Whether a tenancy was “commercial” for the purposes of calculating the housing costs element in a Universal Credit claim.
DB v The Secretary of State for Work and Pensions
Decision Date: 18 October 2025
Issue: Whether a tenancy was “commercial” for the purposes of calculating the housing costs element in a Universal Credit claim.
Key Legal Question
The Tribunal considered how to assess whether a tenancy is commercial. The central issue was whether this should be based on:
· The actual agreement between the landlord and tenant, or
· What a hypothetical “notional commercial landlord” would do in similar circumstances.
Tribunal’s Findings
The Tribunal ruled that the specific agreement between the parties should be the basis for determining whether the tenancy is commercial. It rejected the approach of using a notional landlord’s perspective, emphasizing that real-world arrangements and intentions of the parties are more relevant.
Implications.
This decision provides guidance for future cases involving Universal Credit housing costs, particularly in disputes over whether a tenancy qualifies as commercial. It reinforces the importance of examining actual contractual terms and conduct, rather than relying on abstract or theoretical standards.