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Joshua
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Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Between October 1973 and April 1975 my Company granted six

Customer Question

Between October 1973 and April 1975 my Company granted six separate leases of residential Flats, all for terms of 99 years as from 2nd March, 1973. The initial ground rent was £30 for the first 10 years; thereafter such rent for each subsequent period of 10 years was to be varied in accordance with the Index of Retail Prices – inevitably increasing at each review.
At that time the Rent Act, 1968, was in force, so that in a purported attempt to prevent the leases from becoming protected tenancies, all leases contained the following “freeze clause” :-
“Not withstanding anything hereinbefore otherwise contained where the rent in relation to a rental period would (apart from this provision) amount to more than such sum as would by reason of such rent cause the tenancy hereby created to become a ‘protected tenancy’ within the meaning of the Rent Act 1968 or of any statutory modification or re-enactment thereof for the time being in force then the rent for such period will be one penny less than such sum as aforesaid.”
At the commencement of the leases the rent of £30 in respect of all the leases was less than two-thirds of the rateable value of the Flats but, after the first 10 year review, the Index of Retail Prices would have increased the rent to more than two-thirds of the rateable value, so the Company, for all further 10 years rental periods, has applied the freeze clause and demanded only an annual rent of one (old) penny less than two-thirds of the (old) rateable value of the Flats.
My question, therefore, is whether or not subsequent legislation has rendered the freeze clause inoperative, so that the rent could now – or could have earlier have been -increased in accordance with the Index.
I consider it arguable that the Housing Act, 1988, by abolishing the concept of market rents for all except protected tenants, has allowed rents to be increased without regard to the freeze clause as from 1988, the six leases never having become ‘protected’. Further, general rateable value assessments no longer exist, having been replaced by a banding system, so rending the freeze clause meaningless.
Am I correct and if so, please quote statutory authorities in support? Further, may the Company be able to claim up to six years’ arrears of rent or would the doctrine of estoppel apply here?
Finally, the Company has also granted other similar Leases for the same periods and rental terms but without such a freeze clause. What is the position in such cases, please?
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Josh-2010 :

Thanks for your question. Please kindly RATE my answer when you are satisfied

Josh-2010 :

Have you demanded rent for the last 6 years already please or have no demands yet been sent out?

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