Phillips v Garraway

Joanne Smith, Senior Solicitor at William Sturges LLP, acted for the successful respondents in Phillips v Garraway[2026] EWCA Civ 55. In a significant decision, the Court of Appeal has clarified what amounts to “rent” for the purposes of the Housing Act 1988 – and, crucially, when a tenancy will not qualify as an assured tenancy.

The judgment brings welcome certainty for landlords and practitioners, particularly where unconventional arrangements are used in place of traditional rent.

The Background

Arthur and Janet Phillips granted a six-month tenancy of a property on their Kent estate, known as The Lodge, to Tess Garraway.

Instead of paying rent, the written agreement provided that the “rent” would be:

“A minimum of 2 days’ work on the estate, 9am–5pm, breaks to be agreed.”

Ms Garraway was also required to reimburse utilities and council tax.

A dispute arose after limited work was carried out. The landlords served notice to terminate the tenancy and later issued a notice to quit. Ms Garraway argued she occupied under an assured tenancy and was therefore entitled to statutory protection.

The case ultimately reached the Court of Appeal.

The Key Legal Question

The central issue was narrow but important:

Can unpaid services amount to “rent” under the Housing Act 1988, simply because they are capable of being given a monetary value?

At common law, rent does not have to be money. It can consist of goods or services.
However, the statutory framework governing assured tenancies operates differently.

The tenant argued that gardening services constituted “money’s worth” and therefore rent. The landlords contended that unless the parties themselves attributed a monetary value to the services, there was no “rent” for the purposes of the Act.

The Court of Appeal’s Decision

The Court dismissed the appeal.

Giving the leading judgment, Lord Justice Males held that while rent at common law may consist of services, the Housing Act 1988 adopts a more technical statutory meaning. For goods or services to qualify as rent under the Act, the parties must have expressly agreed a monetary value or a mechanism for calculating one.

It was not enough that a court could retrospectively assess the value of the gardening work. What mattered was whether the parties had done so.

Because no monetary value had been attributed to the services, this was a tenancy “under which for the time being no rent is payable.” As a result, it fell outside the assured tenancy regime.

The landlords were therefore entitled to recover possession by notice to quit, without relying on statutory grounds or the section 21 procedure.

A late attempt to characterise payments for utilities and council tax as “rent” was rejected. Those sums were excluded by statute and could not convert the arrangement into an assured tenancy.

Why This Matters

Clarity for Landlords

The decision confirms that unconventional arrangements – such as labour in lieu of rent – will not automatically attract assured tenancy protection. Unless a monetary value is expressly agreed, the tenancy may fall outside the statutory regime.

Clear Boundaries in Statutory Interpretation

The case draws a firm distinction between common law principles and the statutory framework governing assured tenancies. The Court confirmed that Parliament adopted a specific and technical meaning of “rent” in the 1988 Act.

The Importance of Careful Drafting

For both landlords and tenants, the case highlights the risks of informal or unusual letting structures. If services are intended to operate as rent within the statutory regime, they should be carefully drafted and properly valued.

In Practical Terms

If rent is expressed solely as services – and no monetary value is agreed – the tenancy may fall outside the assured tenancy framework.

For landlords, that may provide flexibility. For tenants, it may mean fewer statutory protections than anticipated.

This outcome not only vindicated our clients’ position but provides much-needed guidance where modern letting practices intersect with statutory protections. Clear drafting and early legal advice remain essential.

For further information contact Joanne Smith | Senior Solicitor | William Sturges LLP | Joanne.Smith@williamsturges.co.uk