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Million Pound Mistake

Here at Belvoir, we pride ourselves on providing impartial advice to prospective tenants as an aw...

Here at Belvoir, we pride ourselves on providing impartial advice to prospective tenants as an award winning letting agency in Sutton Coldfield, but some tenants aren’t so lucky...

Twenty five chalet tenants of Welsh holiday park, Oxwich Leisure Park in Gower, look set to potentially pay an unbelievable price; the tenants in question signed a contract which agreed for the park fees to increase by 10% each year as an annual inflation charge, however having signed the contract in 1977 at a charge of £90, they are looking at the prospect of paying more than £1million by the end of their lease in 2073.

To make matters worse for the tenants, the High Court ruled in favour of landlady, Paddy Arnold, and against the twenty five tenants, who argued that the contracts were not common sense and would mean hugely disproportionate takings for Arnold.  The tenants further argued that the current £3,000 charges were already excessive due to the “fairly limited” services the park currently offers and to exceed this would be furthermore unreasonable.

In 1977, the 10% inflation lease increase seemed reasonable against the national 16% increase at the time, but due to significant falls in the rise of inflation, this poses a nightmare situation for any tenant.

There is however light at the end of the tunnel for the tenants of Oxwich Leisure Park in the form of their landlady.  Despite the Supreme Court stating that, “It is not the function of the court interpreting a contract to relieve a party from the consequences of imprudence or poor advice,” and the overall ruling being that the contract was “readily explicable” to a “reasonable reader”, Ms. Arnold has agreed to renegotiate terms in a way which has a regard for future price index fluctuations.

Whoever you side on in this court case, it is easy to see the pitfalls of contract legislation and stands to provide something of a stark warning to those who make contractual financial assumptions.  At Belvoir, we will aid you with any questions, misunderstandings or issues you may have with any housing or leases we provide and will be more than happy to help should a problem arise; although thankfully, issues like Ms. Arnold and her tenants’ are rather exceptional.

For expert advice about renting accommodation in Sutton Coldfield, contact one of our trusted agents on 0121 321 3388.

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