LAG housing law

Andrew Arden QC and Annette Cafferkey discuss the Government’s proposal to require private sector landlords to check the immigration status of their tenants.

Introduction

In March this year, the Prime Minister made a speech on controlling immigration and welfare reform, in which he expressed the view that Britain was a “soft touch” and, as a result, was attracting a disproportionately high number of immigrants. In order to counter this, he said that a multi-faceted approach was necessary. It could not be left to the Home Office; rather, in his view, control should also be exercised through the welfare system, the healthcare system and through housing policy, so as to disincentivise immigrants from coming to UK.

On the subject of social housing, Mr Cameron said “we cannot have a culture of something for nothing. New migrants should not expect to be given a home on arrival. And yet at present one in ten social lettings go to foreign nationals. So, I am going to introduce new statutory housing allocation guidance this spring to create a local residence test.” Two obvious points arise: first, the statistic that one in ten social lettings go to foreign nationals has no relevance to the apparent need for a local residence requirement unless we know how long those foreign nationals had been residing in an area before obtaining social housing; secondly, the current statutory allocation provisions and guidance already enable local authorities to have regard to an applicant’s local connection in determining how the allocation of social housing is prioritised. What difference will yet more guidance make?

Still more controversially, Mr Cameron went on to say that “right now, today it is too easy to be an illegal immigrant in Britain. It’s too easy to get a driving licence, get a house without a check on your immigration. So we are legislating to make sure illegal migrants can’t have driving licences….I now want us to make sure that private landlords check their tenants’ immigration status with consequences for those rogue landlords who fail to do so.”

In effect, the Government intends to turn private sector landlords into quasi-immigration inspectors. As most housing practitioners and most lawyers will agree, immigration law is highly complex and difficult to navigate. One wonders if such a scheme is realistic or whether it is doomed to inevitable fiasco.

Realistic or not, the idea is firmly on the Government’s agenda. It was implicitly alluded to in the Queen’s Speech on May 8, 2013 by reference to a new Immigration Bill. The background briefing notes to the speech state that the “main benefits of the Bill would be stopping immigrants from accessing services they are not entitled to,” including by requiring “private landlords to check the immigration status of their tenants.”

How will this work in practise?

What shape will this new proposal take? The Government has repeatedly said that it has no intention of introducing new regulations in the private rented sector, or “additional red tape”: see the DCLG website which explains the Government’s position by stating (on June 13, 2011) that the “private rented sector is already governed by a well established legal framework and we will not introduce any further regulations. This will ensure that the sector is free to grow in response to market conditions. In the past over-regulation drove landlords out of the rental market. We don’t want to introduce any measure which would form a barrier to potential landlords considering renting out their properties. Over regulation would reduce the number of properties to rent and wouldn’t help tenants or landlords…..Councils have a wide range of powers at their disposal to tackle the minority of rogue landlords who fail in their responsibilities. We are working with them, to ensure that any barriers to their using those powers are lifted.”

The policy of not increasing red tape in order to promote and maintain a free market economy in the private rented sector is plainly inconsistent (and not sustainable) with its decision to impose a requirement on landlords to conduct immigration status check before letting their properties.

A recent DCLG news release (May 8, 2013) referred to the new proposal under the sub-heading of “Rogue Landlords”. In earlier guidance to local authorities, Dealing with Rogue Landlords (August 2012), which was on its face primarily concerned with the enforcement of housing standards, the foreword stated that “false promises of work and accommodation are the key means by which illegal migrants are tempted to the UK and then exploited. The activities of rogue landlords helps fuel illegal working and benefit fraud and the harmful effects go beyond those individuals whom them exploit. The victims…are also the wider community…whose local services are robbed of resources. Further, allowing the development of a “shadow” housing market carries wider dangers to public health and community relations.”

Adding it all together, it appears that we have a new description of rogue landlord as including someone who provides accommodation to illegal immigrants and, once the new provisions are in force, as someone who fails to check on the immigration status of his tenants. This is a very long way from a traditional use of the phrase and undermines it in the sense that it takes a concept – the rogue landlord – on which all are agreed and replaces it with one on which there will be divided opinions, for while many people are opposed to illegal immigration, few see immigration control as the business of a landlord: so far as those few will include many local authorities, the effect is to water down rogue landlordism as a universal and priority target.

Of course, targeting “rogue landlords”, will result in increased homelessness – those who are unlawfully accommodated will be evicted with little or no hope of any accommodation elsewhere. The DCLG guidance advises local authorities, in relation to homelessness arising out of their efforts to tackle rogue landlords (as that expression is being used), to “consider reconnecting migrants to their home country especially where the alternative is for them to become destitute and sleep rough. Authorities may also wish to consider the provision of short-term accommodation (‘reconnection beds’) where people have volunteered to return home to prevent rough sleeping. Local authorities will want to work closely with voluntary sector partners to ensure that anyone displaced from beds in sheds or other unsuitable accommodation is picked up. Local authorities should work closely with the UK Border Agency who will be able to confirm which individuals have illegal immigration status and take action.”

What of the landlords? What will be expected of them? Will they be expected to decipher any number of immigration documents? Will they be expected to understand immigration law? Will they be prosecuted if they fail to carry out the necessary checks or misunderstand or misapply the law? Currently, employers have to check the immigration status of prospective and current employees by inspecting documents detailed in an approved Home Office list. Failure to carry out the required checks may result in a maximum fine of £10,000. In addition, it is a criminal offence knowingly to employ an illegal worker, the maximum penalty for which is two years custody and/or an unlimited fine if the matter is dealt with in the Crown Court. If something similar is implemented in relation to private sector landlords, it is inevitable that many will simply refuse to let accommodation to foreign nationals for fear of prosecution.

Conclusion.

It is likely that the immigration proposals will be implemented. How they will be enforced is not yet clear but looking at some of the discussion around this issue, it appears that the principal responsibility for enforcement will probably fall to local authorities. Homelessness, which is already on the increase, will undoubtedly increase further, as will the level of destitution that we see in the streets.  But then, the idea was to put people off the UK, wasn’t it?

Andrew Arden QC argues the case for re-introduction of fair rents in the private sector as the obvious, easiest and best way to reduce social security expenditure.

A Brief History of Control

Rent control, as effected from 1915 to 1957, was essentially based on historic rents, subject to prescribed permissible increases and additions, backed up by security of tenure; the Rent Act 1957, in an effort to stimulate the private rented market, ended control for new lettings and led to – for one thing – the largest recorded loss of rented accommodation and – for another – the worst excesses of bad landlordism, characterised as Rachmanism (after its best known practitioner, Perec Rachman).

Following a “holding” Protection from Eviction Act 1964, the Rent Act 1965 (later consolidated into the Rent Acts 1968 and then 1977) introduced the “fair rent” system – likewise backed by security of tenure – under which a Rent Officer (on appeal, a Rent Assessment Committee) determined and registered the appropriate rent for a property (after a fairly short while, using the body of “comparables” which quickly built up), at the core of which was the obligation to disregard “scarcity” (i.e. it was to be assumed that there were no more tenants seeking types of dwelling than there were available properties. The word “fair” did not appear in the legislation; it was how the role of the Rent Officer was described by the government minister in charge, Richard Crossman).

Security has always had its exceptions, in particular furnished lettings were outside all security until 1946, then brought within the limited jurisdiction as to rents and security offered by the Rent Tribunal, finally brought into full security in 1974, when the concept of the letting by a resident landlord was introduced as the principal alternative exemption. There has also long been provision to allow people to rent out their own homes when away for extended periods and recover them as of right when their circumstances change (by way of a “mandatory” ground for possession, i.e. with no discretion vested in the court to refuse an order on the ground of reasonableness). Likewise, specific landlords have either been altogether exempt or able to recover possession as of right in identified circumstances.

Under the Housing Act 1980, two measures were introduced to try to stimulate the private rented sector. First, security was undermined by the introduction of the protected shorthold tenancy which could be terminated by service of a notice giving rise to a mandatory ground for possession. Secondly, the original form of the “assured” tenancy was introduced, allowing market rents for new properties built for renting. While the former cheered up landlords who could now get their properties back at will, the latter did nothing to enhance the stock of rented homes.

Finally (so far as relevant), we had the modern form of assured tenancy, under the Housing Act 1988, with less security even for the fully assured, and none for the assured shorthold tenant, and market rents for both of them, controlled only by the possibility of reference to the Rent Assessment Committee (in the case of a fully assured tenant, only if the landlord seeks an increase). The Housing Act 1996 reversed the default position – in effect and in most cases, a letting is shorthold unless notified to the contrary – but otherwise did not change the basic position.

Certainly, this has had some effect on the market; in particular, it has stimulated the buy-to-let market such that, in some areas, a property with vacant possession is now no more valuable than one with a sitting assured tenant. Nonetheless, there remains a very considerable shortage of housing, in particular housing to rent, and prices in some areas are – to be forgiven the pun – through the roof (London rent rises are reported to be at four times the rate outside London). Accordingly, scarcity remains in the driving-seat of what comprises a market rent: there is no other explanation for these regional variations.

It’s quite simple, really. Rents are – and will remain – “unfair” so long as the overwhelming bulk of the income fails to be redirected (either by landlords or by taxation) into housing itself. Housing is an absolute necessity – we cannot manage without it; nor can we bank on its provision by the market (in part, because limited land means that land use itself must be controlled; in part, because the return on investment in housing takes so long – decades – and is so susceptible to changes – demographic and political – that it is uncertain and unattractive to many investors, i.e. there just isn’t the confidence; in sum, because the evidence is overwhelming that it does not work, which is why whenever we read of a prospective change of attitude, it never comes to fruition). It is the antithesis of “fairness” for such a finite resource to be prey to unregulated profiteering: We do not allow it of water, power or even communications – why do we allow it of housing?

A Brief Synopsis of the Argument

It is not merely common ground that the social security bill needs to be constrained as unchallengeable: no one would set increasing it as a target for its own sake! The argument is about how constraint is to be achieved. Following the introduction of fixed limits on universal credit, the new talk is of setting an absolute cap for social security expenditure, regardless of need, regardless of prices, regardless of numbers. Not only is this the government plan but it has been reported that the opposition is considering following a similar path.

The opposition has also begun to disclose its proposals for – among other matters – housing: according to Inside Housing (May 3, 2013), these include powers to crack down on bad private landlords, a national register of landlords, tackling inconsistent letting agency fees and increased security. All vaguely good stuff, I guess, though even on its face meagre fare at least unless and until some meat is put on its bones.

What it does not do is address private sector rents (on which housing benefit or the housing element of universal credit is paid); nor, in the omission, does it make the contribution it could to the accepted need to bring down the overall social security bill: there is not a word on limiting rents, though it is as plain as can be that – in addition to building much, much more social housing – there is no single measure which could make that contribution without generating more of the brutal consequences to families which we are already beginning to witness and which are – likewise plainly – going to increase until (if this is ever reached) a breaking-point at which not the victims have “had enough” but the remainder of the population – those who do still have jobs and homes – find the sight of it too hard to bear, i.e. a sort of return to Cathy Come Home.

Why is no one willing to address rent limits? Part of it may be the numbers game: there are a lot of “small landlords” many of them new to the market with only one or two properties, some who have inherited property and decided to let it out rather than sell it, some who have invested as pension provision, many who have bought with mortgages which limit their letting powers to assured shortholds, all of them with a vote. But it is not necessary to adopt an all-or-nothing approach. Such landlords are not the enemy, there is no need to penalise them, either as a matter of policy or as a matter of law. This is why I referred earlier to exemptions from security: there is no reason at all why existing individual (non-corporate) landlords with only a limited number of rented properties could not enjoy an exemption, at least so long as pre-legislation tenancies are concerned, if needs be on a time-limited, transitional basis.

It is the reintroduction of fair rents for which I am arguing, not (necessarily) the reintroduction of security: they might once have gone hand-in-glove, but they do not always need to do so. Even if lower rents do lead buy-to-rent landlords to leave the market (which does not automatically follow – assuming their mortgage costs are covered, many will stay to achieve the long-term rise in equity), then at the least it will put more vacant property into the owner-occupied market which will in turn drive down purchase prices, which still makes a contribution to reducing the problem. The market will deal with it, much as flats continue to be built notwithstanding enfranchisement and extension (at what is also below a market value).

If numbers is not the final answer to the question posed at the beginning of the last paragraph, then what is? For sure, it is not the success of current policies. The alternative has to be the power of existing institutional landlords and investors but, at risk of repetition, if their power is not that of the housing argument in favour of market rents it can only be economic power itself – which allows me neatly to end this section where I ended the last: it is the antithesis of fairness.

A Brief History of Common Sense

(No, the posting hasn’t gone wrong; it’s just that there’s nothing to say).

Andrew Arden QC and Annette Cafferkey consider the direction in which public sector housing is being taken both in Wales and England and conclude that, in England potentially, much of its social character will be lost.

Introduction
In a recent editorial for the Journal of Housing Law, Caroline Hunter questioned why there had not been any recent government focus on the problems which afflict private rented sector, in particular, the problems brought about by lack of security and rising rents (‘Where next for the private rented sector?’ (2013) JHL 16(2)). She noted that the Welsh Assembly Government had recently returned to the Law Commission’s work on Renting Homes (in particular Renting Homes 1: Status and Security (2002) and Renting Homes: The Final Report (2006)), in the light of its commitment to introduce a housing bill modelled closely on the Law Commission’s proposals.

The Law Commission’s proposals were formally rejected for England by Westminster in May 2009. If one reflects on the changes and policy proposals that have been effected in relation to English Housing law since then, it is clear that England and Wales appear to be moving in very different directions on social housing.

Renting Homes: a summary of the Law Commissions proposals
The law of residential letting is complex, detailed and multi-layered. Its complexity gives it a bad reputation with landlords and tenants, as well as more generally. It is difficult to understand, outcomes of disputes are routinely uncertain, and the disputes themselves invariably expensive.

One of the principal aims of the Law Commission’s proposals was to codify and simplify the area of law by permitting only two types of regulated contracts, to be used by all rental providers. All such contracts would be known as ‘occupation agreements’. The distinction between lease and licence would be consigned to history. The agreements would come in two forms: the ‘standard contract’ (a non-secure form of occupation, akin to the assured shorthold, conferring a fixed term, upon the expiration of which there would be no security of tenure), and the ‘secure contract’ (a form of occupation which only be terminated if the occupant is found to be in breach of the contract and if eviction is determined by the court to be reasonable and proportionate). Model agreements, for each form of occupation, would be prescribed by statute.

An important feature of the proposals was ‘Landlord Neutrality’. The nature of the landlord would no longer be part of the definition of the tenancy. With regard to social landlords, no distinction was to be drawn between local authorities and private registered providers. Both would generally be required to use the secure contract (unless, for example, occupation was to be on an introductory/probationary basis or by a key worker, when a standard contract could be used). If occupation was secure, there would be no mandatory grounds for possession.

In its consultation paper Renting Homes 1: Status and Security (2002), the Law Commission observed that social housing:

… is designed to provide long-term housing for tenants who, for a variety of social and economic reasons, are particularly vulnerable within the housing market. The creation of sustainable communities relies on confidence by tenants that, if they keep to their terms of agreement, they will keep their long term family homes. The secure tenancy regime, with a high degree of security, provides tenants with confidence in the near-permanence of their housing.

In its final report (Renting Homes: The Final Report (2006)) the Law Commission was clear: the public sector should provide secure contracts of occupation, provided on a periodic basis. Such a contract would provide ‘a security gold standard for use in the social sector’.  Further, ‘to allow fixed term secure contracts would at best muddle the picture, and, at worst, undercut that objective’.

The Law Commission reiterated these principles recently, when asked by the Welsh Government to review and update its proposals in the course of the reform of Welsh housing law, stating (Renting Homes in Wales (April 2013)) that ‘security is a hallmark of social lettings and it is entirely appropriate that there should be judicial oversight of evictions from the social sector’. In relation to anti-social behaviour, whilst noting that Wales had recently decided to follow English proposals to adopt a mandatory ground in response to such behaviour (subject to any reconsideration in the light of the Law Commission’s proposals), it concluded that the use of ‘a robustly drafted ground for possession’, together with the exercise of ‘structured discretion’ in possession proceedings, may prove more effective than a mandatory ground in securing speedy eviction.

The English direction
The recent changes and policy proposals in relation to English housing law have been discussed here before, in the post Social housing and the ‘deserving poor’.

Local authorities are encouraged to adopt allocation policies that effectively disregard the homeless (the most vulnerable) who are, instead, to be accommodated in the private sector; fixed-term ‘flexible’ tenancies abandon lifelong security as much as shortholds virtually ended the (fully) assured tenancy in the private sector; in his recent budget, George Osborne outlined plans to charge market rents for their homes to social tenants with an annual household income of more than £60,000. As noted by CIH in its response to the consultation about these proposals, to allow for the introduction of full market rents could mark a move in favour of the decline of social landlords as social providers, and a shift to a more market-driven approach.

Conclusion
In England, many of the recent changes and policy proposals obscure almost entirely the social aspect (as it is generally understood) of social housing. The move to ‘flexibility’,  the increased use of the private sector to meet public sector housing obligations, fixed-term tenancies and the likely introduction of market rents in the social sector muddy the waters between the private sector and social sector, confusing social provision with market provision. Not only has the – far from perfect – private rented sector not been the focus of any recent scrutiny by the Westminster government, some of its less than welcome features have been carried over into the public sector.

It is not difficult to see why the current economic conditions have made housing an easy target for such measures; nor is it difficult to suspect that there is unlikely to be any retrenchment from them. The effect is to make the private sector the prime provider across the spectrum, not merely – as it has been – for those who are better able to cope with its inherent shortcomings, and/or who do not want long-term security. The question for the immediate future is how much further erosion of the social rented sector will go in England, while the Welsh continue to fortify the foundations of a thriving social housing sector.

Andrew Arden QC and Annette Cafferkey consider section 144 of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012 and the possibility of its extension to commercial premises.

Introduction

The offence of squatting in a residential building is set out in section 144 of LASPO. It came into effect on 1 September 2012. In the early part of this year  (14 January 2013), an Early Day Motion was tabled by Mike Weatherley MP for the ambit of the offence to be extended to commercial premises.

The new offence has been in place for six months. What has its impact been, if anything? And, in these times of rising homelessness and cuts in housing benefit, is it appropriate to criminalise squatting of empty buildings?

The offence

A person commits an offence if (a) he or she is in a residential building as a trespasser, having entered as such, (b) he or she knows or ought to know that he or she is a trespasser, and (c) the person is living in the building or intends to live there for any period. The offence is not committed by a person holding over after the end of a lease or licence. ‘Building’ includes any structure or part of a structure (including a temporary or movable structure); a building is residential if, before the person enters, it had been designed or adapted for use as a place to live (s114(3)).

Background

Research carried out by the Centre for Regional and Economic Research and published by Crisis in September 2011, Squatting: a homelessness issue, indicated that:

• squatting was a common response to homelessness, with evidence suggesting that 40% of homeless people squat;
• most homeless people who squat try to resolve their housing issues using other avenues before resorting to squatting;
• many squat as a last resort, when the only alternative is rough sleeping;
• squatting typically reflects a lack of other options, scarcity of provision and inadequate support and assistance for single homeless people;
• many squatters have significant welfare needs: 34% of homeless persons who squat had been in care, 42% had physical ill-health and 41% reported mental health issues; and
• homeless people who squat occupy empty, usually disused or abandoned property, not other people’s homes.

This material was hardly the basis for the creation of any new, squatting-related offence. The impetus for the new offence was, rather, media-driven –  particularly by some parts of the populist press – in 2011. This media coverage, much of it backed by the comments of a very small number of MPs, asserted that squatters were commonly occupying other people’s homes – contrary to the research – and that those who refused to leave someone’s home were not committing a criminal offence, and that home-owners were very often powerless to throw squatters out, which was simply wrong: section 7 of the Criminal Law Act 1977 provides that any person who entered any premises as a trespasser and who refused to leave on being requested to do so either by a displaced occupier or by a protected intending occupier (each as defined, with the effect that all those affected are included), commits a criminal offence.

This allowed such squatters to be prosecuted, which meant that they could be arrested and removed by the police. In addition, and in any event, there have for decades been fast-track, summary civil proceedings which could be used to secure eviction and re-possession, typically, within a few days.

All of this was ignored by the press, who claimed that homeowners faced weeks of civil proceedings to regain their homes and that trespassers had ‘squatter’s rights’. In response, a number of housing practitioners and academics wrote an open letter to the Guardian in September 2011 which set out their concerns about the misleading coverage and its adverse effect on public debate, together with an accurate summary of law as it stood then. That letter concluded that ‘as the proposals would have far reaching consequences for many vulnerable people, there is a need for informed factual discussion rather than a response based on sensationalist misrepresentation’.

It is, however, apparent, that fully-informed, factual discussion did not take place before the new squatting offence made it on to the statute books. Thus, the Ministry of Justice consulted on a change to the squatting laws in mid-2011: in the first paragraph of its consultation, Options for dealing with squatting, the Government made clear that it had no real idea of the extent of the problem, noting that ‘there was very little information held centrally about the number of people who squat, their reasons for doing so or the types of buildings that tend to attract squatters’. Nonetheless, they believed it to be a ‘growing problem’.  On any view, this was a startling basis for new law.

A summary of the 2,217 responses to the consultation was published on 26 October 2011. Of those responses, 2,126 were hostile to the further criminalisation of squatting, albeit that the majority (1,990) had been organised by Squatters’ Action for Secure Homes (SQUASH). Other responses came from an assorted range of people and organisations, eg victims of squatting (10), members of the public concerned about the harm squatting can cause (25), legal professionals and law enforcers (24), charities (13), as well as local government and landlord associations (11).

Those in favour of the new offence included individual property owners, a commercial developer, the British Property Federation, the CPS, the Property Litigation Association, Transport for London and The Fire Rescue service. Those against included homelessness charities and advisory services, the responses organised by SQUASH, the Metropolitan Police, the Criminal Bar Association, the Law Society and the Magistrates’ Association.

The Law Society stated that the current law was both comprehensive and effective and that the proposals in the consultation were based on misunderstandings by the media of the scale of the problem and the current law) and argued that in the absence of reliable data it could not be demonstrated that a new offence was either necessary or proportionate, a view also taken by the Criminal Bar Association.

The Magistrates’ Association said that it ‘was generally reluctant to see new laws being created without proper analysis of why existing powers might not be working’ although they could see the case for a more comprehensive set of provisions to deal with issues associated with squatting (which is not the course that has been followed: the 1977 Act offences remain on the statute book alongside section 144; civil remedies continue to be handled separately, etc.).

In response to the question whether those who squat share any protected characteristics (Equality Act 2010, eg age, disability, pregnancy and maternity, race or religion), Crisis noted that there was a ‘significant number of vulnerable homeless people squatting – people who have mental or physical ill health, disabilities, dependency issues and a history of being in care’. And that ‘whilst homeless people have higher incidences of vulnerabilities and multiple needs than the non-homeless population, homeless squatters were found to be yet more vulnerable – with higher incidences of vulnerabilities that the wider homeless population’. This clear basis for rejecting new laws has at no stage been contradicted by anyone.

The homelessness charities, including Crisis, Shelter, Homeless Link and the Simon Community, warned more generally that the criminalisation of squatting would impact significantly on the most vulnerable in our society (SQUASH (2011), House of Lords Briefing Paper with respect to Legal Aid Bill Clause 130).

Confronting responses which revealed no other consensus of opinion, the Government decided to take a ‘qualitative rather than a quantitative’ approach, which avoided having to give proportionate weight to the responses which opposed the proposal, and, ‘as a first step’, to criminalise squatting in any residential premises, ie to criminalise the act per se, even if not asked to leave (which was already criminal under the 1977 Act,  see above). It therefore tabled an amendment to the LASPO bill at its third reading in the Commons on 31 October  2012 (a mere five days after the response to consultation document was published). The late stage at which this was done meant that the proposal was not scrutinised at Committee stage and was only debated in the Commons on the bill’s third reading, a paltry basis for a new criminal offence.

Impact?

The lack of any sound basis for this new offence makes the question whether it has actually made any positive difference all the more pertinent.

Establishing the extent to which it has been enforced is, however, no easy task as it appears that many police forces treat the offence as non-notifiable/recordable. Freedom of Information requests made by SQUASH, together with information taken from the media and other squatters’ organisations, show that 108 people were moved or made homeless after incidents involving the police attending at properties to investigate offences under section 144. Of this number, 33 people were arrested, and 10 convicted. It is believed that all of those arrested were occupying empty and vacant spaces – none displaced a resident homeowner (SQUASH (2013), The case against section 144).

 These figures are low. The squatting population is estimated to number about 20,000. Taking this figure together with the fact that the enforcement of the offence is not routinely recorded by many police forces probably means that the enforcement the figures are conservative. The low figures do, however, suggest that squatting is not quite the problem parts of the press had us believe.

Anecdotally, it appears that social landlords and the police are commonly ‘co-operating’ to use the existence of the offence to achieve repossession without needing to take the matter all the way to trial – criminal or civil. After arrest, it is said that many squatters are given police bail on the condition that they do not return to the property in question, opening the way for the landlord to recover possession, either by civil proceedings which are difficult to defend when not actually in occupation (let alone for which to get public funding) or by peremptory action, unfettered by the statutory residue of the old and repealed offence of forcible entry (Forcible Entry Act 1381) to be found in the Criminal Law Act 1977 s6, which prohibits using violence (without lawful authority) to secure entry into premises

provided that–

(a) there is someone present on those premises who is opposed to the entry which the violence is intended to secure; and

(b) the person using or threatening the violence knows that that is the case.

Given that both landlords and police are public authorities for Human Rights Act 1998 purposes, that concerted action may raise issues under the Convention: no one who has read the European jurisprudence on eviction from a home – which can include occupation as a squatter – seriously doubts that, once the issue reaches Strasbourg, it will not endorse eviction by public authorities otherwise than by court proceedings, although the domestic courts may take a different view until told otherwise.

That aside, this apparently widespread tactic may be another way of explaining the low figures described above and/or may explain why the police are not routinely keeping relevant records.

Conclusion

The authors agree with the Magistrates’ Association: there is a case for codification and clarification. Rather than improve practice and procedure in relation to squatting law, however, the Government chose only to create a new offence. What difference has this made in terms of reducing the incidence of squatting?  The Government does not know: it did not know how extensive the problem was before it implemented the new offence and it does not know now; it has not asserted – because it cannot assert – that the offence has made the slightest difference. Indeed, as it is apparent that squatting is (unsurprisingly) primarily a homelessness issue, we can confidently assert the opposite, that it will increase as a result of increasing homelessness (see, in particular our recent blog, Challenging the use of B&B, 24 February 2013). Measures to address homelessness are the real antidote to the problem of squatting as a whole (whether or not there really is a sub-set of people who squat homes occupied by or allocated to others), and the only effective antidote.

Meanwhile, we are left with the proposal to criminalise the occupation of empty commercial property: if the Government responds to it in the same way as it responded with section 144, neither the absence of any recorded problem nor of any explanation as to why the current civil law is not sufficient (or if insufficient, why it cannot be improved), nor the lack of any material on the basis of which to suggest that section 144 itself has had any real effect (otherwise than when misused to allow social landlords to recover property peremptorily as described above), will stand in its way and yet more unnecessary, confusing and underused legislation will creep onto the statute books and continue a campaign against those who are most in need of help not prosecution.

Andrew Arden QC and Annette Cafferkey consider the soaring and unlawful use of B&B accommodation to accommodate homeless families and conclude that, in the current economic and political climate, there will be no alternative to legal action.

Introduction – statistics

The most recent official figures (Statutory Homelessness: July to September quarter 2012 England (DCLG)) show an increase of 11% on the same quarter for 2011; in turn, this is a 34% increase on the same quarter for 2009, the year in which – for the first time since 2003 – homelessness numbers began to rise.

At the beginning of 2011, 48,240 homeless households were in temporary accommodation; by the end of September 2012, this figure had risen to 52,960.

One of the most worrying aspects of this trend lies in the increased use of B&B accommodation. By the end of 2009, of 53,370 homeless households in temporary accommodation, 1,880 were in B&B; by September 2012, some 4,350 out of 52,960. Nor is the increase solely in numbers: the proportion of homeless households in B&B is rising: as a percentage, the 2009 figure amounts to 3.5% of the total; the 2012 figure, 8%, i.e. more than double.

According to Homeless Bound? Homelessness in London, the South East and East National Housing Federation, November 2012, of the 2012 homeless in B&B, 1,660 were households containing children or pregnant women, a 60% increase on the same quarter for 2011; 36% of those had been in B&B for six weeks or more; over the last two years, the number of such households in B&B for six weeks or more has risen by over 200%; no data is collected on the length of stays in B&Bs beyond the six week mark – no one knows how long families really stay in this type of accommodation.

Two questions arise: first, what, if anything, is the government doing to address the escalating use of B&Bs to accommodate homeless families; and, secondly, what can be done to challenge an authority which persists in housing a homeless family in B&B accommodation.

Government response

It is worth pausing here to consider what happened last time the use of B&B accommodation posed a significant problem: the number had risen steadily through the late 1990s, reaching a high point of 13,240 at the end of 2003. In May 2001, the then government announced the establishment of a taskforce, the “B&B Unit”, the primary aim of which was to help homeless families out of B&B; subsequently, it became part of the Homelessness Directorate which worked with assorted agencies to implement a £35 million programme intended to ensure that – by the end of March 2004 – no homeless family with children had to live in B&B accommodation save in an emergency, and in any event for not more than six weeks.

In December 2002, the government announced its intention to outlaw the use of B&B hotels for homeless families save in emergencies. The following year, the Homelessness (Suitability of Accommodation)(England) Order 2003 (2003/3326) was made, coming into force on April 1, 2004, which made it unlawful for authorities to comply with their duty to provide suitable accommodation in relation to homeless families – defined to mean those containing children or a pregnant woman – by using B&B accommodation for a total period of more than six weeks.

By May 2004, figures collected by ODPM showed a 99.3% reduction in the number of such homelessness families living in B&B accommodation for longer than six weeks. The strategy had succeeded at a fell swoop and – broadly – continued to succeed until recent times.

The current government has, so far, not formulated a targeted response to address the increasing use of B&B accommodation beyond its legal limits, even though the increase has persisted since 2009, preferring to focus on rough sleepers (Vision to End Rough Sleeping: No Second Night Out Nationwide DCLG (2011)) and homelessness prevention (Making Every Contact Count: A Joint Approach to Preventing Homelessness DCLG (2012)). While the new Housing Minister, Mark Prisk, had reportedly promised to ensure that the use of B&B accommodation would not become an “insurmountable problem” (Inside Housing, September 20, 2012) there is no news of anything specific to address the problem: it is apparent that the government is hoping that the use of private sector accommodation will alleviate the problem (Grant Shapps, then Housing Minister, HC Deb. May 23, 2012).

This is, in our view, a vague and forlorn hope. As noted by The Homelessness Monitor: England 2012 (published by the Institute for Housing, Urban and Real Estate Research, Heriot-Watt University, the Centre for Housing Policy, York University, and Crisis) “almost all of the Coalition Government’s welfare reforms” will be “problematic with respect to their implications for homelessness, to a greater or lesser degree”. Thus, even though the private rented sector has doubled in the last 10 years (English Housing Survey: Headline Report 2009-2010 DCLG), which would suggest that it ought in theory be available to overcome the problem, the recent homelessness DCLG figures show that the volume of homelessness coming from this sector is already on the increase: homelessness resulting from the termination of assured shorthold tenancies rose by 103% across England (and by 156% in London) in the two years to 2011/12 (The Homelessness Monitor: England 2012). It is inevitable that this will dramatically increase once housing benefit caps apply.

Of course, these changes are occurring against a backdrop of insufficient affordable housing. London Councils (which represents the 32 London Councils) has warned that by 2020 the city will be short of 221,700 for homes for “the poor”; it also noted that the supply of temporary accommodation in the private sector is dropping “dramatically”, supporting our conclusion in the last paragraph.

Given increased demands on the private rented sector, rising rents and a shortage of affordable housing, it is impossible to see how the government’s policy of resort to the private sector to meet housing duties will actually work in practice.

The increased use of B&B hotels to accommodate the homeless is accordingly and on the face of it certain to continue.

Challenging the use of B&B accommodation

That leaves challenge as the only way forward.

An authority only complies with its duty to secure accommodation for the homeless if that accommodation is suitable (Housing Act 1996, s.206). The Homelessness (Suitability of Accommodation) (England) Order 2003 2003/3326 provides that B&B accommodation may only be considered suitable for the homeless with “family commitments” – defined to mean households containing a child or a pregnant woman – if the accommodation is not occupied for a period (or a total of periods) not exceeding six weeks. B&B beyond this point means – simply – that the authority is not discharging its duty and is therefore acting unlawfully.

This is, then, a clear basis for challenge, either in the High Court by judicial review in relation to the interim duty pending enquiry or in the County Court by appeal under s.204 (and s.204A if no other accommodation is offered pending the appeal) otherwise.

A shortage of housing resources is not a defence to such proceedings. The question, then, becomes whether the courts will make mandatory orders requiring authorities to provide suitable accommodation and, if they do so, how much time will be allowed, against what we may assume will be the plea that authorities simply cannot make sufficient other accommodation available.

The reality, however, is not that it cannot be found so much as that authorities will claim that they cannot afford it, although
“[counsel for the authority] rightly accepted that, if the law was as the Court of Appeal said it was, the authority will have to comply” (Lord Carnwath in Sharif v. Camden LBC [2013] UKSC 10 at [23]).

On the other hand,
“In the Court of Appeal Arden LJ disagreed with the way the duty was expressed in [Codona v. Mid-Bedfordshire DC [2004] EWCA Civ 925; [2005] H.L.R. 1]… She said that the duty in section 193(2) was expressed in terms of producing a result in the context of homelessness, which of its nature requires some urgent action. But the words of the subsection need to be seen in their overall context. The urgency of the action that is needed will vary from case to case, including the way the authority fulfils its interim duty under section 188(1). … As Auld LJ said in Codona, … the court will not make an order to force a local authority to do the impossible. On the other hand it may well feel that it is proper for it to step in where the time that is allowed to elapse becomes intolerable” (Lord Hope in Birmingham CC v. Ali; Moran v. Manchester CC [2009] UKHL 36; [2010] 2 A.C. 39; [2009] H.L.R. 41 at [4]).

The criteria to which the courts are likely to have regard in responding to a challenge include: (i) the nature of the accommodation being occupied; (ii) the length of time that the breach has continued; (iii) the efforts the council has made to find other, suitable accommodation; and, (iv) the likelihood of accommodation becoming available in the future. Plainly, every case will turn on its facts; there is much to be said for the selection of a strong, first “test” case. Nonetheless, given that the use of B&B accommodation is so specifically and tightly prescribed, it must be considered that the prospects of securing injunctive mandatory orders, specifying a short time frame for compliance by the authority, are strong.

The reality – which the courts need to accept – is that welfare provision costs and that the harder the prevailing economic conditions, the more it does so; put another way, the very purpose of welfare provision is to make up the shortfall left by the free market. It is not the job of the courts either to get local authorities off a hook on which government has explicitly chosen to hang them or to perpetuate or exacerbate the way that the poorest are being made to suffer the consequences of the current economic crisis.

Andrew Arden QC and Annette Cafferkey discuss the Prevention of Social Housing Fraud Act 2013.

The Act applies to both England and Wales and will come into force on a date to be appointed.

Background

In Protecting the Public Purse 2012, the Audit Commission estimated that 98,000 properties were subject to housing fraud (whether by unlawful sub-letting, the provision of false information when applying for housing, wrongful assignment, or non-occupation as a principal home). This is almost twice its 2009 estimated figure of 50,000 properties which the National Fraud Association estimated cost councils £900m per year. Despite the extent of the problem, however, the Audit Commission noted that housing associations had expressed the view that they had no financial incentive to tackle the problem.

Scope

The Act does not cover providing false information, which is already an offence both under Part 7, Housing Act 1996 and in criminal law.

Two new criminal offences will be created by the new Act. The first will arise when the secure or assured tenant of a private registered provider of social housing sublets the whole or part of the property, ceases to occupy the property as an only or principal home and does so knowing that to do so is contrary to the express or implied terms of the tenancy. The second will arise if the tenant dishonestly and in breach of an express or implied term of the tenancy sublets or parts with possession of the whole or part of the property and ceases to occupy it as his only or principal home. The – elusive – distinction is that it is sufficient for the first offence to know that the subletting is in breach, while the second offence is if the act is done dishonestly.

It will be a defence to the first of these offences if the tenant can show that the action resulted from actual or threatened violence towards the tenant of a member of the tenant’s family residing with the tenant immediately before the tenant ceased to occupy the property, if the violence was from a person residing in, or in the locality of, the property. Nor is the offence committed if the landlord has consented in writing to the subletting of part of the property or if the person in occupation is someone who is entitled to apply to the court for an order giving him or her a right to occupy the dwelling-house (e.g. an occupation order under the Family Law Act 1996) or to have the tenancy transferred to him or her (e.g. under Family Law Act 1996, Sch.7), or a person in respect of whom an application may be made to have the tenancy transferred to him or to someone else for his benefit (e.g. under Children Act 1989). Presumably, reliance can be placed on the law of duress in relation to the second offence.

Prosecutions will be by the local authority, whether or not it is the landlord. The criminal court has power to make an “unlawful profit order” according to a formula set out in the Act; an unlawful profit order can also be sought in civil proceedings; the effect of either type of order is intended to require the defendant to repay the profit made as a result of the offence.

Consultation

During consultation (Social Housing Fraud Summary of Responses and Next Steps DCLG July 2012), a small minority of landlords indicated that they would pursue criminal proceedings wherever possible, whilst “many more” indicated that they would do so only in a minority of cases, responses which suggest that there will be no consistency of approach in tackling this matter (an outcome that possibly may have been better avoided if the matter were dealt with by the police).

Concern was also expressed about the ability of – already overstretched – local authorities to meet the strictures of the criminal rules on procedure and evidence.

Other points to emerge from consultation included the view – consistent with the Audit Commission report – that many landlords believed that non-criminal sanctions were “adequate and effective” in relation to unlawful sub-letting; there was also some doubt expressed about the extent to which money would, in practice, be recoverable from the defendant.

Comment

It’s one of those bodies of law that no one – political party or otherwise – wants to be seen opposing. Subletting social housing at a profit is clearly wrong in anyone’s terms and there can be no objection to steps to eradicate it. For example, given that it is unlawful subletting – therefore, in breach of the terms of the tenancy – that is in issue, it is difficult to think that any exception could or would have been taken to, say, a fast-track county court procedure to recover possession; likewise, the provisions for recovering the profit in the civil courts is plainly sensible and appropriate.

There are, we think, three ways in which the legislation may, however, not be so welcome. First, it is yet another example of the use of the criminal law to govern the conduct of social housing tenants: it is only social housing tenants who can commit the offence. Secondly, the Act offers nothing by way of practical assistance – detecting and resolving the problem will remain as difficult as ever therefore.  Lastly,  it seems to us that there is a real risk of inappropriate use of the legislation against, e.g., immigrants whose only way of maintaining relations with their families in their countries of origin is by way of infrequent but lengthy stays of exactly the order that have given rise to findings of intentional homelessness on their return. If, to guard against loss of the home, the tenant allows friends or family to take over the property, possibly with a small uplift on the rent to cover utilities, facilities and so on, he or she will also be vulnerable to prosecution, at least at the hands of those authorities who are least tuned in to these or similar patterns of behaviour.

Of course, the tenant will be able to raise defences – not least, the distinction between tenancy and licence, but this is a notoriously difficult area of law, not only one lost on most occupiers and many advisers but one that is not best addressed in the criminal courts!

Andrew Arden QC and Annette Cafferkey seek out the underlying policy of recent changes in social housing law and conclude that it’s all about ‘the deserving poor’.

Introduction

Sometimes, it’s a struggle to make sense of all the policy changes there have been over the last year or two. Consider the following.

Private sector discharge of homelessness duty

The Localism Act 2011 allows authorities to discharge the main housing duty towards a homeless applicant by the provision of an assured shorthold tenancy, without the applicant’s agreement. If the applicant re-applies within two years, any intervening loss of priority need – such as children ceasing to be dependent – will not affect his or her position, but longer than that means he or she will not qualify for a further discharge of the full duty.

Flexible tenancies

That Act also introduced the flexible tenancy which means, in effect, that many if not most new local authority lettings will not be secure, will not be ‘for life’ and the right to stay on will need to be established anew each time it expires.

Welfare cap

The changes to housing benefit, in particular the caps on local housing allowance and household benefits, will inevitably mean that accommodation – whether by way of homelessness discharge or otherwise – will be outside the main city centres. Homeless applicants are likely to be driven further afield and dispersed to areas of the country with which they will very probably have no connection or even familiarity (although it remains to be seen how this will square with the recent suitability order, Homelessness (Suitability of Accommodation) (England) Order 2012 SI No 2601, which requires the local housing authority to take into account the location of accommodation offered when considering its suitability).

Allocations

The 2011 Act also allowed authorities in England to decide for themselves who are and are not to be ‘qualifying persons’, for the purposes of allocating social housing.

Pay to Stay

This is a policy (High Income Social Tenants Pay to Stay Consultation DCLG, June 2012), discussed in an earlier post, see 29 June 2012. In short, authorities are to be encouraged to charge higher rents to better off tenants – ultimately, the intention is to allow them to charge market rents.

Anti-social behaviour and mandatory grounds for possession

The anti-social behaviour proposals were detailed in the consultation paper, Putting Victims First, More Effective Responses to Anti-social Behaviour (Home Office, May 2012, also discussed,  more fully than here,  in an earlier post on 18 June 2012). The proposals include the extension of grounds for possession to include circumstances where the tenant or a member of his household has been convicted of an offence at the scene of a riot which may have occurred anywhere in the country (and is, therefore, unconnected to housing issues).

Whilst this ground for eviction will be subject to a reasonableness requirement, which affords some protection against abuse, there is a related proposal for the introduction of a mandatory ground for possession which can be used in circumstances where, for example, a tenant or a member of his household or a visitor

• has been convicted of a serious offence in the locality, or
• found by a court to be in breach a crime prevention injunction

even where neither has anything to do with the use of the property.

Conclusion

When one takes the proposals together, a theme emerges. The first of the changes – private sector discharge of homelessness duties – speaks for itself: it continues to minimise access to social housing by the homeless as a class – they must qualify not because they need the housing, but because they meet an authority’s own allocation criteria. Here, the Allocation of Accommodation Guidance (June 2012) encourages authorities to give a reasonable preference to members of the armed forces, households in work or seeking work or to those who are contributing to the community in other ways, for example, through voluntary work, fostering or adoption, ie to the ‘worthy’, people who ‘merit’ access to it.

As for flexible tenancies, they were said to be designed ‘to ensure that help and support are focused on those who need it most when they need it most; and to build strong and cohesive communities’ (Local decisions: a fairer future for social housing Consultation, DCLG 2010, para 2.10). Grant Shapps said (when he was Housing Minister): ‘The intention of time-limited tenancies is to give [social] landlords greater control over ensuring that their social housing goes to those most in need. It is senseless to pretend … that everyone … needs a lifetime tenancy’ (Inside Housing, 25 March 2011), he concludes, though most (not merely many) people – even those who are opposed to social housing – would hardly consider it either a pretence or non-sensical to need a home for life.

Plainly the ‘cuts’ to housing benefit were driven by public expenditure cuts, but– in the context of this blog – the point to make is that they were also implemented to ‘ensure that people on benefit are not living in accommodation that would be out of the reach of most people in work‘ ie there is more in play than mere cost-cutting – notions of putative fairness towards those not in receipt of social welfare provision also pervade.

Pay to Stay was also identified as ‘an issue of principle and fairness’, and is aimed at current secure tenants, rather than those to be governed by new, restrictive allocation policies who may only get a flexible tenancy in any event; the idea is to drive them out.

As for the anti-social behaviour provisions, it is increasingly clear that the withdrawal of social housing is being used as a form of punishment for criminal activity, even though the offence may be wholly unconnected with housing matters, and even though it inflicts the punishment on the family as a whole: this marks out those in social housing as being obliged, under pain of punishment, to maintain standards of behaviour which are simply not applicable to other citizens.

Of course, those standards are desirable; it is the way they are achieved that seems to us to be questionable. We have in one form or another been saying this for not years but decades: criminal conduct should be dealt with by the police and the criminal courts, not by housing officers and the civil courts.

Sometimes, standing back is the only way to see it. Taken together, there is a pattern. Social housing is not for life, but for now; you have to be poor enough to qualify and you have to be (and remain) worthy enough to deserve it; apparently, it’s only fair!

It’s unlikely to be considered fair, however, by those who are on the receiving end of it: the family member evicted because another member is engaged in criminality that is unconnected with the house; the homeless applicant sent to live somewhere with which he or she has no connections and to which he or she does not want to go to, where, incidentally, there are likely to be fewer job opportunities than in the cities; the tenant who has to give up his or her local resources and connections – education, medical, social, maybe even employment – because, at the end of a flexible tenancy, he or she cannot afford to live in the area;  the secure tenant who has worked hard for years and achieved promotion and/or higher pay as a result, but who is now required to pay a higher rent for his home than someone in the same accommodation next door.

Nor are we convinced it is fair to housing officers who will be called upon to make highly subjective judgments about people in a number of respects – including their willingness to work and about their life-styles – which few are trained and many will have little inclination to make, but which they will be put under pressure to make by local councillors.

Indeed, it is quite hard to see to whom the policy is ‘fair’. Is it really fairness to take something away from one person simply because someone else does not have it? Arguably, we suppose; but not as fair as making sure they both do so.