The Upper Tribunal's decision in Wallace v Hutchby and Collumbell Ltd [2025] UKUT 179 (LC) is a useful reminder of the limits of the First-Tier Tribunal's (FTT's) jurisdiction in residential rent increase disputes.
The case involved an appeal against the decision of the FTT made on 23 January 2025 following Mr Wallace's challenge of a residential rent increase notice.
No written tenancy agreement existed between the parties and the rent remained unchanged since 1999. The landlord attempted to increase the rent from £100 a week to £156 a week.
Section 13(2) of the Housing Act 1988, allows a landlord to increase the rent by giving notice to the tenant, which must be in the prescribed form stipulated under this provision. The rent increase will take effect on the date specified in the notice unless the tenant refers the matter to the FTT.
Mr Wallace argued that he had entered into a verbal agreement with Mr Hutchby, a former director of the landlord, who had since passed away, that any rent would be fixed at £100 per week. He consistently paid this amount since 1999. No evidence was provided by the landlord to refute this claim.
The FTT rejected Mr Wallace's argument and concluded that there was insufficient evidence to confirm the parties intended for the rent to be fixed for the duration of the tenancy agreement. It proceeded to determine the rent which it considered would have been agreed in the open market and was satisfied that £156 per week was reasonable.
Mr Wallace appealed this decision, and the Upper Tribunal (UT) allowed Mr Wallace's appeal.
The UT disagreed with the FTT's assertion that there "was no evidence whatsoever" of an agreement that the rent would be fixed, noting that Mr Wallace's own evidence, although limited, was clear on what was agreed.
The UT criticised the FTT and noted that it "embarked on an irrelevant digression" by attempting to decipher what was in the minds of the parties at the outset of the agreement rather than making a finding of fact about what was agreed between the parties. The UT therefore allowed the appeal and set aside the FTT's decision that there was no agreement to fix the rent.
However, instead of remitting the matter back to the FTT, the UT considered that the question of whether the parties agreed in 1999 that the rent would be fixed or whether the terms of the agreement could be varied fell outside the jurisdiction of the FTT and would need to be determined by a Court. Mr Wallace was therefore left with a pyrrhic victory as the reviewed rent itself was not the subject of the appeal and so in order to avoid liability for the increased rent he would need to pursue his argument in the Courts.
The case provides a useful reminder that only matters falling strictly within the statutory jurisdiction of the FTT should be raised in residential rent increase disputes. Issues such as these will become increasingly important once the Renters Rights Bill becomes law, as landlords will only be able to increase the rent by serving a section 13 notice and it is widely expected that there will be a very significant increase in the number of residential rent increase disputes coming before the First-tier Tribunal.
