Spielplatz Ltd v Pearson & another [2015]

Background

The claimant freeholder of a woodland naturist resort brought the case following its service of a notice to quit against its defendant tenants.

The property concerned was a single-story wooden chalet, built in the grounds of the claimant’s resort on plot 44A. The tenants were granted an annual tenancy in 1992, and they remained in occupation at first during the weekends only and subsequently, following a transfer to residential status, more permanently. Works were carried out to the chalet between 2008 and 2012.

The freeholder served a notice to quit on the tenants in September 2012; the tenants did not do so, and the freeholder brought proceedings to regain possession of the plot on the basis that the tenants enjoyed only an unprotected common law tenancy.

At first instance, the freeholder argued that it was only concerned in the land; that it had let only the land to the tenants and did not have any interest in the chalet affixed to it.

The law

Under the Housing Act 1988, to be an assured tenancy the tenancy must be ‘a tenancy under which a dwelling-house is let as a separate dwelling’. The judge held that the chalet was part and parcel of the land and must therefore belong to the claimant, be let as a dwelling and therefore be subject to an assured tenancy.

The claimant freeholder appealed the first instance’s judge’s decision, arguing that the judge had not given proper consideration to the purpose for which the chalet had been constructed and the parties’ intentions. Even if the judge was right to hold that the chalet had become part of the land let to the tenants, the tenancy agreement limited the demise to the land only and should not create a letting of ‘soil and chalet’.

Further, the freeholder argued that the judge should have held that the tenancy was excluded from being construed as an assured tenancy on the basis of the Housing Act 1988 s.1(2) and Sch 1 Pt 1 para 9 (“Tenancies Which Cannot Be Assured Tenancies”) which states:

“…a tenancy the purpose of which is to confer on the tenant the right to occupy the dwelling-house for a holiday”

The decision

The freeholder’s appeal was dismissed. The chalet did form part of the land let to the tenant and there was nothing in its construction which meant that it could not be used all year round.

Although both parties may have believed that the chalet was a separate entity capable of being sold onto other tenants, on the bare facts of the parties’ submissions the Court of Appeal could find no authoritative evidence upon which this could be relied.

The Court of Appeal dismissed the argument that the tenancy agreement had not let both ‘soil and chalet’ on the basis of a lack of evidence that this was the case, holding that the chalet had been demised under the 1992 tenancy.

Finally, no evidence was found to substantiate the claim that the chalet was let only as a holiday house. The tenants were entitled to occupy the property all year round.

JB Leitch’s Rob Denman comments on the judgement:

“This case highlights the interesting distinction made by the Courts when interpreting the Housing Act in order to determine what is and isn’t a ‘separate dwelling’. The nature of the property in Spielplatz would suggest that the chalet could legitimately be viewed as a holiday letting but the Courts clearly saw it differently on the basis of the facts of the case. Freeholders need to consider fully the long-term potential usages of properties such as this, ensuring that tenancy demise wording is watertight and accurately reflects both parties’ intentions.”