How does an assured shorthold tenancy become a secure tenancy? By accident!

In the London Borough of Redbridge v G (Romford County Court, 5 February 2025), a series of unusual events lead to an assured shorthold tenant becoming a secure tenant.

Factual background

The Defendant entered into an assured shorthold tenancy agreement in respect of her Property with her private landlord on 24 March 2021. The Property was registered land.

In April 2023, the Claimant local authority purchased the Property with the intention to allocate it to one of their pre-localism applicants who had been on the waiting list for a considerable time. It was intended that the Property would be purchased with vacant possession. However, the previous landlord did not issue a claim for possession against the Defendant prior to the sale.

Upon purchase, the Claimant wrote to the Defendant advising that she did not have permission to occupy the Property and set up a use and occupation account while they sought possession. 

In January 2024, the Claimant served a notice to quit on the Defendant and issued a claim for possession in reliance on that notice on 2 December 2024 on the basis that the Defendant was a trespasser. The Claim was supported by the witness statement of a Senior Housing Officer with 30 years of experience, who asserted that the Property ought to have been empty upon completion of the sale, but that this was not the case, and that the court therefore ought to grant possession forthwith.

What happens to a tenancy upon sale of the property?

It is trite law that a tenancy does not simply cease upon sale of the Property. The legal basis for the same is as follows.

Section 3 of the Landlord and Tenant (Covenants) Act 1996 provides that the benefit and burden of all landlord and tenant covenants of a tenancy shall pass on an assignment of the whole or any part of the premises or of the reversion in them. Where the assignment is by the landlord under the tenancy, then as from the assignment the assignee becomes bound by the landlord covenants of the tenancy, except as specified. 

As set out at 16.010 of Woodfall on Landlord and Tenant, “in the case of a transfer of the reversion in registered land,  whether the purchaser is bound by interests of persons in occupation does not depend on notice. It depends instead on whether the relevant interest falls within para.2 of Sch.3 to the Land Registration Act 2002.”

Paragraph 2 of Schedule 3 of the Land Registration Act 2002 includes, among others, “an interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation” except as specified. 

It is therefore clear then that where an interest in land is assigned by the landlord, the new owner is bound by any existing tenancy. In respect of registered land, as in this case, this applies regardless of whether the new owner was on notice of the tenant’s occupation or not, given that her occupation would have been obvious on a reasonably careful inspection of the land at the time of disposition. In any event, it seems that the Claimant was aware of the Defendant’s occupation but was under the false impression that this would come to an end upon their purchase of the Property. Accordingly, the Defendant continued to occupy the Property under her tenancy and this was not capable of termination by way of a notice to quit.

When is a tenancy secure?

Section 79 of the Housing Act 1985 provides that “a tenancy under which a dwelling house in England is let as a separate dwelling is a secure tenancy at any time when the conditions described in section 80 and 81 as the landlord condition and the tenant condition are satisfied”.

Section 80 provides that “the landlord condition is that the interest of the landlord belongs to one of the following authorities or bodies – a local authority…”. Section 81 provides that “the tenant condition is that the tenant is an individual and occupies the dwelling-house as his only or principal home…”

In this case, both the landlord and tenant conditions were satisfied, and it would therefore appear that the Defendant now in fact had a fully secure tenancy of the Property, which of course could not be terminated by way of a notice to quit.

The first possession hearing

Prior to the hearing, the Defendant’s counsel Cara Hall prepared a skeleton argument setting out the above legal framework in detail, along with the legal framework for terminating a secure tenancy. 

Opposing counsel was quite sensible and, upon taking instructions from the housing officer, agreed to discontinue the claim, advising that to put forward a case for possession in the circumstances would be to mislead the court in breach of his professional ethics. This was sensible, as the Judge in the hearing remarked at the outset that the Defendant’s skeleton appeared to be “an accurate representation of the law”. The Judge dismissed the claim for possession and ordered the Claimant to pay the Defendant’s costs of defending.

Comment

In a rather unusual series of events, the Defendant ended up with significantly improved security of tenure. This was a silver lining in circumstances where she had been treated as a trespasser and subject to the stress of possession proceedings. It is, of course, a shame for the person who the local authority intended to rehouse there though, and an expensive mistake for the local authority.

Cara Hall acted for the Defendant, instructed by Liselle Archer at Edwards Duthie Shamash.