A COUPLE were ordered to give a tenant cheap rent for LIFE after a century-old legal loophole was used against them.

Landlords David and Sheila Harding were left stunned by the ruling after going to court to try to evict neighbour Colin Gregory in Peacehaven, East Sussex.

Sheila Harding and her husband David have fallen victim to a legal loophole Credit: SWNS:South West News Service

Colin Gregory has refused to leave the £310,000 house he was been renting from friends since 2001

They wanted to sell the £310,000 house that they agreed to buy from the former antiques dealer in 2001 when he was struggling to pay his mortgage.

But their plans to fund a new life in Spain have been put on hold after a judge ruled that Colin, 68, be allowed to stay in the three-bed property with a 90-year lease — at no more than £800 a month.

David, 58, said: "We tried to help out not only as a good neighbour and landlord but my wife and I considered Colin as a good friend.

"To me he is nothing but a squatter living in my house.

"We own it, we pay the mortgage on it, we bought it - but due to a nearly-100-year-old law he gets to live in it for cheap.

"We have nowhere to turn to and can't believe it has turned out like this.

The house in Peacehaven, East Sussex, which David and Sheila Harding have to rent out on the cheap for 90 years Credit: SWNS:South West News Service

"We went into court told by our solicitors that there would be no problem and walked out with him winning the case and us owning him costs.

"It's ludicrous. There is nothing more we can do.

"We want to warn other people who are thinking of entering into any kind of agreement like this.

"We did everything by the book and look where it ended up.

"The law the solicitor used nobody had every heard of but it has cost us dearly. We're stuffed."

The 1925 Property Act was cited by Colin's lawyer at Brighton County Court when the case was heard in March 2016.

A similar case from 1948 was also successfully used in his defence, resulting in an award of a "lifetime lease" — while the Hardings were slapped with £11,000 in court costs.

The judge said both parties had been "foolhardy in the extreme".

David Harding has slammed the court ruling as 'ludicrous' Credit: SWNS:South West News Service

The Hardings moved into Broomfield Avenue, next door to Colin in 1993 and became good friends.

The couple offered to help Colin when he confessed he was struggling to pay his mortgage and was going to have to sell up and move out.

He bought the home for £143,000 in 2001, after getting a second 'buy to rent' mortgage - and Colin didn't had to move out, happily paying £800 a month.

An official tenancy agreement was signed by all parties.

David said: "My wife and I thought it would be a good investment and it was one we were in a position to make at the time.

"I told him he could stay there for as long as feasibly possible and that as long as I could afford it, I would keep the rent at £800."

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The couple sold their home, moved to Spain in 2002 and after years of happily renting, decided to sell three years ago.

They needed to free up some cash to fund their new three-bed villa in Torremolinos and went round for a "cup of tea" to explain the situation to Mr Gregory.

Mr Harding, who has two children, claims he offered to sell the home for £60,000 UNDER the valuation of £310,000.

He said: "I wanted to give him the first option to buy and he said he would go away and have a think about it.

"It's ludicrous. I can't believe that this is how it has turned out. We are trapped."

The Hardings claim they have him a year to come up with the money before explaining they had to put it on the market.

They accepted an offer from a buyer who was willing to pay around £240,000 for the home - AND keep Mr Gregory as a tenant.

But the buyer said he needed £1,200 a month in rent to help pay the mortgage - and Mr Harding said Mr Gregory objected to the proposed rise in rent, he claims.

David says he has been left 'trapped' by the legal loophole Credit: SWNS:South West News Service

The case went to Brighton County Court in March 2016.

Mr Gregory claimed in court they had an oral agreement he could "continue to live there as long as he wanted as a fixed rent of £800 a month".

The court heard him claim he sold the house to the Hardings 12 years earlier for a REDUCED price - only in return for being able to rent it for as long as he wanted.

The claim - not mentioned in the tenancy agreement - was strongly disputed by the Hardings.

But then Mr Gregory's solicitor produced two laws - from 1925 and 1948 - which the judge adjourned the hearing to consider.

Mr Gregory says he had an oral agreement with the couple that he could stay there 'as long as he wanted'

He cited a Bannister v Bannister 1948 - where a woman was given the right to live rent free for life in a cottage she sold to her brother for under market value.

The judge decided the cases were similar, and he was given £800 a month rent "for life" - which due to a 1925 law - the Property Act - equates to 90 YEARS.

Not only did he dismiss the Harding's case - but he ordered Mr Gregory should be given cheap rent in the house for 90 years.

He also ordered them to pay his costs - of £11,000.

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