Social Landlord Cannot Vary Tenancy Unilaterally.

A judge has ruled that a social landlord does not have the right to change a tenancy agreement, other than to make a rent change, without the consent of the tenant. Any change in an agreement must be in writing and signed by both parties.

In the case in point, the social landlord was the Peabody Trust, which sought a ruling against one of its tenants, Michael Reeve, who represented some 10,000 other tenants.

Registered social landlords, such as the Peabody Trust, ceased to enjoy the right to vary tenancy agreements following the introduction of the 1988 Housing Act. This is in contrast to local authorities, which retained such rights conferred by the 1985 Housing Act.

The judge did not accept the argument that it was impossible to manage such a large number of tenants without a method of unilaterally altering the terms of their tenancy agreements and concluded that the written agreement of each tenant was required.

He further stated that even if the standard tenancy agreement did allow a right to change the terms, any such change would not be binding as the Unfair Terms in Consumer Contracts Regulations apply. This is because a term allowing the landlord to change the agreement unilaterally would not have been individually negotiated and would therefore be considered to be in bad faith. In effect, it would be legally unfair.

Landlords should take care when entering into agreements with their tenants and should seek advice on each individual contract. Relying on standard-form agreements could be a recipe for disaster.

Partner Note
Governors of the Peabody Trust v Reeve, Times Law Report, June 9, 2008. See http://business.timesonline.co.uk/tol/business/law/reports/article4092865.ece.

Telephone: +44 (0) 1753 486 777 (Slough Office)
Telephone: +44 (0) 1189 596031 (Reading Office)