Unquantified “Rent-in-Services” Means “No Rent Payable”: Excluding Assured Tenancy Status under Housing Act 1988 Sch 1 para 3

1. Introduction

Phillips & Anor v Garraway ([2026] EWCA Civ 55) concerned a recurring practical problem in the private rented sector: where occupation is granted in return for services rather than a stated money rent, does the occupier obtain the protections of an assured tenancy under the Housing Act 1988?

The landlords, Mr Arthur and Mrs Janet Phillips, granted Ms Tess Garraway a rolling six-month arrangement for a dwelling (“The Lodge”). Under the heading “Rent”, the written agreement required a “Minimum of 2 days work on the estate” (accepted as two days per week, later performed as four half-days). No monetary value was attributed to the work. When the landlords served notice and then a notice to quit, possession proceedings followed on the basis that the arrangement was a common law tenancy outside the 1988 Act.

The key legal issue was whether a tenancy requiring unvalued services is a tenancy “under which for the time being no rent is payable” within Schedule 1 paragraph 3 of the 1988 Act—thereby excluding assured tenancy status (and with it the statutory security of tenure regime).

2. Summary of the Judgment

The Court of Appeal (Males LJ giving the leading judgment; Falk LJ and Moylan LJ concurring) dismissed the appeal.

The Court held that, for the purposes of the Housing Act 1988, “rent” has the same established meaning it had under the Rent Acts: rent must be payable in money, or (if in goods/services) the parties must have attributed a monetary value to it. It is not enough that a court could later assess a value.

Because Ms Garraway’s services had no agreed monetary value (and no agreed mechanism for quantifying it), the tenancy was one “under which … no rent is payable” within Schedule 1 paragraph 3, and therefore not an assured tenancy. The landlords were entitled to possession on the basis of a valid notice to quit, without needing to rely on Schedule 2 grounds or section 21.

3. Analysis

3.1 Precedents Cited

(a) Rent “in kind” at common law and under the Law of Property Act 1925

  • Woodfall, Landlord and Tenant (quoted): used to confirm the common law position that rent may consist of goods or services without needing a monetary figure. This formed the starting point but not the endpoint for statutory interpretation.
  • Law of Property Act 1925, section 205(1)(xxiii): defines rent to include payments in “money or money’s worth”. The tenant relied on this to argue that the 1988 Act should similarly encompass unquantified services. The Court treated it as illustrating that different statutes may adopt different concepts of “rent”, not as controlling the 1988 Act.

(b) The Rent Acts line: “rent” requires monetary quantification by the parties

  • Hornsby v Maynard [1925] 1 KB 514: held that, under the rent restriction legislation, “rent” meant money rent only; non-monetary benefits (even if valuable and assessable) did not count. The Court of Appeal treated the critical feature as the statutory scheme’s dependence on quantified sums.
  • Montagu v Browning [1954] 1 WLR 1039: Lord Justice Denning’s analysis was central to the modern formulation: goods/services may count as rent under the Rent Acts only where the parties have “by agreement quantified the value in terms of money”. Importantly, the present Court relied on Montagu as providing no support for “capable of valuation is enough”.
  • Barnes v Barratt [1970] 2 QB 657: affirmed and rationalised Hornsby; Sachs LJ emphasised both (i) legislative continuity (Parliament repeatedly reused the same language without redefining “rent”), and (ii) the “workability” point—rent control and related machinery requires quantified sums. The present Court treated Barnes as binding authority on the statutory meaning of “no rent is payable” where there is no agreed quantification.
  • Bostock v Bryant (1990) 22 HLR 449: applied Barnes v Barratt, reinforcing that the principle is settled and binding.

(c) Modern statutory interpretation and legislative context

  • R (Quintavalle) v Secretary of State for Health [2003] UKHL 13, [2003] 2 AC 687 and R (O) v Secretary of State for the Home Department [2022] UKSC 3, [2023] AC 255: cited for the orthodox approach—construe statutory words in context, purpose, and historical setting.
  • Barras v Aberdeen Steam Trawling and Fishing Co Ltd [1933] AC 402: the “Barras principle” (presumption that Parliament adopts an established judicial meaning when using the same words in a similar context). This was a key interpretive lever in importing the Rent Acts meaning of “rent” into the 1988 Act.
  • McDonald v McDonald [2016] UKSC 28, [2017] AC 273: used to situate the Housing Act 1988 historically (a policy shift away from Rent Act protection to stimulate private renting). This supported reading the 1988 Act as a consciously redesigned scheme, but not one that silently expands “rent” beyond the Rent Acts approach.
  • Tennant v Smith [1892] AC 150 (and dictionary references noted by Falk LJ): cited to show “payment” can sometimes be broader than cash. Falk LJ found valuation in principle possible, but agreed legislative intent was decisive.

(d) Charges and “rent”: a rejected late argument

  • Sidney Trading Co Ltd v Finsbury Borough Council [1952] 1 All ER 460: historically treated rates paid to the landlord as part of “rent” for Rent Acts purposes by asking for the total monetary payment. However, the Court held that, for the 1988 Act, Schedule 1 paragraph 2(2) now generally excludes sums expressed to be for rates/council tax/services/etc. from “rent”, and refused permission to run the point on the facts.

3.2 Legal Reasoning

  1. Identify the statutory gatekeeper: assured tenancy status is excluded if the tenancy is one “under which … no rent is payable” (Housing Act 1988, Sch 1 para 3).
  2. Reject “natural meaning” in isolation: although “rent” can mean money’s worth at common law and under other statutes, the Court emphasised that meaning depends on this statutory context.
  3. Apply the Barras principle: Parliament used in the 1988 Act the same exclusionary language as in the Rent Act 1977 (“no rent is payable”), against the backdrop of settled case law (Hornsby; Barnes; Bostock) requiring party-agreed monetary quantification. Absent any redefinition, Parliament is taken to have intended the same meaning.
  4. System coherence/workability: multiple 1988 Act mechanisms assume rent is a money amount (e.g. market rent determinations, comparisons, repayment of advance rent). This reinforced that “rent” must be monetised, not left as unvalued services.
  5. Deliberate legislative choice shown by parallel legislation: section 3A inserted into the Protection from Eviction Act 1977 at the same time extends that Act’s protection to tenancies granted “otherwise than for money or money’s worth”. Parliament therefore knew how to capture “money’s worth” arrangements expressly, but did not do so for assured tenancies in the 1988 Act.
  6. Valuation capability is irrelevant: the tenant’s argument (“a court can value the services”) was rejected as the very point Hornsby and Barnes had already foreclosed; what matters is agreement on a monetary value or a mechanism to quantify it.
  7. Policy concern (evasion/exploitation) cannot override text and history: the Court noted that Hornsby itself recognised evasion risks, yet Parliament retained the same structure in later statutes and in the 1988 Act.

Falk LJ agreed, while expressing a limited reservation: she was “somewhat less convinced” that including unquantified money’s worth would be unworkable in principle, but found the indicators of legislative intention (especially the repeated language and the Protection from Eviction Act 1977 comparison) decisive.

3.3 Impact

(a) Practical classification: “work for accommodation” is unlikely to be assured unless monetised

The decision establishes a clear rule for Housing Act 1988 purposes: an obligation to provide services, standing alone and without agreed monetary value, does not prevent the tenancy from being treated as one where “no rent is payable”. Such arrangements are therefore outside the assured tenancy regime.

(b) Drafting consequences

  • Landlords and tenants who intend an assured tenancy cannot safely rely on “services as rent” unless they state a monetary rent or expressly quantify the services in money terms (or provide an agreed quantification mechanism).
  • Conversely, parties seeking to avoid assured status may be incentivised to keep “rent” unquantified—an evasion concern the Court acknowledged but treated as legislative.

(c) Litigation posture and possession routes

If an arrangement falls outside the 1988 Act, landlords may proceed via common law notice to quit (subject to other protections), rather than the more structured Housing Act regime (Schedule 2 grounds / section 21 requirements).

(d) Residual statutory protection remains significant

The Court’s reliance on section 3A of the Protection from Eviction Act 1977 underscores that even where assured tenancy status is absent, occupiers may still benefit from important anti-self-help eviction protections requiring court process.

(e) Future law and reform pressure

The judgment effectively frames any expansion of assured tenancy coverage for “rent-in-services” as a matter for Parliamentary amendment, not judicial interpretation—especially relevant in a landscape where section 21 is described as “soon to be abolished”.

4. Complex Concepts Simplified

Assured tenancy (Housing Act 1988)
A private residential tenancy with statutory security of tenure. The landlord generally needs a statutory ground (Schedule 2), or must follow the statutory “no-fault” route (historically section 21, referenced as due to be abolished).
Schedule 1 paragraph 3 (“no rent payable”)
A gateway exclusion: if, for the time being, no rent is payable under the tenancy, it cannot be an assured tenancy. This case clarifies that “rent” here means money rent or money-quantified rent-in-kind.
Rent “in kind” / “in services”
Non-cash consideration for occupation (e.g., caretaking, cleaning, gardening). At common law it can be rent, but under the Housing Act 1988 it counts only if the parties have agreed its value in money terms.
The Barras principle
Where Parliament uses the same words in a similar statutory context, it is presumed to adopt the established judicial meaning of those words unless it clearly indicates otherwise.
Notice to quit
A common law notice terminating certain tenancies outside the assured tenancy regime. If valid, it enables a landlord to seek possession without needing Housing Act grounds (though eviction still generally requires court proceedings).
Schedule 1 paragraph 2(2): service charges and “rent”
For Housing Act threshold/exclusion calculations, “rent” generally excludes sums expressed to be for council tax, services, repairs, etc. This curtails older “total monetary payment” approaches reflected in some Rent Acts cases.

5. Conclusion

Phillips & Anor v Garraway confirms a bright-line rule: for assured tenancy status under the Housing Act 1988, unquantified services are not “rent”. Unless the parties have agreed a monetary value (or a quantification mechanism), the tenancy is treated as one “under which … no rent is payable” and is excluded by Schedule 1 paragraph 3.

The Court reached this outcome by applying the Barras principle to the long-established Rent Acts case law (Hornsby v Maynard, Montagu v Browning, Barnes v Barratt, Bostock v Bryant), reinforced by the structure of the 1988 Act and by Parliament’s contrasting, express use of “money or money’s worth” language when amending the Protection from Eviction Act 1977.

The significance of the judgment lies in its practical guidance and its constitutional message: extending assured tenancy protections to “work-for-rent” arrangements without monetary quantification is a matter for legislation, not reinterpretation.