Rent Review Arbitrations: A trap for the unwary
Section 12(4) AHA 1986
Following the application to the President, the Arbitrator was duly appointed on 12 July 2012, but that is not a determination of jurisdiction by the RICS, merely an administrative function.
The Arbitrator decided that, for the purposes of complying with the provisions of Section 12(3), the demand for arbitration made on 5 April 2012 was a day late and that the "next termination date" for the purposes of the Section was 5 April 2012 and that the demand for arbitration needed to be made before that date, namely it needed to be made on 4 April 2012 at the latest.
In the appeal, the Landlord placed reliance upon the Court of Appeal decision in Yeandle v Reigate Borough Council , where Lord Justice Leggatt explained that a notice to quit a tenancy ending at midnight between 28 and 29 September can specify either of those two dates as the date for delivery of possession because "the tenancy would be construed as ending on the last moment of the 28th or the first moment of the 29th. In other words, because they both identify the end of the relevant period of 12 months, they mean the same as each other in this context".
In the appeal, on behalf of the Tenant, reliance was placed on the case of Thompson v Bradley (2006), a decision in the Birmingham County Court, albeit allocated to the Chancery Business List. The relevant facts in that case were:-
(1) The lease commenced on 29 September 1996 and was held by the tenant from year to year, until determined at the end of any year of the tenancy by not less than twelve calendar months notice in writing.
(2) The Judge determined that "the start date of any one year's tenancy is the 29th September and the last of it is the 28th September".
(3) The Judge observed that the "termination date", for the purposes of interpreting the notice under consideration in that case, meant 28th September 2005. He found that "Section 12 of the 1986 Act required the application for the appointment of the Arbitrator to have been made before the termination date, namely, at the latest, on the 27th September 2005".
Applying those facts and analysis to the case under appeal, it was submitted on behalf of the Tenant that:-
· The Tenancy Agreement commenced on 6 April 1999.
· The "start date" was therefore 6 April. The "last date" was therefore 5 April
· The termination date, adopting the position in Thompson v Bradley, would be 5 April and the last day for making the application pursuant to Section 12(3) would be the previous day, namely 4 April.
After the legal arguments were exchanged, the Landlord conceded. Whatever the outcome of the appeal might have been, had it proceeded to a Hearing, the one thing which is absolutely clear is that anybody seeking to activate a rent review should not leave it to the last moment.