What is the appropriate level of damages when a property is unfit for human habitation?

In Dezitter v Hammersmith and Fulham Homes (Central London County Court, 7 November 2023), the court considered the appropriate level of damages to award where a property is unfit for human habitation.

The Homes (Fitness for Human Habitation) Act 2018

The Homes (Fitness for Human Habitation) Act 2018 amended the Landlord and Tenant Act 1985 to add sections 9A-9C. For a property to be unfit for human habitation, the property must be so far defective having regard to the matters set out in section 10 of the Landlord and Tenant Act 1985 and the hazards prescribed in the Housing Health and Safety (England) Regulations 2005 that it is not reasonable suitable for occupation and thus unfit for human habitation. 

Pursuant to section 9B(4) of the Landlord and Tenant Act 1985, the covenant that a dwelling is fit for human habitation was implied into all tenancies that were in existence as of 20 March 2020. 

It only applies from that date, and so we have now reached the point where a pleading that a property is and has been unfit for human habitation since that date would be a pleading that could attract extensive damages. The question since its implementation however, has been what level of damages should be awarded where a property is unfit for human habitation?

Damages for disrepair

There are three main ways of assessing damages in disrepair claims:

1. A global award assessed by the court as representing an appropriate award to compensate the tenant for the discomfort, inconvenience and distress caused by the disrepair; 
2. A percentage deduction from the notional rental value; or
3. A combination of the two.

The usual method opted for by judges is to award a percentage of the rent for diminution in value of the property as a result of the disrepair. The judge will consider case reports, for example those in Legal Action, and award a percentage based on cases where the tenant was suffering from similar disrepair.

However, there has not yet been much authority on what the appropriate percentage is where a property has been found to be unfit for human habitation pursuant to section 9A of the Landlord and Tenant Act 1985, and cases where this claim has been pleaded are only just reaching the courts. 

The percentage deduction was however recently considered in the County Court at Central London in the case of Dezitter v Hammersmith and Fulham Homes.

The Facts

Ms Dezitter has been a secure tenant of Hammersmith since May 2010, and brought a claim against them for disrepair, which included cracks to the walls and ceilings, ill-fitting and drafty doors and windows, damp and mould, lights hanging from and watermarks to the ceiling and a boiler which frequently lost pressure. 

There was evidence of Miss Dezitter complaining about the disrepair since the day she moved in. Hammersmith did not raise a limitation defence and therefore it was open to the court to consider the disrepair from the commencement of the tenancy up to the date of the hearing. 

The disrepair fell into three broad periods:

1. 14 June 2010 to 24 December 2013 when the condition of the property further deteriorated as a result of a leak to the roof.
2. 24 December 2013 when the roof leaked to 20 March 2020 when the fitness for human habitation covenant was implied into the tenancy.
3. From 20 March 2020 – 7 November: this is the date from which the Homes (Fitness for Human Habitation) Act 2018 applied to all tenancies in existence. There was a report prepared by a single joint expert which had found the property unfit for human habitation since that time.

Hammersmith did not attend the trial, nor file a skeleton argument, witness statement or any evidence. As a result, DDJ Harris struck out their defence and entered judgment for Miss Dezitter. The only issue, therefore, was the remedy for disrepair. 

It was submitted, and the judge accepted, that damages should be based on a percentage deduction for the three broad periods of disrepair. 

For the first period, DDJ Harris considered the appropriate damages to be 35% of the rent, amounting to £8,000 when a slight reduction was applied given that the earlier rent due was unknown but would have likely been lower.

For the second period, DDJ Harris considered the appropriate level of damages to be 40% of the rent, amounting to £16,200 when the same reduction was applied.

For the third period, where the property had been found to be unfit for human habitation, DDJ Harris considered the appropriate level of damages to be 100% of the rent, given that the property was found to be unfit for human habitation.  She considered that this was a binary decision: either a property was fit for human habitation or it was not, and where it was not, it cannot be said that the tenant has derived any value from the tenancy for this period. Damages of £24,786.82 were awarded for this period. 

Therefore, damages of £48,786.32 were awarded, plus a 10% uplift in line with Simmons v Castle, providing a total of £53,664.95.  

DDJ Harris also awarded special damages of £1000, and ordered specific performance requiring Hammersmith to complete the outstanding repairs within 70 days as recommended by the single joint expert in his report.  The judge also ordered Hammersmith to pay the Defendant’s costs.

Comment

There is therefore a good case for arguing that the appropriate reduction to the notional rent when a property has been found to be unfit for human habitation is 100% of the rent, since no value can be derived from a property which is not fit for a human to live in.

This case also serves as a reminder that, although usually a claim for disrepair has a limitation period of 6 years, a limitation defence must be pleaded in order to operate: it is expressly not a jurisdictional matter. As stated by Lord Griffiths in Ketteman v Hansel Properties Ltd [1987] AC 189 (HL) at page 219:

“A defence of limitation permits a defendant to raise a procedural bar which prevents the plaintiff from pursuing the action against him. It has nothing to do with the merits of the claim which may all lie with the plaintiff; but as a matter of public policy Parliament has provided that a defendant should have the opportunity to avoid meeting a stale claim. The choice lies with the defendant and if he wishes to avail himself of the statutory defence it must be pleaded…” 

Those acting for claimants in disrepair claims should therefore ensure that they are not time-limiting their client’s claims: this is for the landlord to raise. 

Sarah Steinhardt instructed by Hodge Jones & Allen acted for the Claimant.