This case concerned whether a fee payable by a tenant for assigning the lease involved the provision of “credit” for the purposes of the Consumer Credit Act 1974 (CCA).

Helical (Bramshott Place) Ltd (the ‘Landlord’) developed a retirement village.  It granted long leases to retired persons who wished to live at the development.  There were four married couples who had paid premiums for the leases (and two of those couples had later assigned their leases to others).  Proceedings were issued by those tenants (collectively, the ‘Tenants’), claiming terms in the leases were unfair under the Unfair Terms in Consumer Contracts Regulations 1999.

Further proceedings were later issued by the Tenants alleging that the fee payable to assign the leases to third parties by the Tenants (the Transfer Fee) involved the provision of “credit” within section 9(1) of the CCA.  If this was right, then:

  • The Landlord did not have a consumer credit licence from the Office of Fair Trading at the time of entering into the Leases, meaning they would be unenforceable under section 40 of the CCA.
  • The leases would be regulated consumer credit agreements (as defined by section 8(1) of the CCA) and, because they did not comply with the form and content requirements of the Consumer Credit (Agreements) Regulations 1983, they were unenforceable without the Court’s permission.

The Landlord argued that no “credit” was provided and the claims under the CCA should be dismissed.

There was no obligation on the Tenants to pay the Transfer Fee.  There was no deferment of the purchase price (that is, the premium payable under each of the Leases).  There was no obligation to assign the lease on any of the Tenants, and no deferment of the requirements on the buyer to pay the Transfer Fee. 

The High Court ruled that because there was no deferment of the premium of any other amount payable under the leases, there was no “credit.”  The Court therefore granted summary judgment in the Landlord’s favour and dismissed the claims under the CCA.