A few bits and pieces, none of which are worth their own post, including a couple of updates on old ‘friends’.

First, as you have probably noticed, the blog has had a redesign (yes, another one). There are a couple of reasons for this: partly for a more contemporary, cleaner look, which should hopefully be more pleasant to read; and partly to make the site ‘responsive’, so that it deals with a wide variety of screen sizes. Rather than a separate version for mobiles, the same site is used, with a shortened menu bar. The sidebar and footer elements are below the main text on the mobile screen size.

Other new bits – search is accessed via the magnifying glass logo in  the top menu. When scrolling down the page, a floating ‘back to the top’ link appears at the bottom right. The only other real change is that the feeds for Supreme Court, Court of Appeal and Admin Court decisions in the footer have been combined into one (a decision that was forced upon me). And we have a whole new colour scheme, based on the brick header image. Everything else is pretty much where it was (though the side bar has switched sides).

There is a bit of an update in the saga of our favourite unlawful money lender, Mr Gopee (or Ghopee). HHJ Mackie QC has set out a summary of developments in the multiple cases, many of them applications to set aside possession orders and appeal the alleged debts to Gopee, joined together in the Mercantile Court.  It seems they are all to be transferred to the Central London County Court. It also turns out that “In one case this month a lender Dunfermline Building Society sought and obtained in an action against Ghana Commercial Finance Limited an order that Mr Gopee personally pay the costs of an application.” Oh dear…

Another interesting set up we have previously spent a little time on is Charles Henry & Co AKA Legal Action and the individual apparently at their head, Kevin Gregory.

I have received a transcript of a hearing in Gregory v City of London University and Others, dated 31 July 2014, which can be found here. It makes interesting reading, concerning as it does possible general civil restraint orders against Kevin Gregory, Charles Henry, Legal Action and maybe Augustine Housing Trust (another charity of which Kevin Gregory is a trustee, and a party in some of the cases we have previously noted). The only attendees at this hearing were Counsel for the SRA and someone apparently from Charles Henry/Legal Action/Augustine Housing Trust’s insurers on a watching brief. Gregory did not attend, nor did anyone for Charles Henry/Legal Action/Augustine Housing Trust. From the transcript there is clearly quite a back story to this hearing.

It appears that the SRA is investigating (not before time, one might think). It is also worth noting that of the three solicitors listed by the Law Society as ‘employed’ by Legal Action (and one previously listed), one is a part-time locum, Mr Perotti told the SRA he knew nothing of Charles Henry/Legal Action and hadn’t worked for them, Dr Eiland is in the USA (and no longer listed on the Law Society site), and Mr McCarthy told the SRA he ‘only attends when he is asked to, and he doesn’t know when he’ll be attending again”.

I haven’t seen a Judgment in this case yet. It may well prove to be very interesting.

The post Odds and Sods appeared first on Nearly Legal: Housing Law News and Comment.

In a case that recalls the ‘unnatural’ noises emanating from Concord, Tyne and Wear, a German Court was faced with a tricky decision in a claim for possession.

The ground given was that the tenant had installed a ‘very old’ sex swing in 2012. And, despite a clause in the tenancy agreement requiring him to be quiet between 10pm and 7am, the tenant had apparently been determined to make the most of his second-hand purchase. (Or maybe third hand. Yes, I know, it doesn’t bear thinking about.)

The landlord had received multiple complaints from neighbours of “sexual, athletic and squeaking noises” late into the night, and decided to evict.

The Court upheld the eviction, stating that late night squeaky sex swinging “would no longer correspond to normal rental use, and must therefore not be tolerated as socially acceptable”.

Ground 12? Ground 14?  In any event, the obvious lesson is to keep your swing well oiled. And if the squeaking isn’t actually the swing, plead Article 8, and the right to private, if a bit worn out, swinging.

My thanks to Jan Luba QC for the link.

The post Eviction: “Sexual, athletic and squeaking noises” appeared first on Nearly Legal: Housing Law News and Comment.

From the High Court in Northern Ireland comes a significant joined case of a mortgage lender behaving badly. Bank of Scotland, and indeed possibly the whole Lloyds group seem to have acted in this way, for which they have received an extremely severe judicial take down. The principles in this case may well have application outside Northern Ireland, and the practices identified well worth looking out for.

Bank of Scotland plc v Rea, McGeady, Laverty [2014] NIMaster 11

The borrowers’ cases were brought by NI Housing Rights Service, here is their account of the matter. These were effectively test cases to address a widespread practice.

These were variously a claim for possession by BoS, an application for stay of enforcement of a possession order, and BoS application to enforce a suspended order. In each case, there had been a sudden and unexplained increase in the monthly payments demanded by the lender, but in at least two of the cases, there had been ‘significant and regular’ monthly payments by the borrowers.

The primary issue in the hearing was:

[2]     All three cases raise a point of some importance, namely whether the lender may both (a) consolidate (or, as it is often called,capitalise) arrears of monthly instalments with the mortgage balance upon which the instalments are calculated with the effect of increasing the contractual monthly instalments to spread those arrears over the residue of the mortgage term and also (b) rely on the arrears so consolidated as outstanding arrears for the purpose of possession proceedings.
[3]     Broadly, the plaintiff insists that it can do exactly that.  It argues that the consolidated arrears were not extinguished qua arrears (which is normally what happens when arrears are consolidated) because the plaintiff took the step of consolidation unilaterally, ie without the consent of the borrower specific to that step save insomuch as consent had been given to such a step in the mortgage contract.  Indeed the plaintiff does not accept that the relevant restructuring of the mortgage accounts that I have just described is either capitalisation or consolidation, and avoids the use of either word when referring to it.   However for the purpose of this judgment (and without doing so by way of prejudgment) I will refer mostly to the practice of the plaintiff which I have just described as “unilateral consolidation”.

Meanwhile

The defendants (save Mrs Laverty who has not engaged in these proceedings) contend that, for reasons I shall explain, the practice is an unconscionable one because it prevents them from putting a proposal to repay the arrears to the court and prevents the court from exercising, or exercising properly, its discretion to defer possession. That discretion arises under the Administration of Justice Act 1970 (“the 1970 Act”) section 36 and the Administration of Justice Act 1973 (“the 1973 Act”) section 8 and, if exercised, allows the court to make either an order adjourning the proceedings or a suspended order for possession on terms which would allow the defendants to pay the arrears within a defined or ascertained time which the court regards as reasonable. The defendants also argue that the plaintiff’s practice compromises the affordability of payments towards arrears under pre-existing and future suspended orders for possession.

It is fair to say that Bank of Scotland did not come out of this well. They had indeed added arrears to the capital sum of the mortgage, in at least one case on four separate occasions from 2009. Monthly payments had risen (on a largely unchanged interest rate) by amounts between about £150 to some £500 per month

However, there had been affidavits in the proceedings from the bank’s solicitors stating that ‘at no time had capitalisation taken place’. These were apparently made because the bank continued to treat the entire arrears as being immediately due and this was what showed on the computer records. Still, the bank’s solicitors had not put the actual position to the court.

Yet, despite conceding that there had indeed been ‘informal’ or ‘automatic’ capitalisations, the bank continued to argue that it could rely on the pre- capitalisation arrears in proceedings, as if for practical purposes, payment of the arrears had not been spread over the remaining lifetime of the mortgage. The bank argued that ‘capitalisation’, or ‘consolidation’ was “restricted to that category of forbearance in which the borrower and lender agree (normally after a period of six successive payments of the contractual monthly instalments) that the outstanding arrears should be merged in future monthly instalments”.

This did not go down well.

“Consolidation is an objective fact: the arrears are either consolidated by being absorbed into increased contractual monthly instalments or they are not.”

regardless of whether this was with the agreement of the borrower or not. It was not for the bank to subjectively prescribe what constituted ‘consolidation’.

The bank relied on a provision in the mortgage conditions to allow a unilateral consolidation.

The position of the defendants is that they do not understand how these provisions could have allowed the plaintiff on the one hand to revise their monthly instalments to include contributions towards outstanding arrears and on the other hand to claim in proceedings for possession that those arrears remain overdue, given that the plaintiff itself has arranged for them to be repaid by way of monthly instalments over the remainder of the mortgage term.  The defendants also claim that these provisions permitting unilateral steps to be taken by the plaintiff constitute or include unfair terms under the Unfair Terms in Consumer Contracts Regulations 1999.

The court found that, assuming the right to unilateral consolidation could be found in the mortgage contract, that right had to be exercised reasonably.

In Unfair Contract Terms: improving standards in consumer contracts (January 2012) the FCA is generally critical of “unilateral variation” clauses. However, I consider there are sufficiently “valid” reasons for a mortgage lender to consolidate some items such as administrative fees, expenses and legal costs by spreading them over the residue of the mortgage term (rather than demanding their immediate payment or postponing any payment until redemption) to justify a provision such as that relied on by the plaintiff – in part because the word “reasonably” is used in Conditions 7.4 and 8.4 of the respective mortgage contracts to affirm that any exercise of the discretion must be reasonable.

Via Swift 1^st Limited v McCourt

the exercise of a like unilateral discretion in a mortgage contract such as that relied on in this case by the plaintiff must not be unreasonable (in the Wednesbury sense), dishonest, for an improper purpose, capricious or arbitrary, but the relevant discretion in the present cases is not in my opinion inherently unfair. That said, in the present case the bar may be said to be somewhat raised because there is an express term to the effect that the discretion shall be exercised “reasonably”.

And in these cases, Bank of Scotland had not exercised the discretion reasonably. But what should be the result?

I am satisfied that the plaintiff has acted in a manner that has been so unreasonable that no lender acting reasonably would have so acted and is therefore in breach of the mortgage contract. However on one view the capitalization per se might not have been unreasonable given that in my 21 years of specializing in mortgage possession applications I do not recall any in which capitalisation of arrears as normally understood (ie resulting in the wiping out of the current arrears) was alleged by a borrower to be unfair or unreasonable – even where the capitalisation had been automatic and without prior consultation with the borrower or might otherwise be categorized by the FCA (most correctly in my view) as being “poor” and potentially prejudicial in particular cases. In the present cases, however, the plaintiff has gone further and acted unconscionably (as I shall shortly particularise) by its remarkable insistence that for all practical purposes the payment of the arrears had not been spread over the remaining lifetime of the mortgage. Accordingly it is necessary to address the resultant prejudice by insisting that the plaintiff be held strictly to its election to consolidate the arrears. Indeed irrespective of whether the plaintiff was in breach of the mortgage contract because of the actual intention with which or manner in which it consolidated the arrears, I am satisfied on the material before me in these cases that this is a situation in which equity should treat as done that which ought to have been done (or perhaps, impute an intention to fulfill an obligation), ie it is necessary to deem the plaintiff to have elected to consolidate arrears in a manner consistent with the mortgage contract and established principles and practice and thereby to have also waived by election the right to demand immediate payment of the arrears that had been consolidated. I refer to the relevant principles as to waiver by election (which unlike promissory estoppel is always final, not suspensory, in effect) in Motor Oil (Hellas) Corinth Refineries v Shipping Corporation of India [1990] 1 Lloyds Law Reports 391.

Further, the steps taken by Bank of Scotland effectively impacted the Court’s exercise of its discretion under section 36 of the 1970 Act as revised by section 8 of the 1973 Act. These provision cannot be contracted out of, but because the bank wholly failed to distinguish between arrears that predated consolidation and those that arose on the consolidated monthly payments, it made it impossible for either the borrower or the court to know over what period a proposal for additional payments would address the arrears.

Citing Bank of Scotland Plc v Zinda [2011] EWCA Civ 706 [our note], the Court states:

Once arrears have become part of the contractual monthly instalment their payment is from that point on required not as a matter of addressing but rather as a matter of avoiding a breach of the mortgage contract. The only thing borrowers have to do to address the “arrears” is comply with the requirement to pay the new contractual monthly instalments. They should not have to face a risk of losing their home as long as they do so. If, as stressed by the English Court of Appeal in Zinda, arrears of the post-consolidation monthly instalments accrue, those arrears can be relied on in a claim for possession. However, in the present cases the evidence about arrears is as I have indicated wholly unsatisfactory and, among other things, fails to distinguish between the pre-consolidation arrears which no longer exist and the post-consolidation arrears of the revised increased monthly instalments.

And then, although this might not seem possible, Bank of Scotland made things worse for themselves. In the course of  a discussion on proleptic discharge of suspended possession orders where arrears satisfied by payment or consolidation, and in relation to the requirement that “An adjournment, suspension or postponement under section 36 must be for a defined or ascertainable period”, Bank of Scotland took the view that the requirement didn’t actually matter, their counsel arguing:

“It doesn’t matter” because there were borrowers who “came forward” and engaged with the lender and made payments and it was the lender’s unwavering policy to ensure that those borrowers had every chance to avoid repossession. Therefore in many cases, even where a suspended possession order was in place, if the borrowers were paying sums which met or exceeded the contractual monthly instalments the lender might not seek possession unless (as I understand it) the borrowers ceased to engage or to make any decent effort to resolve the situation by payment proposals or continued payments. (The onus he emphasised, was on a borrower who felt confused by the plaintiff’s information about his account and requirement to pay, or who would have difficulties paying both the consolidated monthly instalments and the additional sum required by the S.P.O, to approach the plaintiff for help.) The nub of what he is saying was that his client and indeed all the banks constituting the Lloyds Banking Group were so imbued with a culture of responsibility toward their borrowers – or at least those who were “coming forward” and making a worthy effort – that this responsibility was a key feature in all that they do with respect to mortgages.

Oh dear. The Court was not impressed, and reached for the Court of Appeal judgment in Roberts v Bank of Scotland Plc [2013] EWCA Civ 882, where the bank’s approach to a customer with modest overdraft and credit card debts was found to constitute civil and criminal harassment. Moreover the bank consistently failed to comply with “Practice Direction 2003 No 9) requiring grounding affidavits by mortgagees seeking possession to exhibit a copy of what may fairly be described as a key component of the mortgage contract, namely the offer of advance, side letter or equivalent document”.

And then there was the bank’s handling of the present defendants. For example:

Confidence in the plaintiff’s sense of responsibility toward its customers (in particular, those who “come forward”) is not helped either by the uncontradicted affidavit evidence of Ms Rea as to her own endeavours to obtain an explanation from the plaintiff’s Collections Centre of the reasons for the “migration” increase in her monthly mortgage instalment from £809.92 to £846.24 allegedly notified to her in March 2013. She asserts that she had not been notified of that change until receipt of a letter from K Stafford of the Collection Centre dated 1 May 2013 to which she was replying when she claimed in her letter of 12 May that the failure to notify her had resulted in £51.02 “arrears being added to my account”. Ms Rea received no reply and wrote again on 12 November 2013 with a reminder and a request for further particulars and explanation. The plaintiff’s Customer Services Department eventually replied by letter dated 3 December 2013 from a Ms Lucy Maller expressing sincere apologies for the delay and explaining:-

“As the Collections Department is telephony based, they do not respond to written correspondence. However, I appreciate you weren’t aware of this procedure.”

The lesson being that one really shouldn’t assert one’s caring, responsible approach in the face of a deeply sceptical court with plenty of ammunition to the contrary.

Could it get worse for Bank of Scotland? Why yes, it could. The court noted that “There would be no circumstance more relevant to the matter [suspending a possession order] than the fact that the arrears will be discharged in full without the need for any additional payment if the borrower simply complies with the contractual obligation to pay the normal contractual monthly instalment as it falls due”, but then went on to find that the bank said it was ” unable or unwilling to quantify the arrears component in monthly instalments if called upon to do so” via correspondence with the Housing Rights Service:

There is accordingly no simple and straightforward way for our client to provide a breakdown of the portion of the monthly instalment attributable to payment of arrears without a manually intensive account reconstruction on a case by case basis which would result in considerable expense and delay.

As it turns out, that is tough on the bank, because it will have to do just that, and then some (see [62] below).

I will quote the whole summary of the judgment in full below. It sets out the Court’s findings, but also what will be required of Bank of Scotland/Lloyds in any future mortgage possession cases, which is precisely the identification of consolidated arrears, that cannot be relied upon, and separately, any post consolidation arrears that could found a possession claim or warrant, as per Zinda.

While there are clearly some elements of the judgment and reasoning specific to the NI jurisdiction, as far as I can see the general principles, based on AJA and Zinda, should apply in England and Wales, if Bank of Scotland/Lloyds group have been carrying out similar ‘unilateral consolidations’ here. Many congratulations to Housing Rights Service for their dogged and successful work on these cases and pursuing the suspicious rise in monthly payments in the first place.

SUMMARY

[52] The plaintiff’s practice of restructuring mortgage accounts so that arrears of monthly instalments are included in increased monthly instalments so that they will be paid over the remainder of the mortgage term constitutes capitalisation or consolidation of such arrears. This is so whether or not the plaintiff does this with the consent of the borrower and whether or not it is done as an act of forbearance.

[53] The relevant mortgage conditions conferring on the plaintiff a unilateral discretion to restructure the mortgage and increase the monthly instalments are not unfair terms within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999. However, it is clear, by reason of the findings of Mr Justice Horner in Swift 1st Limited v McCourt, citing Paragon Finance Plc -v- Nash, that there is an implied term in such unilateral discretions that they must not be exercised unreasonably (in the “Wednesbury” meaning of that word). Moreover, the express conditions relied on by the plaintiff include the requirement that the discretion will be exercised “reasonably”.

[54] Where, as in the present cases, the plaintiff consolidates arrears unilaterally, without any attempt to secure the borrower’s agreement and without any assessment of affordability, that is extremely “poor” capitalisation according to the definition and criteria of the Financial Conduct Authority.

[55] Where, as in the present cases, the plaintiff goes further and also insists as a separate exercise on relying on the consolidated arrears to ground proceedings for possession it is acting inconsistently with primary and secondary legislation (the 1970 Act, s36, the 1973 Act s8 and, in this jurisdiction, Order 88 rule 5(3) of the Rules. Parties cannot in a mortgage agreement contract out of the possible exercise of the court’s statutory discretion to defer possession under section 36 as revised by section 8: Northern Bank Limited v Jeffers, per Mr Justice Girvan.

[56] It follows that in its unilateral consolidation the plaintiff is also in breach of the established principle that arrears of instalments are “wiped-out” to the extent that they have been consolidated: a principle at the heart of a decision described as one of “great practical significance” in the recent judgment of the Court of Appeal of England and Wales in Bank of Scotland Plc v Zinda. As I understand the underlying rationale for that principle and its application to the present cases, it is essentially straightforward. The mortgagee has chosen to revise the mortgage contract to spread the payment of arrears over the remaining lifetime of the mortgage, meaning the mortgagors are required and permitted to pay them over that time as part of the contractual monthly instalments. The plaintiff has therefore waived its expectation and right to demand earlier payment of the capitalised arrears, which must be eliminated from the computation of subsisting arrears. To that significant extent the mortgagee is barred by its own actions from resiling from the contractual position which it has elected to take, whether or not the mortgagor agreed to the consolidation. The plaintiff has waived by election its right to rely in court proceedings upon the arrears which it has extinguished. The effect of waiver by election is somewhat different from promissory estoppel (the effect of which may be merely suspensory) and it is final, ie irrevocable: Motor Oil (Hellas) Corinth Refineries -v- Shipping Corporation of India {1990] 1 Lloyds Law Reports 391.

[57] The plaintiff’s reliance on extinguished arrears may fairly be described as double-billing. Unilateral consolidation with double-billing creates very real problems for borrowers, their advisers and the court. To the extent at least of the double-billing, it is unconscionable.

[58] First, the practice unfairly and confusingly distorts perceptions of affordability. Borrowers in default are faced with a monthly instalment increased to address a sum representing the arrears over the rest of the mortgage term and a demand (and indeed threat of repossession) for the immediate payment of the erstwhile arrears. This is, to say the least, confusing and must be a disincentive for many borrowers to make best realistic proposals to the lender or the court to address the arrears – particularly in light of an undisclosed “arrears element” in the monthly instalments. It also distorts the true arrears figures in the minds of those approached for advice and the court.

[59] Secondly, the practice means that if there is a proposal for an order for possession suspended or an adjournment on terms as to payment of a monthly sum towards the arrears as well as the ongoing monthly instalments, the court will not be able to define or ascertain the period within which that proposal, if maintained, will clear the arrears. The “reasonable period” within which under s8 of the 1973 Act the borrower must be likely to be able to address the arrears must be a “defined or ascertainable” one: Royal Trust Co of Canada –v- Markham as affirmed by successive Chancery Judges in this jurisdiction in Alliance & Leicester Building Society -v- Carlile and National & Provincial Building Society -v- Lynd. The court cannot accurately define or ascertain the period where an undisclosed amount of the consolidated contractual monthly instalment relates to part of the arrears relied on by the plaintiff.

[60] Thirdly, that undisclosed “arrears element” in post-consolidation instalments must lead to a nonsensical and troubling situation of “double-counting” when the plaintiff adds arrears of post-consolidation monthly instalments to those of pre-consolidation instalments (even accepting as correct the plaintiff’s incorrect submission that the earlier arrears were not extinguished by the consolidation). To some extent, the arithmetic must mean that the plaintiff is overstating, by duplication or double-counting, the total “arrears”.

[61] Fourthly, the plaintiff’s failure to explain its unilateral consolidation and double-billing in previous proceedings means that many suspended orders for possession (and indeed many other resolutions agreed between the parties) were made on erroneous assumptions as to: (a) the correct amount of arrears (since pre-consolidation “arrears” no longer existed); (b) how and when the arrears would be addressed in the future (as the undisclosed “arrears” element in consolidated monthly instalments would accelerate payment of the true arrears) and, as I have mentioned, the court’s ability to ascertain the true repayment period was significantly impaired, and (c) the future computation by the plaintiff of the contractual monthly instalments requiring to be paid in addition to the arrears.

[62] Fifthly, the misassumptions I have mentioned persuade me that when this plaintiff brings an application for leave to enforce a suspended order for possession it may face an uphill struggle unless by its grounding affidavit it: (a) confirms that any future “material” consolidation of arrears in the case will be in a strict compliance with the requirements of “good capitalisation” as defined by the Financial Conduct Authority (thereby requiring among other things the informed agreement of the “customer”); (b) discloses with particulars all past consolidations (save permitted “immaterial’’ capitalisations of minimal amounts) and all past double-billing events; (c) states the current state of account between the parties as to monthly instalments, arrears and so forth as prescribed (for affidavits grounding claims for possession) in Order 88 rule 5(3) of the Rules, (d) states the true arrears when the relevant suspended order and where appropriate any order varying its terms were made; (e) clarifies the particular circumstances in which it would be just to permit enforcement of the original order for possession (as varied by any subsequent order which had been made) notwithstanding the misassumptions I have mentioned; and (f) confirms in terms that the plaintiff in its figures is not relying on any pre-consolidation arrears.

[63] For like reasons I believe future applications by this lender for possession should also include the particulars of the state of account and of any consolidation and the express confirmations I have just specified for applications for leave to enforce. It would be open to the court on making any suspended order for possession to include a provision that in the event that the arrears are discharged by payment or consolidation the effects of the order shall cease: Zinda.

The post Mortgage possession: Lloyds and the arrears that weren’t appeared first on Nearly Legal: Housing Law News and Comment.

Barnet Council are consulting on changes to their 2012 Allocation policy. The main change proposed is that the current ‘residence requirement’ of two years be increased to five years. That is to say that no-one would be eligible for Barnet’s housing register without five years demonstrable residence in the borough.  (And yes, this applies to the homeless equally). They are not the only London council to consider five years residence requirement – so are LB Southwark – but their stated reason for the increase is specifically because:

Increased costs in inner London combined with restrictions on housing benefit has resulted in more households moving to outer London boroughs like Barnet.

Yes, Barnet fears a tidal wave of central London refugees, pouring into Barnet, renting one of the affordable private sector properties (even though Barnet also say that the PRS rents are “now the 4th highest out of 16 outer London boroughs”), and then living there for two years to get onto the housing list.

Of course, even if you manage to live in Barnet for two years, you will then probably be refused because you don’t also have a reasonable preference under s.166 HA 1996 – see  Annex 1 of the current allocation scheme available here, (apart from Barnet thinking it is s.167 HA 1996, which only applies to Wales. Dear Barnet, you are not in Wales.)

But still, two years is apparently not enough. In order for Barnet to make sure that people aren’t waiting on their waiting list, it is apparently necessary to dramatically increase the length of time people must wait to get to wait on the waiting list in the first place.

Amongst the other proposed changes is an increased penalty for not accepting a reasonable offer (to two years ban from one year) and sneakily:

Households at risk of violence will have to apply as homeless so that they can be placed in temporary accommodation and be removed from the risk more quickly.

Why has this replaced emergency transfers? The obvious answers are that i) Barnet largely discharges its homeless duty into the private sector and ii) it would end an existing secure tenancy, making any fresh council tenancy, even if actually achieved via the homeless route, into a new flexible tenancy (and see here on Barnet’s flexible tenancy policy).

So yes, Barnet intend to penalise their existing tenants who are at risk of violence, not to mention keeping them in temporary accommodation in the interim.

And the glorious ‘community contribution’ requirements (for housing preference) for those not employed are to be increased from 10 hours per month to 16 hours per month working for:

a not-for profit organisation that is registered with the Volunteer Centre Barnet or recognised by the Council, or a charity that is registered with the Charity Commission or is funded by the Council or another local authority or a faith based community group or organisation. Tenants and Residents Associations which are constituted are classified as not-for-profit organisation [sic.] They must be registered with Barnet Council or a Registered Social Landlord to qualify.

I spent quite some time looking at the previous/current Barnet allocation policy for talks at HLPA and HLPA North West. I was not impressed – indeed, the policy seemed to have some significant legal flaws. My notes from July 2013 can be downloaded here, with the usual provisos on now being out of date. (E.g. one of the issues raised in that talk may, for now at least, have been rendered academic by R (Jakimaviciute) v LB Hammersmith and Fulham [2013] EWHC 4372 (Admin), but others, I think, haven’t).

However, Barnet so far have avoided challenge, by luck perhaps.

The question is for Barnet (and other councils looking at a five year residence requirement), is whether these requirements are arguably unlawful. This is a question given added impetus by R(Winder) v Sandwell MBC, EHRC intervening [2014] EWHC 2617 (Admin) [our note].

While a residence requirement for allocation is probably not ultra vires, by reason of the Localism Act, the free movement, discrimination and Public Sector Equality Duty grounds raised successfully in the Sandwell Council Tax Relief JR might also be considered in relation to the operation and extent of a residence requirement for allocation. I don’t have a developed argument (yet) but it bears thinking about.

The post A longer waiting to wait appeared first on Nearly Legal: Housing Law News and Comment.

For most parties that enter into litigation (save for those on CFAs and some who are legally aided) a win isn’t really a win unless the other side is also ordered to pay your costs. I say most, because certain litigants enter into litigation knowing that come what May their costs will be paid on the indemnity basis. They have the foresight (or more accurately the power) to draft contracts which provide that, in the event of litigation, the other side (often a borrower or a long leaseholder) will indemnify them for all their legal costs irrespective of whether they win or lose.

While the court retains jurisdiction to intervene, ordinarily it will not do so unless the costs have been unreasonably incurred or are an unreasonable amount:Gomba Holdings Ltd v Minories Finance [1993] Ch 171 . There is a presumption (reflected in CPR 44.5), however, that costs under a contract are reasonably incurred and so it falls on the other party to prove to the contrary. In practice, certainly in respect of mortgagees, it is rare for the court to find that the presumption has been rebutted.

In The Co-Operative Bank Plc v Philips [2014] EWHC 2862 (Ch), Mr Philips was the owner of two residential premises both of which were the subject of mortgages in favour of Barclays Bank. He subsequently granted a further two second charges in favour of the Co-Operative Bank (“the Bank”) after it lent a company, of which Mr Philips was a director, a large sum of money. It was a term of the loan and the second charges that the amounts were due on demand. It was also a further term of the charge that “all costs charges and expenses incurred by the Bank and all other monies paid by the Bank in connection with the charge or the charged property were recoverable from Mr Phillips and/or the company as a debt and were to be charged on the charged property.”

The Co-Operative Bank subsequently called in its loan but the company did not pay the sum due. Unfortunately, for the Bank, nor was there sufficient equity in either property to discharge the full amount of the loan once Barclays’ charges were paid. The Bank, however, undeterred, and in full knowledge of this fact, brought a claim for possession against Mr Philips anyway. The Bank, however, subsequently discontinued its claim for possession.

The Bank conceded that it was liable to pay Mr Philips’ costs of defending the claim, but contended that it could recover those costs, as well as its own, from him under clause 9 of the charge and add them to the outstanding balance. Mr Philips disagreed and also contended that his costs should be assessed on the indemnity basis because the Bank’s claim for possession had been ab abuse of process.

Morgan J first held that the claim for possession had not been an abuse of process. The evidence, although incomplete, showed that the Bank had brought the claim in an attempt to pressurise Mr Philips and / or the company to pay the sum due. This did not amount to an abuse of process; the Bank was merely trying to enforce the debt it was owed. The Bank was not, however, entitled to recover either its own or Mr Philips’ costs under clause 9 of the charge. The Bank had, to use the words of Morgan J, “got absolutely nothing out of these proceedings, which have been a waste of time and expense from its point of view. The Bank itself appears to have recognised that by discontinuing the proceedings.”

Things might had been different if the Bank had supplied evidence explaining why it had chosen to discontinue the claim. The Bank’s counsel valiantly tried to persuade the court that it should infer from the evidence that the Bank had discontinued because Mr Philips had entered into an IVA. Had that been evidenced by the Bank it might have made a difference. But it wasn’t (in breach of earlier directions) and so it was found that the Bank’s costs had been unreasonably incurred. The position was even clearer in respect of Mr Philips’ own costs. Those costs had been necessitated by the Bank bringing a claim which it had discontinued and accordingly the costs were not reasonably incurred.

This is a useful case for borrowers. While it will not be that common for a lender to lose a claim for possession, it is arguably authority for the proposition that where a lender has made an application within the proceedings and lost, so that it has gained nothing from the application, such costs will have been unreasonably incurred.

The post You’ve got absoutely nothing out of this appeared first on Nearly Legal: Housing Law News and Comment.

I’ve got two Upper Tribunal decisions on bedroom tax appeals, both from Scotland. Both concern human rights related cases. One concerns what sounds like a fairly hopeless and sadly not well argued case based on disability. The other is considerably more significant and concerns article 8 and shared care of children.

CSH 374 2014 [decision can be downloaded here]
The appellant was subject to the 14% deduction on one bedroom. He was the sole tenant and occupant of a two bedroom property. He apparently is disabled. At the First Teir Tribunal, it was apparently argued by the tenant’s representative that:

The amended Housing Benefit Regulations are themselves discriminatory as they do not allow a remedy for tenants who are as vulnerable as the appellant in this case. The effect of the regulations is that it either forces him to move to a property which would compromise his health or he remains and is financially penalised and that in a situation where he was actually given this tenancy in the first place as a sole tenant – its not as if he is the last remaining occupant of several who had previously been there.

However, it seems that no particular case was made on the nature of the tenant’s disabilities and the Tribunal rejected that case, saying that the Regulations had been correctly applied and there was no basis in law to allow the appeal.

The Upper Tribunal upheld the FTT on this point.

“Given the very general nature of the submission on the issue of discrimination advanced before him, I hold that the tribunal judge dealt with it adequately in the paragraphs from his Statement of Reasons…”

However, the tenant had also raised a further argument that the Regulations were in breach of the Public Sector Equality Duty.

However that is not the end of the matter so far as this appeal concerned. There remains the question of whether the process of the making and implementing by the government of the policy which is enacted in regulation B13 constituted a breach of the Public Sector Equality Duty created by section 149 of the Equality Act 2010. Disability is a “protected characteristic” under section 149(7) of that Act. It is important to emphasise however that the Public Sector Equality Duty applies to the process I have just described and not to the making of decisions relating to individual claimants under regulation B13 once it had been enacted. The claimant’s representative appears to be under a misapprehension that the Public Sector Equality Duty applies in the latter situation and thus directly to the decision taken by the Council.

In MA and Others v Secretary of State for Work and Pensions [2014] EWCA Civ 13, the Court of Appeal in England and Wales held that the process I refer to in paragraph 11 above involved no breach of the Public Sector Equality Duty. See paragraphs 83 – 92 of the Judgement of the Master of the Rolls, Lord Dyson, and paragraph 98 of the Judgement of Lord Justice Longmore in that case.

Appeal dismissed, with the Tribunal adding for good measure:

The claimant’s representative does not refer to the Human Rights Act 1998 or any of the articles of the European Convention on Human Rights in her grounds of appeal on document 30 although she makes a general allusion to “discrimination” on document 48 where she responds to the submissions of the Secretary of State on documents 43 – 44. However for the sake of completeness I note that in MA and Others, cited in paragraph 12 above, the Court of Appeal in England and Wales held that the discriminatory effect of the enactment of regulation B13 was justified for the purposes of the European Convention on Human Rights. See paragraphs 39 – 82 of the Judgement of the Master of the Rolls and paragraph 99 of the Judgement of Lord Justice Longmore in that case.

Technically, sitting as a judge of the Upper Tribunal in Scotland, I am not bound by a decision of the Court of Appeal in England and Wales. However I should only decline to follow such a decision on a point indistinguishable from one arising before me if it was in my view, “clearly wrong”. See paragraph 13(a) of my decision in RJ v Secretary of State for Work and Pensions [2012] AACR 28. I do not consider that the decision in MA and Others is by any means clearly wrong either in regard to the Public Sector Equality Duty or to discrimination and justification under the European Convention on Human Rights. I thus follow it.

CSH 777 2013. [Judgment can be downloaded here]
The appellant is the sole tenant of a two bedroom property. The only other person who sometimes stays at the house is the appellant’s 14 year old son, who stayed each week for 3 nights, using the second bedroom as his own. In the course of the appeal, the tenant was awarded DHP from 1 April 2013 and confirmed to 31 March 2015. This had a bearing on the case. In addition, there were no one bedroom properties variable through his landlord and he was unable to take in a lodger. His hearing loss made it difficult to find employment.

The appellant’s argument on Art 8 was rejected by the First Tier Tribunal, but it was agreed by both appellant and respondent that the FTT had not properly directed itself on how Convention rights might be applied, having ceased to consider them after noting it could not make a declaration of incompatibility.

The appellant sought a declaration that his case was ‘seriously arguable’ and should receive a further hearing on the particular facts and circumstances of his case.

The full details of the appellant’s and the DWP’s submissions on the applicability of Article 8 in relation to the regulations in such cases are well worth reading. But in short, the Upper Tribunal found:

Article 8 was engaged.

I have reached the view that the first part of the Razgar test could be satisfied by a case such as the present, in which the under-occupancy deduction may affect the appellant’s tenancy, when the additional room is used by a child under shared care arrangements. I accept the relevance of UNCRC and that the best interests of the appellant’s son are an important consideration. As it seems to me, the question at this stage is whether there may be “interference”, as opposed to failure to provide or to give positive support. As well as the clear indications on the authorities that neither Article 8 nor any other Convention right are directed generally at the provision of benefits, in particular housing, there are indications that there might be cases in which a measure may interfere with longstanding arrangements in which considerations of the welfare of a child or children arise. This distinction between provision (the positive obligation) and interference (the negative obligation in a ‘shared care’ case) is indicated in paragraph 41 of the opinion of Baroness Hale in Holmes-Moorhouse, although I do note that that particular case had nothing to do with Convention rights

The consequences were not of such gravity as to amount to ‘sufficient gravity’ under the test in Razgar [2004] 2 AC 368.

However, I am also of the clear opinion that any relevant interference which may be established in this case could not, having regard to the jurisprudence on Article 8, be regarded as having consequences of such gravity as to satisfy the second part of the test and thus require the respondents to show justification. Here again I refer to the consideration of the free-standing claim in SG. At this stage I see no reason to leave the scheme of discretionary housing payments out of account and in that situation, looking at what this appellant may be able to establish, I cannot see that this case could be of sufficient gravity. Nor is SG the only case illustrating the degree of interference which would be required. As Mr Bryce fairly acknowledged, all that the appellant can point to is a degree of uncertainty in the past and a degree of uncertainty as to the future. As to the past, I cannot see that the by no means unduly long period during which the application for discretionary housing payment was being processed, or the brief accidental failure to make the payments, can have any weight at all. As to the future, while I do not regard this as irrelevant, I do not on the material before me think that it can have a serious effect on consideration of the present position. I note the reference in para 100 of SG to “a premature and pessimistic assumption” and consider the position about the discretionary payments in the short period of around six months during 2015 is similar. It will be clear from the foregoing that I regard the approach taken in MA and Rutherford to discretionary housing payments as part of the scheme under consideration, as relevant here even although the issue in those cases related to justification of discrimination. Mr Bryce did not argue otherwise although, as already noted, he may have been putting the arguments into slightly different compartments. Put shortly, taking the discretionary housing payments into account, there is no interference of any gravity at all with the appellant’s Article 8 right or that of his son.

However, the DWP sought a further decision:

that, even without the discretionary housing payments, there could not be sufficient interference, on the basis of the evidence proffered by the appellant. He argued that the facts that the appellant remained in his house, i.e. has not lost the tenancy, and continues to exercise the same child care, were on their own, i.e. even if the shortfall in benefit had not been made up, showed that he could not succeed in showing interference of sufficient gravity.

This the Tribunal was not prepared to accept.

I have decided the case particularly on the basis of the discretionary housing payments, but would add that I think an appellant who is not able to show actual, as opposed to threatened, serious breaches of his home and family life, may well find it difficult to overcome this particular hurdle in an Article 8 argument. It might also be – I only say might be – that the appellant’s son’s family life might not be sufficiently seriously interfered with even if the appellant were required to move to a smaller house. While one could envisage particularly serious consequences in some cases for children, might there also be, individual cases in which the interference does not have a sufficiently serious effect. However, I do not require to consider that further.

Appeal dismissed.

Comment

These cases show the detailed consideration that human rights  and discrimination cases will get in the Upper Tribunal.  And it is clear that it will be a high threshold.

While CSH 374 2014 was not a strong case in the first place, and apparently the argument on appeal was not well made, it is a concern that the UT – and a Scottish one at that – found that it would only depart from MA & Ors if, on the case before it, MA was ‘clearly wrong’. That seems to me to be the wrong test and to misunderstand the basis of the decision in MA – pace the appellant’s argument in the Carmichael FTT.

The position in CSH 777 2013 is rather different. The Tribunal accepted that Art 8 was engaged on a ‘separated family’ case. This specific case failed on the facts, in particular that there was a commitment to two years of DHP, from April 2013. While the case didn’t even reach the point of considering justification, largely due to the DHP being in payment, there does remain the possibility of an Art 8 appeal on this issue going further. (Though it should be noted that the DWP raised Humphreys v HMRC [2012] 1 WLR 1545 in argument, and that this was not dealt with by the UT, as not necessary to decide.)

Based on this, it would seem that receipt of DHP, and conditions around the receipt of DHP, will potentially play a significant role in UT decisions on human rights appeals, both Art 8 and Art 14.

The post Bedroom tax and human rights: The UT has a go appeared first on Nearly Legal: Housing Law News and Comment.

The Home Office has (finally) announced the ‘pilot’ areas for the landlord immigration check requirement under Immigration Act 2014.

The areas are Birmingham, Walsall, Sandwell, Dudley and Wolverhampton. The requirement will come in to force in those areas on 1 December 2014, with other areas to follow at unspecified dates in 2015.

The equipment will apply to all tenancies, leases below 7 years, sub-lets or lodging arrangements granted on or after 1 December 2014 in the affected areas. Existing or renewed agreements where the tenancy/lease/lodging etc. is continuous from before 1 December will not be affected.

Councils are exempted (including discharge of homeless duty via private sector), as are other social landlords (where they have already been required to consider prospective tenant’s immigration status before allocating them the property) and hostels and refuges ‘which are managed by social landlords, voluntary organisations or charities, or which are not operated on a commercial basis and whose operating costs are provided either wholly or in part by a government department or agency or a local authority’.

The Home Office has also released a ‘Work in Progress’ “Code of Practice on illegal immigrants and private rented accommodation“, for landlords and letting agents.

This makes clear how simple the legislation and the checking process is, coming in at 31 pages. It includes such luminously transparent passages as:

Where the initial right to rent checks are satisfied with a document from List B, or where the Landlords Checking Service has provided a “yes” response to a request for a right to rent check, a landlord establishes a time-limited statutory excuse. This time-limited statutory excuse lasts either for 12 months or until expiry of the person’s permission to be in the UK or the validity of their document which evidences their right to be in the UK, whichever is later. Follow-up checks should be undertaken before this time-limited statutory excuse expires, in order to maintain a statutory excuse.

And how can the landlord check if not sure?

When an individual cannot provide the landlord with any of the documents from List A or List B, but claims to have an ongoing immigration application or appeal with the Home Office, or that their documents are with the Home Office, or they have been granted a right to rent on a discretionary basis, then the landlord can request a right to rent check from the Home Office’s Landlords Checking Service using an online form. Where a landlord does not have access to the internet, a request can be made by telephone. The Landlords Checking Service will respond to the landlord with a clear “yes” or “no” response within 2 working days.

In order for the landlord to request a check, the prospective occupier must provide the landlord with a Home Office reference number. This can be, for example, an application or appeal number, application registration card (ARC) number, certificate of application number issued to a family member of a national of an EEA country or Switzerland, case number, etc. The landlord must include this information when requesting a right to rent check, to receive the “yes” or “no” response.

Oh, this is going to go so well.

Back in May, we said that we thought this was a horrendous, nasty, complex piece of legislation. Nothing has changed. It places a significant burden and indeed risk on landlords, faced with – to put it mildly – hideously complicated issues of immigration and residence status. As a result, it will certainly result in ‘safety first’ acts of discrimination against potential tenants whose right to reside in the UK is not glaring obvious, like a UK passport.

The post Landlord Immigration Checks from 1 December by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

The question of the use of hedonic regression in the calculation of relativity is, I suspect, not breakfast table conversation for some of our readers even if it would appear that in the bars of Chelsea they talk of nothing else. The Upper Tribunal’s decision in Re: 47 Phillimore Gardens (available on the Upper Tribunal website) is all about exactly that topic and I think it is an important one. I will therefore try to unpack with my apologies to those readers for whom most of this is obvious.

The starting point is a house, 47 Phillimore Gardens. The appellants own a leasehold with 52.45 years left. They would like to own the freehold, which is owned by the respondent. The Leasehold Reform Act 1967 gives them a right to do so, by a process known as “enfranchisement”, provided they pay some compensation to the freeholder in return.

It would be an understatement to say that the 1967 Act has been “hacked about a bit” and here is not the place to discuss how exactly the compensation is calculated, except that it includes an element known poetically as the “marriage value”. The value of the house after merging the leasehold and freeholds is likely to be worth more than the sum of the value of each one individually and this extra value is known as the “marriage value”. In the case of 47 Phillimore Gardens, the tenant would have to include half the marriage value in the compensation paid to the freeholder (see section 9(1D)).

The conventional approach – and the one agreed by the parties before the Upper Tribunal – is to start with the value of the freehold with vacant possession and then work out what proportion of that value a leasehold of the length remaining at the time of valuation (i.e. in this case 52.45 years) would be. One would expect a very long lease to be worth almost as much as a freehold and a very short lease to be worth much less. This proportion is known as the “relativity” (alas nothing to do with Einstein).

For example in this case the appellants argued for a relativity of 87.04% and the respondents for 75.5%. Their positions are that way around because the appellants want to say that the leasehold is almost as valuable as the freehold and therefore having the freehold as well isn’t really worth all that much more, in other words a high relativity leads to a low marriage value and less to pay to the freeholder in compensation. The freeholder wants to argue exactly the other way.

The 1967 Act throws in an extra complexity in the form of section 9(1A) which says that the price payable:

… shall be the amount which at the relevant time the house and premises, if sold in the open market by a willing seller, might be expected to realise on the following assumptions … (a) … on the assumption that this Part of this Act conferred no right to acquire the freehold; or an extended lease

In other words, our valuation exercise has to imagine a situation where (contrary to the facts) the leaseholder has no right to enfranchise.

Note that, for the purposes of the hearing, the Upper Tribunal assumed that the imaginary situation in 9(1A) is one where the leaseholder in question has no right to enfranchise but other leaseholders would do. This means that we assume that for some reason the 1967 Act does not apply to the property in question but that otherwise it applies normally. The appellant had thought of challenging that position but eventually conceded the point.

The Upper Tribunal thought that was right and provisionally indicated that only the leaseholder trying to enfranchise is to be assumed not to have a right to do so. This means that the commonly used phrase “no Act world” for the imaginary situation is rather misleading.

The problem with imaginary worlds is that they are: imaginary. How does one work out what the relative value of a leasehold against a freehold would be in a world that doesn’t exist? There are some leasehold properties for which there is (for various reasons) no right to enfranchise but sales of such properties are unusual and very difficult to compare with those of a normal leasehold property. We are left with inferring the relativity value somehow.

Enter Dr Philippe Bracke, a research economist. He had done extensive research using a technique known as “hedonic regression” to try to work out a graph of relativity values (plotted against length of lease).

Hedonic regression (not as exciting as it sounds) is a technique for working out the value of something for which there is no market. Suppose we want to work out the value of a house, we proceed very roughly as follows: first consider the kinds of thing that make a house valuable, eg number of rooms, size, number of bathrooms or state of repair. We would hope that there would be some mathematical function (call it the “price function”) that took as input each of these factors and spat out at the end the value (or at least the likely average value) of a house with those properties.

Now if we take a large number of house sales of known value and for which we know the properties (such as number of rooms) we are using as input, then we try, using statistical techniques, to work out the price function. A family of such techniques are known, collectively, as “regression analysis”. Hence “hedonic regression”.

In simple terms what the statistician is doing is trying to work out (1) how much each aspect of a house is “worth” on its own and (2) how much that contributes to the total value of the house when combined with other properties of the house. Having done that it should be simple enough to work out the value of another house with known properties because one simply combines them using (1) and (2) above. The “hedonic” (from a Greek word meaning delight or pleasure) comes because we are essentially trying to work out how much an extra storey/room/bathroom etc would “delight” a purchaser.

At this point you are permitted to be sceptical. What if there are significant aspects of a house that aren’t included? What if the sample of house sales selected is skewed in some way? What if one property of a house if correlated with another – for example the number of storeys in a house may be correlated with whether the house is in a town or not – so as to skew the results. You can be sure that the respondent took many points on these lines.

But these kinds of objection are inevitable in any attempt to model the real world. Models are always simplifications. It is easy enough to pick holes in an analysis but what matters in the end is, how good is the model?

Dr Bracke’s idea was to use a considerable body of data about leasehold sales from 1987 to 1991. At that time there was no right to enfranchise or extend the leases of leasehold flats (those rights came into force in 1993 with the passage of the Leasehold Reform, Housing and Urban Development Act 1993) so there were plenty of unenfranchiseable leaseholds on sale. It was this data set that was used for the hedonic regression discussed above.

Both parties called academics as experts on Dr Bracke’s methods. Both were professors at the University of Cambridge but in different departments so that the argument might be characterised as Economics v Land Economy. The result of that clash, and the Upper Tribunals’ analysis, was that, in principle, Dr Bracke’s technique was sound. There were however a number of serious problems with it.

One that seemed significant to me was that in order to produce a graph of relativity, Dr Bracke had to fit a line to a number of points. His data source was particularly rich in leaseholds of 55-65 years and 85-100 years, so 52.45 years required an extrapolation off the bottom end.

Now fitting a line to a set of points can be done “by eye” (just drawing a line that looks like it fits well) but this is clearly a highly subjective exercise and could result in rather different answers depending on the line drawn.

It seems to me that Dr Bracke did not do much better than that. He used what is known as a polynomial to fit to the graph. Polynomials are generalisations of quadratics with higher powers of x.

For the non-mathematician, they are essentially wiggly lines with the ends going off either indefinitely upwards or downwards. Obviously the more wiggles you put in, the closer fit you get because your line can wiggle between the points it wants to get close to. The disadvantage is that polynomials go a bit haywire at the end – either rising much faster than the rest of the curve, or falling much faster – and the more wiggles there are the more unnatural the curve can look.

Dr Bracke used a curve with three wiggles in it (a “fourth-order polynomial curve”). But he could as easily have used one with more or fewer wiggles or for that matter have used something other than a polynomial. The resulting graph did some odd things – for example predicting that in some circumstances a freehold would be worth less than a leasehold or that 80 years and 50 years are worth roughly the same.

The Upper Tribunal’s conclusion that this, along with numerous other more minor points, meant that Dr Bracke’s relativity curve did give some qualitative information about the shape of relativity in the period 1987 – 1991, but that it was not much use quantitatively.

Despite this the Upper Tribunal thought that, on balance of probabilities, Dr Bracke’s curve was not useful for modern relativity values. Things were very different then, for example interest rates meant people’s attitude to investment was quite unlike it is now. There was no evidence that Dr Bracke’s results could be carried forward to the present day.

Now this is important. It means that although Dr Bracke and hedonic regression failed to work in this case, if there were better (or indeed any) evidence that his results could be applied to today’s relativity, things might be different. My impression is that the Upper Tribunal is open to considering a similar approach with the appropriate additional evidence.

There are lots of very sensible and detailed criticisms of Dr Bracke’s work which are well worth reading in the judgment that I haven’t repeated here. But the other interesting thing about the decision is, what are the alternatives?

Suppose we don’t use hedonic regression, what else can we do to work out relativity? We might:

• examine comparables and try to infer relativities from them – something that the respondent accepted was impossible in the present case and is likely to be difficult in general
• look at the value of settlements between leaseholder and freeholder – but this is problematic because of the “Delaforce effect” (the freeholder knows it will be cheaper for the leaseholder not to go via a tribunal process and hence includes some of that discount in the price)
• look at tribunal decisions – even more problematic because only a skewed sample come to tribunal.

In fact what almost everyone does is to look at a set of graphs “published” by RICS. The scare quotes are intentional. RICS does not endorse them, but merely publishes them for information. The Upper Tribunal noted that there are numerous problems with these graphs which include: some are based on very little data, some are based on old evidence (as old as Dr Bracke’s) and often not updated, their methodology is often unclear, some are based on settlement rather than sales data and so on.

In my view it is likely that if we knew more about the way the graphs were prepared we could pick as many holes in them as we might in Dr Bracke’s work.

Despite this, the appellants offered an, in my view, rather cheeky argument in favour of the RICS graphs. The section 9(1A) hypothetical purchaser will, at least in prime central London (which is where 47 Phillimore Gardens is located), consult an expensive adviser who will almost certainly make use of the RICS graphs in deciding what to pay.

In other words: even if the graphs are based on a wholly unreliable methodology, they are right because people will use them in deciding what relativity to use. In that sense they become predictive because they set the expectations they are purporting to predict.

This sort of circularity is not unknown to the law but it seems to me a rather odd position for us to be in. One of the reasons the Upper Tribunal ended up there was that no valuation evidence whatsoever was put before them. Another application with valuation evidence might go a different way. Furthermore, if a new methodology (eg hedonic regression) becomes popular for some reason then exactly the same argument could be used for it and against the RICS graphs.

The post Hedonic regression and relativity by Francis Davey appeared first on Nearly Legal: Housing Law News and Comment.

We are (or more accurately I am) a bit late on this one. It is quite important though and the fact I have only just written it up should not detract from that.

In Kanu v Southwark LBC [2014] EWCA Civ 1085, the Court of Appeal considered whether the public sector equality duty added an additional obligation on housing officers when they came to consider whether an applicant had a priority need. As you will all know the public sector equality is an obligation placed on public authorities by s.149, Equality Act 2010 to have due regard to the need to eliminate discrimination, harassment, victimisation; advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and foster good relations between persons who share a relevant protected characteristic and persons who do not share it. Broken down, when someone is disabled, the duty further requires an authority to have due regard to the need to take steps to take account of a person’s disability.

As you will also all recall in Pieretti v Enfield LBC [2010] EWCA Civ 1104 (our note here) the Court of Appeal held that the duty (under the previous equivalent provision s.49A, Disability Discrimination Act 1995) required a reviewing officer to carry out inquiries into an applicant’s disability that the Housing Act 1996 had not previously required, i.e. where the applicant had not raised the issue but the reviewing officer was on notice that there was a possibility that the applicant’s disability would be relevant to whether they were intentionally homeless or not.

In this case Mr Kanu suffered from a mental disorder which had caused him to experience psychotic depression. On occasions he had also had suicidal thoughts. At the date of his application he was receiving treatment for this disorder as an outpatient as well as medication. A medical adviser, employed by the authority, was of the view that his mental disorder would greatly inhibit his ability to care for himself. Mr Kanu relied on two additional medical reports from two consultant psychiatrists.  One thought that Mr Kanu was exaggerating his symptoms and could not be certain as to the extent of Mr Kanu’s mental disorder. The other was satisfied that Mr Kanu was suffering from psychotic depression but agreed it was hard to diagnose precisely because Mr Kanu’s accounts were not always consistent.

The authority none the less were not of the view that he had a priority need because, with the assistance of his family, he could cope with day to day living and would be able to fend for himself. This decision was subsequently overturned on appeal but the authority reached the same conclusion after the second review. Mr Kanu successfully appealed again to the county court. The Recorder found that decision was flawed because (1) the reviewing officer had failed to consider the fact that Mr Kanu’s mental health was deteriorating, (2) irrationally decided that Mr Kanu could access medication while homeless when there was no evidence that he could, (3) the evaluation that Mr Kanu could cope with the help of his family was “unfair” as opposed to irrational and (4) it failed to properly consider the public sector equality duty.

The authority successfully appealed to the Court of Appeal. The Court of Appeal dealt with the first three points relatively quickly. The evidence did not demonstrate that Mr Kanu’s mental health was worsening and also demonstrated that Mr Kanu could continue to access medication from his GP and the hospital where he would continue to be an outpatient. Moreover, the evaluation that the applicant would be able to cope if street homeless with the assistance of his family was not irrational and therefore could not be interfered with.

In respect of the public sector equality duty, the Court of Appeal accepted the authority’s contention that in a priority need case the public sector equality duty did not require it to do anything more or extra than it was required to do so under s.189 anyway, i.e. it had to consider whether the person’s disability meant that they were vulnerable. It added nothing to the duty under Part 7 to consider whether he had a priority need. By applying the Pereira test (i.e. considering whether an applicant is less able to fend for themselves when homeless than the ordinary homeless person so that injury or detriment will result) the authority is taking due steps to take account of the applicant’s disability. Section 149 did not require any additional analysis to that which was required by Part 7.

More controversially, in response to a submission by Mr Kanu’s counsel, the Court of Appeal also held that s.149 did not require the review officer to seek further medical evidence as to the effect of an applicant’s disability if the reviewing officer would not be required to under Part 7. This was because the duty added nothing to the obligations under Part 7.

Comment

I am frustrated by this decision. I am in complete agreement that the public sector equality act duty added absolutely nothing to this case. What more inquiries could there have been? He already had two consultant psychiatrists giving an opinion. I would also go so far as to say the same for the vast majority of priority need cases. I am less certain, however, that it is right to say that in every case it won’t ever be relevant. In R (Brown) v Secretary of State for Work and Pensions [2008] EWHC 3158 (Admin), at [85], it was held that s.49A (now s.149) requires the public authority to “have due regard to the need to take steps to gather relevant information in order that it can properly take steps to take into account disabled persons’ disabilities in the context of the particular function under consideration.” This has become known as the duty of enquiry.

There is an interesting point (which appears to have been raised by Mr Kanu’s counsel although the judgment doesn’t do it justice if it was) as to whether the duty of enquiry under s.149 is more onerous than the duty under Part 7. The Court of Appeal, however, completely ducked the issue finding that the duty under s.149 added nothing to any obligation under Part 7.

I am not so sure that is correct though. The one crucial difference between s.149, 2010 Act and s.184, 1996 Act is that it is for the authority to determine the extent of its inquiries under the 1996 Act, subject to a Wednesbury challenge. While an authority must make all “necessary” inquiries it is for them to decide what those inquiries are and a court will not interfere with the decision even if further inquiries may have been sensible or desirable if the decision is not irrational. In contrast it is for the court to determine if s.149 has been complied with; the authority cannot hide behind a defence that it has acted reasonably. If the court thinks a further inquiry was necessary and it hasn’t been undertaken then the duty under s.149 has not been complied with. Does that mean that in practice s.149 may require more extensive inquiries than under Part 7 in certain cases? Apparently not. We have no idea why though. In my view that’s a shame because it is not obvious and it is not even clear that the Court of Appeal took the point.

We deserve better.

The post The public sector equality duty and priority need by S appeared first on Nearly Legal: Housing Law News and Comment.

When is a Secure Tenancy Agreement not a Secure Tenancy Agreement?

News has reached us of an interesting case in Bow County Court involving the right to succeed to a secure tenancy and the operation of s.103 of the Housing Act 1985: London Borough of Waltham Forest v Mahmood.

S.103 may be an unfamiliar provision to some so this is what it says:

(1) the terms of a secure tenancy which is a periodic tenancy may be varied by the landlord by a notice of variation served on the tenant

(2) before serving a notice of variation on the tenant the landlord shall serve on him a preliminary notice-

(a) informing the tenant of the landlord’s intention to serve a notice of variation,

(b) specifying the proposed variation and its effect, and

(c) inviting the tenant to comment  on the proposed variation within such time, specified in the notice, as the landlord considers reasonable;

and the landlord shall consider any comments made by the tenant within the specified time

(3) Subsection (2) does not apply to a variation of the rent, or of payments in respect of service or facilities provided by the landlord or of payments in respect of rates

(4) The notice of variation shall specify—

(a) the variation effected by it, and

(b) the date on which it takes effect;

and the period between the date on which it is served and the date on which it takes effect must be at least four weeks or the rental period, whichever is the longer.

(5) The notice of variation, when served, shall be accompanied by such information as the landlord considers necessary to inform the tenant of the nature and effect of the variation.

Mr M was the son of the late Mrs M, who held a secure tenancy of a 3 bedroom flat with LBWF from 1982 until her death in September 2011. Towards the end of her life, Mrs M became increasingly infirm and dependent on a Social Services care package and family support.

At some point in the months prior to her death, Mr M moved in with his family to assist with this support and upon her death, he applied to succeed to the tenancy. The local authority refused his application on the grounds that he could not show 12 months continuous residence prior to his mother’s death. Notices to quit were served on the property and on the public trustee and possession proceedings began.

This is where it becomes interesting because Mrs M’s 1982 agreement allowed for a 6 month qualifying period for family members. Over the course of 2008 and 2009, LBWF planned to alter its terms and conditions (including bringing the succession provision into line with s.87 of the 1985 Act) and this process culminated in fresh T&Cs, which were intended to take effect from May 2009.

Mr M argued that the 1982 agreement was the effective agreement and that he was entitled to succeed to the tenancy by virtue of 6 months continuous residence. This required LBWF to prove that the preliminary notice and notice of variation were duly served on Mrs M. Over the course of the proceedings, it became apparent that LBWF were encountering some difficulty in locating those notices. Nothing could be found in connection with Mrs M and there was no trace of the specimen notice of variation. LBWF gave evidence that, following completion of the exercise in 2009, the documents had been placed in storage and an office move in 2013 was delaying discovery of the notices.

The case was effectively put on ice for approximately 12 months until it was heard by DJ Dixon at the beginning of September this year. The council did not produce any further evidence and they argued that the court could conclude on the balance of probabilities that a diligent exercise had been completed in a diligent manner and that the notices had been served on Mrs M (applying the principles in Entrust Pension Ltd v Prospect Hospice Ltd [2012] EWHC 3640 at paras 39-40).

DJ Dixon disagreed. It was a matter of concern that the notices of variation had disappeared en masse and the only inference the court could reasonably draw from the fruitless search of the files was that the notices had never been served on Mrs M. The 1982 agreement therefore applied and, having found Mr M to have resided at the property from December 2010, the possession claim was dismissed.

Comment

This is clearly a case with significant ramifications not only for LBWF’s secure tenancies pre-dating May 2009 (of which there were roughly 13,000) but also for those other local authorities who may need to carry out due diligence into their variation procedures. It has perhaps been taken for granted during litigation that secure tenancies have been properly varied, particularly when following the correct procedure is not as critical to the outcome of a case as it was in this case. However, unless variation documents have been properly catalogued and recorded, councils will have to think twice before pleading that their tenants’ T&Cs have been successfully varied.

The post Ch ch ch ch changes by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

In Nogueira v Westminster the Upper Tribunal had to deal with a rather odd decision of the First Tier Tribunal (called the “F-tT” in the report – an orthography I shall avoid).

To cut what must have been a long story short, the case was about major works to a large block. The freeholders had carried out major works. Somehow (the Upper Tribunal report is unclear) the case had reached the FTT for determination of the payability of the large service charge bill arising.

The FTT found that there were defects in the work that needed to be put right. That would imply that the work was not to a reasonable standard and hence service charges for the costs incurred in the works were unreasonable and unpayable, at least to some extent.

The FTT found instead that all the service charges were payable because the freeholders had given undertakings to the tribunal that they would carry out further remedial works. If the undertaking were not complied with, though the FTT, then the tenants could enforce them as an order of the tribunal.

Surely, you might think, the FTT can’t do that? Indeed not. In the Upper Tribunal the parties agreed that the FTT’s approach had not been acceptable. The Upper Tribunal, in the form of HHJ Huskinson agreed. While there was no need for him to decide the point (because it was agreed with the parties) he held that:

• the FTT has no inherent jurisdiction to grant injunctions and hence to accept undertakings
• there was no statutory basis for accepting an undertaking of this kind
• in any case the FTT had no power to enforce such an undertaking
• the undertakings offered before the FTT were “much too imprecise to be the proper subject of such an undertaking”

What an FTT could do, he thought, in a case where remedial work was required, was to find, was to find that one sum (£X say) was recoverable in full and that another sum (£Y say) would be reasonable if the works were done properly. That is not the same thing as accepting an undertaking.

I think this must be right. Section 27(3) of the Landlord and Tenant Act 1985 says that the FTT may determine what would be the payability of service charges if costs were incurred. It is therefore possible for the FTT to rule that a sum would be payable in hypothetical circumstances of this kind. Personally I would want to avoid hypothetical findings of that kind because when work is actually finally completed costs are rarely what was anticipated and outcomes not always intended.

The post Cannot undertake to the FTT to patch up bad work by Francis Davey appeared first on Nearly Legal: Housing Law News and Comment.

I haven’t written about the Affordable Homes Bill, partly because time, and partly because I was deeply cynical about the Bill’s prospects of getting anywhere pre-election, and the omissions it contained. (In fact for many of the same reasons contained in this rant).

But with great gratitude, we have a guest post by Dr Joe Wills, lecturer at the School of Law, University of Leicester, and very good it is.

The Affordable Homes Bill: A Partial Solution

On Friday 5th September the Affordable Homes Bill was approved at second reading in the House of Commons by 306 votes to 231. The Private Members Bill, introduced by Liberal Democrat MP Andrew George, may bring about major changes to the Coalition Government’s ‘bedroom tax’ policy if enacted into law.

Since April 2013, tenants in social housing who are deemed to have excess bedrooms for their needs have seen their housing benefit cut by up to 25%. The policy has been widely criticised for causing financial hardship, uncertainty and stress for many affected households, particularly for persons with disabilities. If Mr George’s bill were passed into law it would mean that tenants who are not found suitable smaller accommodation would be exempt from the reduction, as would disabled adults who need their own bedroom or who have adapted homes.

The Proposed Reforms

The regulations governing the ‘bedroom tax’ have meant that working age social housing tenants in receipt of housing benefit (HB) have experienced a reduction by between 14 and 25% in their benefit entitlement where their housing is deemed too large for their needs. The policy permits one bedroom for each person or couple living as part of the household and also expects two children of the same gender or two children under 10 regardless of gender to share a bedroom. The regulations also allow one additional bedroom where the claimant or the claimant’s partner requires an overnight carer or for a disabled child who cannot share a bedroom with a sibling as a result of disability.

The proposed bill would provide further exemptions from HB reductions in three instances. Firstly, it would exempt households that can produce evidence to a local authority that the dwelling has been adapted to meet the disability need of a member of the household and that the cost of the adaptation is not less than an amount that will be set by future regulations made by the Secretary of State.

Secondly, the bill would permit an additional bedroom for the HB claimant, their partner or a close relative if they are in receipt of any component of Disability Living Allowance or of Personal Independence Payment and the relevant authority is satisfied that they are not reasonably able to share a bedroom with their partner or sibling. This would extend the exemption for disabled children to adults as well.

Finally, households will be exempted from the reduction in housing benefits where ‘neither the claimant’s landlord nor a local authority, where it is not the landlord, has made a reasonable offer of alternative accommodation’.

Comment

This bill, as it is currently drafted, undoubtedly goes some way to addressing concerns raised about the adverse impact of the bedroom tax. Excluding adapted accommodation from benefit reduction is a step forward. Many persons with disabilities have significantly adapted accommodation, for example ramps for wheelchair access, internal lifts, ceiling hoists and specially adapted baths and toilets. It is estimated that approximately 100,000 households affected by the bedroom tax have been adapted or were purpose built to accommodate the tenant’s needs arising from disability. Currently such households may apply for discretionary housing payments (DHPs) to make up the shortfall in the HB but as the House of Commons Work and Pensions Committee has noted, the lack of detailed guidance for the award of DHPs and their short-term and temporary nature has caused a great deal of stress and uncertainty for affected households that have to apply and re-apply for them.

Extending the current provision of an extra bedroom for children who cannot share as a result of their disability to adults in couples who cannot share for the same reason is also to be welcomed. It is fragrantly discriminatory to penalise persons with disabilities because they cannot share a room with their partner due to needing a separate specialist bed, space for careers and/or room to manoeuvre a wheelchair for example. This category of disabled HB claimants are a small and readily definable group and it is unlikely that exempting them from the deduction would give rise to any significant financial cost or administrative difficulties. In contrast, impelling such claimants to go through the cumbersome task of repeated DHP applications whilst relying upon the vagaries of temporary and discretionary pay-outs seems needlessly cruel and arbitrary.

Lastly, the requirement that claimants must be made a ‘reasonable offer of alternative accommodation’ before their HB is cut is potentially the most far-reaching reform proposal. One of the main criticisms levelled at the bedroom tax is that its purported aim of encouraging HB claimants to downsize is flawed due to the gap between the supply and demand for smaller social housing that prevents households from downsizing even if they wished to. Indeed, recent figures obtained by a freedom of information request by the Labour party revealed that up to 96% of those affected by the policy were trapped in their larger homes because there is nowhere smaller within the local social housing stock to take them. If these projections are correct then the proposed requirement of reasonable alternative accommodation could for all practical purposes signify the beginning of the end of the bedroom tax.

In spite of these welcome reform proposals to this deeply unpopular policy, the Bill as it currently stands has a number of shortcomings. Firstly, the additional exemptions do not address all of the circumstances that give rise to unjust and discriminatory outcomes. For example, they do not cover households that need additional rooms for overnight carers for disabled children. Nor do they cover households that require a spare room to store essential medical equipment such as wheel chairs, oxygen tanks and so on. The new exemptions also fail to address the negative impact of the policy on single parents who do not live full time with their children. These parents may wish to have a ‘spare’ room to allow their children to stay when they visit them, but under the current policy they are put in a catch 22 situation of having to relocate to one-bedroom properties, and therefore not be able to properly accommodate their children, or be placed in extreme hardship possibly resulting in their inability to afford the rent.

Another concern with the bill is that, in relation to the first two exemptions, it places the burden upon the HB claimant to demonstrate to their local authority that they should be exempted. In the first place, this will depend upon these claimants being made aware that they are entitled to apply for these exemptions. Beyond that, the process of making the application may be long and cumbersome. For example, in relation to the adapted homes exemption, the HB claimant must establish their case by providing ‘the relevant authority with… certificates, documents, information or evidence’ and this claim will only be accepted if ‘the cost of the adaptation is not less than an amount prescribed in regulations made by the Secretary of State’. The calculation of adaptation costs will not always be a straightforward matter and will in some instances be likely to give rise to protracted claim, rejection and appeal processes.

Finally, the bill is likely to give rise to a number of complex legal issues: what forms of adaptation will be taken into account? When will an individual not ‘reasonably’ be able to share a bedroom due to disability? And most significantly: what will constitute ‘a reasonable offer of alternative accommodation’? In relation to the latter, the bill states that this may be defined by subsequent Regulations. Given the enormous variation in people’s housing needs, community and family ties and emotional attachment to their locality, legal guidelines that attempt to clarify the meaning of ‘a reasonable offer of alternative accommodation’ will no doubt trigger further litigation and judicial review claims.

Conclusion

The Affordable Homes Bill is still in the early stages of its legislative drafting. If it enters into law, it will likely be significantly amended. As it currently stands, the additional proposed exemptions from the bedroom tax are to be welcomed for their potential to shield affected individuals from the adverse impact of the policy. However, the exemptions do not address all the situations that currently give rise to discriminatory and unjust outcomes and are also likely to give rise to protracted and costly administrative and legal disputes in some instances. It may simply be easier and preferable to abolish the bedroom tax altogether.

Dr Joe Wills
University of Leicester, School of Law

The post Affordable Homes Bill & the bedroom tax by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

A busy Thursday for housing law, not yet law, housing benefits and housing misc.

Item one.  A Scottish Upper Tribunal is to hear a room size appeal on 18 September. This is one of the first Fife decisions. It is not the lead case in the English Upper Tribunal and may well be the first Upper tribunal decision on room size.

Item two. A new Wirral FTT bedroom decision, A wheelchair user and Consultant Planning Inspector who had always used the second bedroom as a home office, with the landlord’s knowledge from the start, had the FTT declared that the ‘second bedroom’ was not a bedroom.

Item three. Some serious research results from Sheffield Hallam University on the impact of LHA changes since 2010 – caps, reductions in percentile etc.. What look like headlines. Rents didn’t go down. Tenants cut back on essentials to meet shortfall and landlord stopped doing repairs and renovations.  Also Central London empties to the outer boroughs in (temporary) search of affordability.

Item four. Following our post on Barnet’s proposed allocation changes, picked up by the local paper, there is now a petition, launched by a Barnet Councillor, on retaining risk of violence as a priority banding category.

Item five. And the winner of non-sequitur of the week! The DCLG announces that the government is going to support Sarah Teather MP’s private member’s bill on retaliatory eviction (on which we will have a proper post very shortly, honest, because this is an important thing). This will likely involve a ban on service of a section 21 for a specified period after a reported and confirmed instance of lack of repair (e.g. Council issued hazard warning or improvement notice).

The RLA promptly issued a press release  shrieking ‘Ministers make it easier for nightmare tenants‘ adding ‘Ministers are handing nightmare tenants who bring misery to the lives of their neighbours and landlords alike, another weapon to prevent their removal’. Oddly enough, the RLA press release doesn’t actually address the ‘landlord not doing repairs despite it being confirmed by the council that repairs are needed’ bit of the bill at all.

The post A Thursday stuffed with housing stuff by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

The government (through its Minister for Communities and Local Government, Stephen Williams) today announced its backing to Sarah Teather’s private members bill, whose aim is to prevent landlords from evicting tenants who have complained about disrepair in their home or where health and safety hazards are found to exist at the premises, using the accelerated possession procedure. Statistics provided by Shelter show that 200,000 tenants faced possession proceedings in the last 12 months in response to complaints about the condition of their home.

The bill in its current form has the following objectives:

1. to prevent a landlord from serving a s.21 notice on a tenant within 6 months of service of an improvement notice, a hazard awareness notice or a notice of emergency remedial action under the Housing Act 2004
2. to prevent a landlord from serving a s.21 notice within 6 months of  ‘a relevant complaint.’ A ‘relevant complaint’ means notification in writing of any defect which would give rise to the repairing duty under s.11 of the LTA 1985; or that the premises are prejudicial to health (except where that prejudice is a result of tenant neglect); or that a Cat 1 or Cat 2 hazard exists at the premises (for which a local authority environmental health officer’s certificate would suffice)
3. to prevent a landlord from serving a s.21 notice in the absence of a current gas safety or energy performance certificate
4. it will be a defence to a claim for possession if a tenant can show that the s.21 notice was served within the relevant period
5. except where a gas safety or energy performance certificate is absent, a landlord may still recover possession where they have entered into a binding contract for sale of the premises before the court hearing

The bill is due to undergo a second reading in the Commons on 28th November 2014

Comment

The protection of tenants from the acts of unscrupulous landlords is a principle which is to be welcomed wholeheartedly but the bill raises a host of issues in its current form. A tenant would not appear to be required to engage the disrepair pre-action protocol to rely on the present s.(2)(2)(a) and neither would a landlord need to be yet in breach of the s.11 duty.

But would a ‘relevant complaint’ be valid if made to the landlord’s agent rather than to the landlord directly? And what if there is a dispute about liability, or the landlord considers the defect to de minimis, or the defect is better characterised as a nuisance rather than a breach of s.11? And are there any Equality Act issues which arise because of the requirement for a written complaint? The 6 month time limit is also interesting. On the hand, one can see how an eviction may cease to be retaliatory but on the other hand, what if a tenant has simply given up writing and has resorted to phoning or attending in person instead to get the work done? Would they be deprived of the benefit of this provision after 6 months has elapsed? It is difficult to see how a full blown trial could be avoided in these circumstances, which was probably not the intention of the drafters. It therefore seems that the involvement of the Environmental Health department is likely to be the more conclusive means of making out a defence to an accelerated possession claim.

It is clear that the bill will need some working out in order to overcome these (and doubtless numerous other) difficulties but it is an excellent proposal that we will continue to track closely.

The post Retaliatory Eviction and Law Reform by SJM appeared first on Nearly Legal: Housing Law News and Comment.

I did a talk at a conference on the topic of legal issues about the bedroom tax, it was basically a critical overview of the higher courts and tribunal (FTT and UT) cases. In case they are useful or vaguely interesting, my notes are here. (No jokes though. All the jokes were in the powerpoint, and I’m not putting that up.)

The notes are out of date already, though only a week old (though bits are recycled from my earlier notes).

A Scottish Upper Tribunal is to hear a room size case appeal on 18 September, while such appeals in England and Wales are stayed pending a test case. So we will see…

It also appears that article 8 separated family based cases appealed to the Upper Tribunal in England and Wales are also stayed or to be stayed, pending the hearing of the Liberty backed Judicial Review. And article 14 disability discrimination cases may perhaps be stayed pending the Supreme Court deciding whether to hear MA & Ors. The Scottish UT may well go right ahead, though.

The post Tribunals and Reviews and Appeals. Oh My! by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

Here are couple of new First Tier Tribunal decisions (also on the FTT decisions page).

A room use decision from St Helens – a room which had been used since the start of the tenancy as a dressing room/home office, and where a sewing machine was kept and used, was not a bedroom.

From Liverpool, an Article 14 discrimination case. Couple unable to share a bedroom by reason of disabilities. Room size argument dismissed as a) was being use as a bedroom and b) tenant had agreed on tenancy agreement it was a two bedroom property. On article 14, neither bedroom was big enough to hold two separate beds, even if this would have been suitable for the couple’s needs. While similar to Carmichael case on the facts (and thus part of MA & Ors in the Court of Appeal), the tribunal distinguished between a judicial review concerned with the policy issues behind the regulations, an a statutory appeal on the merits, to be approached and determined on its own facts. The facts here were as with Burnip/Gorry, save that these were adults not children, and Gorry had found unlawful discrimination. While there was a clear logic (in MA & Ors) in maintaining that children had a greater need for protection than adults, this simply meant that Gorry could not be automatically applied to adult cases. It did not mean that the principle in Gorry could never be applied to adults. The appellant did suffer discrimination and it could not be objectively and reasonably justified.

Comment

The room use decision is a bare ‘tenant use’ finding. There is no indication that the use of the room was reasonably required by the tenant. There are now two clear lines of approach by the FTTs to room use and I suspect that the Upper Tribunal will have to deal with this issue shortly.

The Article 14 case is interesting. The Tribunal accepts an argument on the distinction between the function and purpose of Judicial review and Tribunal proceedings, similar to that argued in the Carmichael FTT, but curiously, there is no reference to the position on DHP at all. It is not even mentioned whether the appellant was in receipt of DHP. That is not so much side-stepping MA & Ors as ignoring it altogether (despite the repeated references to it throughout).  If DHP was not in payment, which may be the case, it would make the FTT’s finding of unjustified discrimination clearer (and less abrupt).

Forthcoming

I understand that the Scottish Upper Tribunal on the Nelson case (room size, primarily) did indeed go ahead on 18 September. The judgment is eagerly awaited….

The post Bedroom tax bits by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

This is not exactly a housing law post, though the operation of housing law runs through it at an angle. It is more of a snapshot of the present reality of social and private housing, at least in London, traced through the history of a remarkable group of single mothers in Newham. And I must pay credit to the tireless work of journalist and campaigner Kate Belgrave (who also tweets as @Hangbitch) in pursuing this story, as there is much more to it than my brief account.

Photo: David Levene for The Guardian

In 2013, a number of homeless single mothers with very young children were accommodated in a ‘foyer’ hostel by Newham Council. All were in priority housing need. The hostel was run by a Housing Association, which also apparently provided ‘lifeskills’ courses. Conditions in the hostel were not great. There was mould, overcrowded rooms, broken sinks and so on. But it was in Newham, and they had hopes of getting a permanent place down the line. The accommodation as supposed to be for 6 months or so, but some had been there for years.

But then things changed. Newham decided that Supporting People funding was going to be cut. This funding was partly paying for the hostel accommodation. And Newham changed its allocation policy to prioritise those who were working, post Localism Act 2011. And Newham also changed its homeless policy to say that only in exceptional situations would homeless accommodation be offered in borough (the legality of this has not yet been tested, but given DCLG Guidance and the Homelessness (Suitability of Accommodation) (England) Order 2012, I’d say it sounds pretty unlawful).

So, suddenly the women were facing losing their accommodation, had notices to quit served, and were being offered accommodation out of borough (‘out of borough’ as in Birmingham, Hastings and Manchester) by Newham. Newham were clear – and blunt – that there was ‘no affordable accommodation’ in borough. Not in social housing, because that was being prioritised for working households, not the homeless, and there is a 24,000 waiting list. Not in the private sector, because rent levels and the benefit cap meant that there was no private accommodation that any of the women could afford. Local Housing Allowance would simply not meet the rents demanded, particularly with the benefit cap in operation.

The women faced (and continued to face until very recently) being stuck in accommodation 100s of miles from their home borough and support networks, even if they get to bring a suitability challenge to the accommodation. As any housing advisor knows, it is far, far too risky to refuse a property as unsuitable, with the risk of homeless duty simply being discharged, rather than accept it while asking for a review. That at least preserves the housing duty, whatever the outcome of the review decision.

(I am tempted to remind people that Andy Gale was based at Newham in his ‘not official at all’ DCLG role in telling Councils how to avoid housing the homeless.)

But the women organised themselves. First in reaction to the conditions in the hostel, and then to their perilous housing situation, then to housing conditions in Newham. They called themselves the Focus E15 group. They are still going, and still arguing.

It has taken a year or more of organisation, of protests and public campaigning. But in the face of this, it appears that Newham and the Housing Association landlord have ‘withdrawn’ notices to quit previously served, and agreed to find in borough accommodation (albeit that this turned out to be £1000 per month PRS accommodation with leaking roofs and gaps between the walls and the floor, which is arguably an inadequate discharge of duty in the PRS under Localism Act 2011 requirements. Newham are supposed to ensure the standard of any PRS accommodation offered in discharge of duty).

But of course, this is only a (potential, uncertain) solution for this organised group. Hundreds, thousands of other households face the same problems and treatment, and do so alone, unassisted.

The Focus E15 group are well aware of this. The campaign have just occupied an empty flat on a Newham Council estate near the former Olympic site. The estate has been steadily emptied by Newham, with only a few properties left occupied by tenants, as Newham intended to sell the land. Sale deals have fallen through, leaving the bulk of a 600 home estate vacant for years, adapted properties and all. Whatever the purposes in selling the land (and it must be said that Newham have made as yet unrealised promises about a substantial house building programme), it cannot be denied that empty, habitable council properties left vacant for a speculative land sale are a potent symbol of the current crisis in London.

So this is where we are. The homeless, in priority need and with nowhere else to go, face being thrown out of their temporary accommodation due to funding cuts, and shipped 100s of miles away. A council’s (possibly unlawful) policy is to ship its homeless out of London, unless the case is ‘exceptional’ (and plenty of others have the same policy, if less officially so).

Out of borough accommodation is used as a threat to make the homeless go away, without bothering the Council. Social housing is prioritised for those in work (and maybe resident in the area for 2, 5 or 10 years), not the most immediate housing need. And the private sector is simply unaffordable due to LHA cuts and the benefit cap.

While the Focus E15 group, through remarkable efforts of organisation and campaigning, might possibly have improved their own prospects of being able to live in their own local area ( in poor PRS accommodation), the crisis continues to rage on for every other homeless person, or household in housing need, in London and elsewhere. To their absolute credit, the Focus E15 group continue to campaign to highlight this. What is dismaying is that nobody else seems to realise or be prepared to highlight quite how desperate the situation has become.

 

 

The post The way we live now. by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

The post Not enough information: Bedroom tax and disability discrimination by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

The post Downloadable archives by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.

The post Bedroom Tax: Upper Tribunal on Article 14 by Giles Peaker appeared first on Nearly Legal: Housing Law News and Comment.