Renters lose $400k reno gamble
A BRITISH couple who spent more than $400,000 renovating a country cottage rented under a long-term lease will be evicted after losing a battle in the High Court to stay on.
Stephen Smyth-Tyrrell and his wife Beaujolois, from Cornwall in the southwest of England, were ordered out of the cottage in 2014 by the building's owner, farmer William Bowden.
The couple, who live about 5km away, originally came to an agreement with Mr Bowden's father in 1993 to restore and transform the run-down shell and its barn, known as Mellinzeath, into holiday rentals.
"I imagine, indeed understand that you and your sons would be unwilling to sell the property," Mr Smyth-Tyrrell wrote in his original proposal. "I would like to suggest that I take a long lease of the property, over a timescale which would enable this to go ahead, and then have a sufficient period for renting out of the property to give me a return once the property were renovated."
They signed a 15-year lease paying £400 ($710) per year, and in 2011 continued on under a yearly lease at an increased rent of £1000 ($1800). Over that time, they poured £230,000 ($410,000) of their own money into the place, increasing the property's value to £375,000 ($666,000) from what would be £190,000 ($337,000) today in its unconverted state.
Following floods in 2012, they remade the access road, dredged the millpond, reordered and banked the stream to alter its course, conducted excavation and levelling of the land, as well as creating a parking and turning space outside the property.
Despite despite Mr Bowden's wife Angela's belief that the property had made "an awful lot of money" from short-term letting over the years, at the time they received a notice to quit in 2014, the couple claimed they had still not recouped their expenditure from the renovations.
"Although me and my wife are the claimants in this claim, we were forced to issue these proceedings because, out of the blue, [Mr Bowden] served us with notices to quit, with complete disregard to what was clearly a common understanding between us that a) one day my wife and I (or alternatively my son) would buy [the property]; and b) in the meantime, we could continue as tenants indefinitely," Mr Smyth-Tyrrell said in his witness statement.
In ruling against the Smyth-Tyrrells, High Court Judge Paul Matthews found there was no such "common understanding", that there had been no "promise or assurance" from either Mr Bowden or his father beyond the original agreement, and any expenditure was "at their own risk".
"What has happened is that the first claimant has convinced himself that the claimants would be able to stay in the property beyond the initial 15 years of tenancy, and ultimately persuade the defendant and his family to sell the property to them for a price at which they wished to buy," he said.
"The works done by the claimants were all within the scope of the original purpose of renovating the property and letting it to holiday-makers over a 15-year term. In my judgment, there is nothing that would indicate to a reasonable man that either the defendant or his father was promising any more than that.
"The claimants were under no duty - as everyone was clear - to do anything at all. They could have sat on the property for 15 years and done nothing at all. It was up to them whether and how they renovated the property."
Judge Matthews further found that the couple had "played a long game".
"Almost the first things the first claimant did in his offer letter of 4 November, 1993 were (i) to express an interest in restoring the house and barn, whilst (ii) acknowledging the defendant's family's unwillingness to sell the property," he said.
"I find that the claimants here played a long game to try and get the ownership of the land from their neighbour without letting on that this was what they were trying to do. In the meantime, they thought they could recoup their expenditure - and, indeed, make a profit - from the refurbishment of the property and then letting it for holiday lets.
"If it has not succeeded, it is because it was a speculation which could have gone either way but which in the event has not proved as profitable as hoped.
"If the claimants had made a fortune, recouping their expenditure many times over, the defendant could not have complained. The claimants have had what they bargained for, and indeed more. Enough is enough."