses 5 or 6 of the tenancy agreement or on her death. Mexfield were therefore not entitled to possession of the property as they had not relied upon Clause 6 and instead had simply sought to determine the tenancy on the basis of service of one months notice.

On the issues considered (set out above) the court concluded:

  1. As a matter of contractual interpretation of the tenancy agreement the tenancy could not be determined simply by serving a notice to quit giving one months notice and it could only be determined in accordance with either Clause 5 (the tenant) or Clause 6 (the landlord) or consensually by surrender.
  2. It was conceded by counsel for Ms Berrisford that on the terms of the agreement it was not capable as a matter of law of being a tenancy. This is because it was for an uncertain duration (although it was from month to month on the face of it, it was capable of subsisting indefinitely). The Supreme Court expressed a desire that Parliament consider whether the certainty of term requirement was still necessary but did not consider it was their role in this case to overturn long established authority on the issue.
  3. "There is much authority to support the proposition that, before the 1925 Act came into force, an agreement for an uncertain term was treated as a tenancy for the life of the tenant." (Para 39).
  4. As the tenancy agreement would have been a tenancy for life prior to 1926, the effect of s149(6) of the Law of Property Act 1925 is to convert it into a term of years for a term of 90 years. The LPA only recognises two types of legal estate: a fee simple and a term of years. s149 LPA converts a tenancy for life into a term of 90 years determinable after death.
  5. This issue was obiter as it was not necessary to the success of the appeal. Still, there is strong obiter (although this is not a unanimous part of the case) that in any event Ms Berrisford would have been able to enforce the contractual terms as between the parties (i.e. it would not bind their successors as it would not have created an interest in land on this argument).
Russell James
Russelljames@devonchambers.co.uk
Russell specialises in Housing, Homelessness, Property Litigation and Civil Litigation. Russell is recognised in Legal 500 for his work in Housing.

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