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What the payment of rent covers

This content applies to England

What the payment of rent can cover.

Definition

Although rent is not defined in any of the Rent or Housing Acts, rent has been held in the courts to be a regular, contractual payment, which a landlord is entitled to receive from a tenant in return for the tenant's use and occupation of premises.[1]

Tenancy agreement

When the tenancy agreement provides for the payment of additional charges, such as water charges, service charges and council tax, as part of the rent or in consideration for use of the property, then such charges can be classified as rent.[2] In some agreements the 'basic' rent may be described as the net rent and the full payment including other charges as the gross rent.

Where the tenancy agreement makes no express provision for the payment of additional charges as rent (or for use of the property) the tenant may be able to argue that they are not rent.[3]

Service charges

Where the rent contains an element for the payment of service charges a tenant can challenge the reasonableness of the level of the service charge on application to First-tier Tribunal (Property Chamber).[4] For more information see the pages Statutory control of service charges and Challenging service charges.

Water charges

A tenancy agreement may set out that the tenant pays water charges to the landlord as part of the rent. Many local authority and private registered providers of social housing landlords enter into an agreement with a water company to collect the water and sewage charges from their tenants (who don't have water meters).

However, under the water resale rules [5] it is unlawful for a landlord to make a profit from the resale of water. The High Court held that the amounts that a local authority had charged its tenants for the supply of water exceeded the maximum charge permissible and that the tenants were entitled to a refund.[6] Additionally, tenants in such a situation could have a defence to a possession claim brought on the ground of rent arrears.

On the basis of the differently worded commercial agreement between the local authority/landlord and water company, the courts distinguished other cases from the decision above and held that the local authority/landlord was merely an agent of the water utility company and had not breached the terms of water resale rules.[7]

[1] Unified Scientific Holdings Ltd v Burnley [1978] AC 904.

[2] for eg see Escalus Properties Ltd v Robinson [1996]; Sidney Trading Co v Finsbury Corp [1952] 1 All ER 460.

[3] Dudley MBC v Bailey (1990) 22 HLR 424.

[4] eg see Cardiff Community Housing Association Ltd v Kahar  [2016] UKUT 279 (LC).

[5] see Water Resale Order 2001 and Water Resale Order 2006, made under s.150 Water Industry Act 1991.

[6] Jones v Southwark LBC [2016] EWHC 457 (Ch); Royal Borough of Kingston-Upon-Thames v Moss [2019] EWHC 3261 (Ch).

[7] Rochdale Boroughwide Housing Ltd v Izevbigie (2017) EWHC 790 (CH); Rochdale BC v Dixon [2011] EWCA Civ 1173; Lambeth LBC v Thomas(1997) 30 HLR 89.

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