Cardiff Community Housing Association v Kahar [2016]:

Lease terms implied as a result of parties’ conduct

The background

The respondent tenant, Kahar, occupied the subject property in a modern residential development under a weekly tenancy arrangement which had been negotiated by the original tenant prior to assignation of the tenancy to the respondent. The document was in a standard form and provided space for specific details to be added, including a breakdown of the services to be provided by the landlord in respect of which the tenant agreed to pay, and did pay, a service charge.

The service charge could be increased or decreased by the appellant landlord on at least 4 weeks’ notice in writing to reflect changes in the cost of providing the services.

No details of the services were included in the completed agreement. After the appellant notified the respondent of an increase in service charge, the respondent brought proceedings to determine whether or not she was liable for service charge payments given the omissions in the original tenancy.

The law

At first instance, the Leasehold Valuation Tribunal held that the absence of any description of services in the tenancy resulted in the service charge becoming non-payable. In considering the parties’ conduct, the LVT concluded that, as the tenant could not identify the services for which she paid service charge, she could not be deemed to have agreed to pay for them.

The LVT commented that it was not within its jurisdiction to write the tenancy for the parties where they have omitted details themselves, and it could not be responsible for determining the services that the tenant should contribute towards.

The Housing Association landlord appealed the LVT’s decision.

The decision

The Upper Tribunal considered in particular the terms of the tenancy agreement itself. Express provisions stated that the tenant was liable for the sum of £14.60 per week in respect of service charge; although the tenancy agreement did not detail the services to be provided, it was clear to the UT that the tenant had agreed to pay a sum in respect of services, however they were defined.

In practical terms, the omission of details of the services did not create any difficulties for either party. The tenant could have requested these at any time but nevertheless, services were paid for by the tenant and supplied by the landlord throughout the tenancy period. It can be ascertained easily as to what those services were, and if the tenant needed clarification, she could have asked the landlord.

The decision of the LVT was overturned on appeal therefore, and the Upper Tribunal held that service charge was payable. During the period of the tenancy, the supply of services means that those services can be ascertained and defined, and the payment of the service charge indicates that the tenant accepted the provision made.

J B Leitch comments on the decision:

“The decision in Cardiff looks once again at interpretation of terms, and in particular reinforces our advice to carefully draft all agreements, including the most simple tenancy agreements, to ensure that no key details are omitted.

The Upper Tribunal demonstrates here that it is comfortable in implying terms where there is a precedent set by the course of conduct of the parties. Both landlords and tenants should be aware of this, ensuring that they are acting in their best interests and on the basis of defined contractual terms.”