Hospital Charity Can’t Evict Overstaying Tenants
In a case of interest to landlords, tenants and charities, the High Court has ruled that two elderly flat dwellers who remained in occupation long after the expiry of their leases enjoy the full protection afforded to regulated tenants by the Rent Act 1977.
The case concerned a hospital charity that owned the freehold of two Central London flats. The tenants' leases had long since expired – in one case more than 40 years ago – and the rent they paid was far below the market rent. With a view to maximising returns on its assets, the charity launched possession proceedings against them on the basis that they occupied the premises as assured shorthold tenants.
The charity argued that, when the hospital that it managed became part of the NHS, the flats and other property assets were thereafter held in trust for the Crown for the purposes of a government department. It was submitted that Crown immunity thus applied to the premises at the relevant times and that the tenancies were precluded from protection by Section 13 of the Act.
In rejecting that argument, however, the Court noted that the charity and its assets were under the control of a board of governors until the latter's abolition in 1982. Thereafter, relevant properties were held by a special health authority until 2015, when the charity again became fully independent.
The Court found that both tenancies were throughout the relevant period subject to the Act and continued to be so. In those circumstances, no possession orders could be made against the tenants in the absence of the restricted grounds specified in Section 98 of the Act. There was no suggestion that any such grounds had arisen and the tenants were thus to all intents and purposes irremovable.
The Court noted that, even had it accepted the charity's Crown immunity argument, it would not have been prepared to make possession orders in circumstances where the tenants had for many years been treated as if they had protection under the Act. Both would suffer irremediable prejudice if the charity were permitted to go back on that position.
Allowing the basis of occupation of any property to 'drift' is an unwise policy at any time. If you want to protect your position, it is essential to make sure that the appropriate legal advice is taken and implemented.
Royal Brompton and Harefield Hospitals Charity v Roupell and Another