Landlords have been warned not to accept services in lieu of rent to get round the Renters’ Rights Act after the Court of Appeal dismissed a tenant’s claim that a possession claim was invalid as she had worked on her landlords’ estate.

Giles Peaker, partner at Anthony Gold Solicitors (pictured), explains in his blog post that the landlords, Mr & Mrs Phillips, had granted Ms Garraway a six-month tenancy of The Lodge, in Hildenborough, near Tonbridge on a larger estate. Under ‘rent’, the agreement said: ‘Minimum of two days’ work on the estate with hours from 9am to 5pm. Breaks to be agreed.’ She also had to re-imburse the landlords for water, electricity, council tax and heating oil while working on the estate pruning and weeding neglected land.

After six months, the landlords told her they required vacant possession, and, when she didn’t leave, served notice to quit. Their tenant stayed, taking the view that the notice was invalid, so they filed a possession claim and order on the basis that the tenancy was not an assured tenancy as it was a tenancy for which ‘no rent was payable’ under the Housing Act 1988, so the NTQ was valid. This was upheld on appeal.

Determine

The Court of Appeal then had to determine whether ‘a tenancy which requires the tenant to provide services to which no monetary value is expressly attributed is a tenancy under which no rent is payable within the meaning of the Housing Act 1988’. It dismissed the appeal.

Peaker says the position in common law was that services could amount to rent, however the court ruled that a definition of rent that included services would not make broader sense within the Housing Act 1988.

He explains: “More generally, numerous provisions of the 1988 Act refer to rent being ‘paid’ or ‘payable’, or to ‘the amount of the rent’, while the provisions which limit the scope of the Act to tenancies where the rent is between £250 and £100,000 strongly suggest that rent must be quantified in monetary terms.”

Provision

He adds that provision of services of a specified or agreed value may amount to rent, as there would be a pecuniary value given, but there was no such value ascribed or agreed to this tenant’s services.

Peaker also warns: “Any private landlords who might think this is a splendid way to get out of the Renters’ Rights Act 2025 and head off to re-invent feudalism…it is probably not a good idea to try this, even if they can find tenants with the time, energy or willingness to provide services instead of rent.

“HMRC may well be interested in what is effectively an employment relationship, and considerably less satisfied with ‘oh we didn’t put a figure on it’ than the Housing Act 1988.”

‍