Author Archives: ardenchambers

Whose fee is it anyway?

Forum on Tenant Fees and Holding Deposits

Clara Zang of Arden Chambers reports on an evening spent considering the Tenant Fees Bill

 

On Thursday 30 August 2018, Samuel Beswick (Cravath International Fellow, Harvard Law School) convened a panel of speakers to discuss the legal and practical role of tenant fees and holding deposits in the residential tenancies market. The forum was hosted by the Centre for Access to Justice and held at Bentham House, UCL Faculty of Laws.

 

 

The Panel

 

  • Justin Bates: barrister at Arden Chambers (Panel Chair).
  • Dr Aruna Nair: Property Law lecturer at King’s College.
  • David Smith: Policy Director of the Residential Landlords Association and Partner at Anthony Gold Solicitors.
  • Paula Hebberd: Solicitor and Director at Woodstock Property Law.
  • John Gallagher: Principal Solicitor at Shelter.
  • Samuel Beswick: Cravath International Fellow, Harvard Law School.

 

 

Discussion

 

Many prospective tenants pay a sum of money to letting agents as a “holding deposit” before they enter into the main tenancy agreement on the understanding that this would reserve the property for them whilst the references and background checks are being processed. It follows that the prospective tenants will (reasonably) assume that agents will take the property off the market upon receipt of the holding deposit and will refrain from arranging further property viewings. In reality, the payment of a holding deposit will often not have this effect and the panel discussed the difficulties faced by prospective tenants in circumstances where they pay a holding deposit but fail to obtain the final tenancy agreement through no fault of their own.

 

The panel discussed how the holding deposit should be legally characterised and what its purpose was. The panel appreciated that the first difficulty faced by prospective tenants was how to characterise the fee paid to the letting agent. The fee paid may not in fact be a holding deposit at all, despite the label given to it by letting agents.  For example, the agent may treat the payment as a fee for referencing costs or they may simply be giving the prospective tenant the first opportunity to make a claim to the property, failing which they will have their fee returned (i.e. because somebody else makes a better offer). In some circumstances, a holding deposit may be better characterised as “earnest money” to prove that the prospective tenant has a genuine interest in the property. It acts as a risk balancing strategy for agents to protect the landlord in the event that a final tenancy agreement is not entered into, rather than offering protection to prospective tenants by holding the property for them.

 

The panel discussed whether the prospective tenant might have a damages claim for breach of contract in circumstances where the agent fails to take the property off the market and/or chooses not to grant a final tenancy agreement to a prospective tenant. Depending on the terms of the lease, formality requirements or lack of certainty of term may prevent the finding of a binding contract. If the parties enter a written agreement which states that it is  “subject to contract”, this may also prevent the finding of a binding contract.

 

The Tenant Fees Bill will make it legitimate for agents and landlords to take holding deposits from prospective tenants, provided that it is returned if a tenancy is not subsequently granted. The Bill does not assist with defining what constitutes a holding deposit and whether the subsequent failure to grant a tenancy can lead to any further remedies and ancillary damages for out-of-pocket losses. Therefore, the Tenant Fees Bill appears to protect the landlord by creating a scheme that legitimatises the taking of a holding deposit for the benefit of the landlord, who is at liberty to change his mind as long as the holding deposit is returned.

 

The panel felt that the problem was exacerbated by the common and widespread misconception that a letting agent can be a servant of two masters (both the landlord and the tenant). The panel were strongly of the view that it is legally impossible for an agent to owe a substantive duty to both the landlord and tenant, although they do have a limited duty to tenants (e.g. not to mislead). The interest of the tenant and landlord are not aligned and it seems clear that the agent’s principal is the landlord, not the tenant, despite this common misconception. The view that a letting agent can serve two masters goes against the principles of agency enshrined in both common law and statute as there is a clear conflict of interest between the landlord and the tenant or prospective tenant.

 

In many cases, landlords will engage multiple agents and may not know how their agents have been behaving. Landlords may not even be aware that a holding deposit had been paid and will often not benefit from the agent’s receipt of a holding deposit or other fee from prospective tenants. Although the landlord enters a contractual arrangement with their agent to manage their property and handle tenants, the landlord will nevertheless be held liable for the managing agent’s actions and will normally be the subject of court proceedings for their agent’s poor behaviour, as the agent will not have any assets for the claimant to pursue.

 

The panel noted that there were a number of free advice agencies, such as Shelter, who can assist tenants. Local Authorities may also assist, as well as the Property Ombudsman and Property Redress Scheme. Unfortunately, prospective tenants who wish to pursue legal action as a litigant in person will face difficulties as the legal process is challenging and the county courts will not be able to provide face-to-face help due to legal aid cuts. This will result in prospective tenants simply looking elsewhere for accommodation rather than pursuing legal action against agents and landlords. The panel felt that a more accessible court system was required, and suggested that statutory changes may be required to “sweep and replace” the current system in place.

 

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It’s cold outside

Clara Zang gives you fair prior warning of the forthcoming energy efficiency reforms

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 SI No 962 (the Regulations) introduces new measures to improve the energy efficiency of certain private rented property in England and Wales.

  • From 1 April 2018: it will be unlawful for a landlord in the private rented sector (PRS) to grant a new domestic tenancy or renew an existing one if the property does not have a minimum energy performance rating of ‘E’ on its Energy Performance Certificate (EPC), subject to prescribed exemptions.
  • From 1 April 2020: it will be unlawful for a private landlord to continue to let a residential property that does not have a minimum energy performance rating of ‘E’ on the EPC, subject to prescribed exemptions. 

The tenancies in scope of the above rules are defined in section 42(1)(a) of the Energy Act 2011 and the Energy Efficiency (Domestic Private Rented Property) Order 2015 SI No 799 and includes assured tenancies and assured shorthold tenancies, regulated tenancies, and agricultural tenancies.

Similar provisions have been introduced in respect of non-domestic private rented properties. Private commercial landlords must not grant new tenancies after 1 April 2018 or continue to let a property after 1 April 2023 if they do not meet the minimum energy efficiency standard, subject to the prescribed exemptions.

Implications for Landlords

PRS landlords must ensure that their properties have an EPC rating of ‘E’ or above before granting new residential tenancies or renewal tenancies from 1 April 2018, or continuing to let a residential property from 1 April 2020.

An EPC is a certificate and report which sets out the energy efficiency rating of a property (from band A to G) and contains information about a property’s energy use and typical costs as well as recommendations for improving its energy efficiency. EPCs are normally valid for 10 years. If the property already has an EPC which is less than 10 years old at the relevant time with an energy efficiency rating of ‘E’ or above, the landlord may let the property and there is no need to obtain a new EPC.

If the EPC does not demonstrate an energy efficiency rating of ‘E’ or above, the landlord should carry out all ‘relevant energy efficiency improvements’ which have been recommended for the property and can be installed at no cost to the landlord. If the energy efficiency rating remains below ‘E’ despite the improvements, the landlord may register for an exemption on the PRS Exemptions Register (see below).

Landlords are only required to make improvements to an ‘F’ or ‘G’ rated property if they can do so at no cost to themselves. Funding can be obtained from a number of sources, including: Green Deal Finance, ECO (Energy Company Obligation) Help to Heat Scheme, local authority and central government funding, other third party sources, or a combination of the above. Further information on funding can be obtained by contacting the Energy Savings Advice Service on 0300 123 1234.

Consequences of Failure to Comply

A private landlord who fails to comply with the above rules when letting a residential property will face a civil penalty of up to £4,000 if he has been in breach for three months or more, or a penalty of up to £2,000 if the breach has taken place for less than three months.

In addition to the financial penalty, the publication penalty shall apply whereby the details of the breach will be published in the national PRS Exemptions Register. A landlord served with a penalty notice has a right to request a review by the local authority and then appeal to the First-tier Tribunal.

The financial penalty in respect of commercial tenancies is significantly higher (up to £150,000).

Local authorities will be responsible for enforcing compliance with the above rules and may serve a compliance notice seeking information from a landlord if they have reason to believe that the landlord is in breach. The landlord must provide the relevant information as requested. Failure to comply with a compliance notice may result in a financial penalty of up to £2,000 and providing false or misleading information on the PRS Exemptions Register may result in a penalty of up to £1,000.

Exemptions

The above rules on energy efficiency standards will not apply in the following circumstances:

  • Relevant Improvements: the landlord has made all of the relevant energy efficiency improvements to the property that can be made but the property remains substandard or no relevant improvements can be made.
  • Cost Exemption: the landlord has been unable to access relevant ‘no cost’ funding to fully cover the cost of installing the recommended improvements.
  • Wall Insulation: it is not appropriate, due to its potential negative impact on the fabric or structure of the property, or the building of which it forms part, for certain wall insulations to be installed.
  • Third Party Consent: consent is required from a third party to carry out the energy efficiency improvements and the landlord has, within the preceding five years, been unable to obtain the relevant consent from the tenant or third parties to carry out the improvement works despite reasonable efforts to seek consent.
  • Property Devaluation: the landlord has obtained a report from an independent surveyor stating that the relevant energy efficiency improvements would result in a reduction of more than 5 per cent in the market value of the property, or of the building of which it forms part.
  • Temporary Exemptions: these temporary exemptions apply where a person recently became the landlord and are set out in full in regulation 33 (e.g. where less than six months have passed since: the grant of a lease pursuant to a contractual obligation; the deemed creation of a new lease by operation of law; the landlord having been a guarantor, or a former tenant, who has exercised the right to obtain an overriding lease of a property pursuant to section 19 of the Landlord and Tenancy (Covenants) Act 1995 etc).

Landlords should register an exemption by opening a user account and providing evidence of why the exemption applies. At present, the PRS Exemptions Register is running as a pilot and landlords who wish to register an exemption should email PRSregisteraccess@beis.gov.uk.

Implications for Tenants

The new rules will primarily affect landlords rather than tenants. However, there are a number of options available for tenants who are living in substandard accommodation.

Tenant’s Request: Part 2 of the Regulations provide that tenants residing in a property with an ‘E’ rating or below may serve a notice on their landlord requesting consent to carry out relevant energy efficiency improvements to the property. The landlord cannot unreasonably refuse consent, subject to prescribed exemptions.

HHSRS: If the landlord is unwilling to grant consent to carry out the relevant works, tenants may wish to consider contacting their local environmental health department. The local authority will inspect the property and assess its condition pursuant to the Housing Health and Safety Rating System (HHSRS) provisions under Part 1 of the Housing Act 2004. If the property is in substandard condition, the authority will serve the landlord with an improvement notice or notice of emergency remedial action requiring them to undertake works to the property. For example, the notice may identify that there is a cold health hazard or issues relating to dampness, leaks and mould at the property.

Retaliatory Eviction: Tenants who have signed or renewed their assured shorthold tenancy after 1 October 2015 are afforded further protection by the provisions on retaliatory eviction, pursuant to section 33 of the Deregulation Act 2015. From 1 October 2018, this provision will apply to all assured shorthold tenancies.

The provisions on retaliatory eviction provides that a landlord cannot evict a tenant by serving a section 21 notice in response to a complaint about the condition of the property. The complaint must be in writing unless the tenant does not know the landlord’s address. If a landlord responds to the tenant’s complaint by serving a section 21 notice, does not provide an ‘adequate response’ which describes the action they shall take to address the issue, or does not respond to the complaint at all, the tenant should contact their local authority and request an inspection of the property as above. The local authority will apply the HHSRS and may serve a notice on the landlord requiring improvement works or emergency remedial action to be taken. After receiving such notice, landlords must carry out the repairs identified and cannot serve a section 21 notice on the tenant for a period of six months from the service of the local authority’s notice.

The above provisions are a welcome improvement for tenants as they are designed to raise the standard of accommodation in the private rented sector and reduce energy bills. When read with the provisions on the HHSRS and retaliatory eviction, tenants are provided further protection and may have a potential defence to a claim for possession.

 

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The Queen in the North

Clara Zang looks at the very recent changes to the private rented sector in Scotland and wonders if England and Wales might ever follow suit.

The Private Housing (Tenancies) (Scotland) Act 2016 (the Act) received Royal Assent on 22 April 2016 and came into force on 1 December 2017. The Act introduces a new type of tenancy, the private residential tenancy, which replaces the short assured tenancy and assured tenancy scheme for all future lets in Scotland starting on or after 1 December 2017. Existing assured and short assured tenancies will not convert automatically into private residential tenancies and will continue to take effect under the previous legislation until they are terminated.

What is a Private Residential Tenancy?

A tenancy starting in Scotland on or after 1 December 2017 will be a private residential tenancy if:

  • A property is let to an individual as a separate dwelling,
  • the tenant occupies the property (or any part of it) as his only or principal home, and
  • the tenancy is not one which is excluded under Schedule 1 to the Act (e.g. holiday lets, agricultural land, licensed premises etc).

A model tenancy agreement and guidance is available to download from the Scottish government website. The parties are not required to use the model agreement but the agreement used must include the mandatory clauses highlighted in bold in the model agreement. Section 10 of the Act puts landlords under a duty to provide tenants with the written terms of the tenancy no later than the day on which the private residential tenancy commences or, if the tenancy only later becomes a private residential tenancy, within 28 days of it becoming one.

The Act also creates a new tribunal, the First-tier Tribunal for Scotland (Housing and Property Chamber), which will deal with all disputes relating to private residential tenancies. This is a welcome change as it will enable specialist tribunal members to deal with tenancy matters quickly and efficiently.  The sheriff courts will continue to deal with existing assured and short assured tenancies.

Increased Protection and Security for Tenants

The Act provides levels of protection and security for private tenants, which far exceeds the rights of assured shorthold tenants in England.

Indefinite security of tenure: The private residential tenancy provides tenants with indefinite security of tenure by creating an open-ended tenancy with no fixed term.

Longer Notice periods: Tenants can terminate the tenancy at any time by giving 28 days’ notice to leave. Where there is a joint tenancy, all tenants must sign the notice to leave. On the other hand, landlords can only terminate the tenancy if they satisfy one of the 18 grounds listed in Schedule 3 to the Act. Further, landlords must give 28 days’ notice to terminate the tenancy within its first six months and 84 days’ thereafter.

Landlords are only required to give 28 days’ notice to terminate regardless of the tenancy start date if they are seeking to evict the tenants on grounds of:

  • failure to occupy the property as their only or principal home,
  • breach of tenancy agreement, rent arrears for three or more consecutive months,
  • relevant criminal conviction,
  • relevant anti-social behaviour, or
  • association with a person who has a relevant conviction or has engaged in relevant anti-social behaviour.

Grounds for terminating: Schedule 3 of the Act sets out the following 18 grounds under which landlords may seek eviction.

  1. The landlord intends to sell the property for market value within three months of the tenant ceasing to occupy it. (Mandatory)
  2. The property is to be sold by the mortgage lender. (Mandatory)
  3. The lender intends to refurbish the property and which will entail significantly disruptive works. (Mandatory)
  4. The landlord intents to live in the property as their principal home. (Mandatory)
  5. Members of the landlord’s family intends to live in the property as their only or principal home. (Discretionary)
  6. The landlord intends to use the property for a purpose other than providing a person with a home. (Mandatory)
  7. The property is held for a person engaged in the work of a religious denomination as a residence from which the duties of such a person are to be performed; the property has previously been used for that purpose; and the property is required for that purpose. (Mandatory)
  8. The tenancy was granted to an employee and the tenant is no longer an employee. (Mandatory if application for eviction is made within 12 months of the tenant ceasing to be an employee and discretionary if the application is made after 12 months.)
  9. The tenancy was entered into on account of the tenant having an assessed need for community care and the tenant has since been assessed as no longer having such needs. (Discretionary)
  10. The tenant is not occupying the let property as their only or principal home. (Mandatory)
  11. The tenant has breached the tenancy agreement (excludes the payment of rent). (Discretionary)
  12. The tenant is in rent arrears. (Mandatory if the tenant has been in arrears continuously for three months or more, and on the day the tribunal considers the case, the arrears were at least one month’s rent. The tribunal must also be satisfied that the arrears were not due to a delay or failure in the payment of a relevant benefit. This ground is discretionary if the tenant has been in arrears of rent for three or more months, and on the first day the tribunal considers the case, the arrears are less than one month’s rent and the tribunal is satisfied that it is reasonable on this basis to issue an eviction order.)
  13. After the tenancy has begun, the tenant is convicted of using, or allowing the use of, the let property for an immoral or illegal purpose, or is convicted of an imprisonable offence committed in or in the locality of the let property. (Mandatory)
  14. The tenant has acted in an anti-social manner to another person and the tribunal is satisfied that it is reasonable to issue an eviction order. (Discretionary)
  15. The tenant is associating in the let property with a person who has a relevant conviction or who has engaged in relevant anti-social behaviour. (Discretionary)
  16. Landlord registration has been refused or revoked by a local authority. (Discretionary)
  17. House in Multiple Occupation (HMO) license revoked by the local authority. (Discretionary)
  18. Overcrowding statutory notice in respect of the property has been served on the landlord. (Discretionary)

Rent Increases: Rent increases will only be allowed once every 12 months and landlords must follow the process set out in section 22 of the Act. This provides that landlords must give a rent-increase notice and the notice period must be 3 months or whatever longer period has been agreed between them and their tenants. Tenants may contest a proposed rent increase that think it is too high by referring the case to a rent officer for adjudication. Section 35 also provides that local authorities may make an application to designate all or part of their area as a rent pressure zone. Rent increases will be capped at the amount calculated by the Scottish Ministers if the tenancy relates to a property that is situated in a ‘rent pressure zone’.

Comparison with Assured Shorthold Tenancies

The Scottish private residential tenancy is a stark contrast to the assured shorthold tenancy regime that applies in England and Wales pursuant to the Housing Act (HA) 1988. Under HA 1988, assured shorthold tenants do not enjoy long-term security of tenure and HA 1988 s21 provides landlords with a powerful tool for evicting tenants upon expiry of a fixed-term assured shorthold tenancy by serving a notice without providing any reasons or grounds for doing so. Courts must grant the landlord an outright possession order as long as the relevant procedural requirements have been met, unless it will cause exceptional hardship to the tenant, in which case the court may postpone the date of possession for up to six weeks.

There are currently no proposals in place for such major reforms to the assured shorthold tenancy scheme in England and Wales. Although there have been a number of recent changes which have provided tenants with some additional security (e.g. tenancy deposits, retaliatory eviction, procedural restrictions on a landlord’s ability to serve a notice to terminate a tenancy under  HA 1988 s21), these are not nearly as ambitious as the Scottish reforms.

 

 

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Showing your workings

In this post Alice Richardson considers the decision in London Borough of Hackney v Haque [2017] EWCA Civ 4 in which the Court of Appeal grappled with the applicability of s.149 Equality Act 2010 (“PSED”) to a “suitability” decision pursuant to ss.206 and 210 Housing Act 1996.

Facts

Mr Haque was a man in his early forties with serious neck and back pain. His disability had caused him to lose his job as a bus driver in 2011. In January 2013 his mother had asked him to leave her home. He made a homeless application to the London Borough of Hackney, in February 2013, which was refused. He sought a review and was accommodated pending the review decision. On review the original decision was upheld and he was evicted in August 2014.

 

Mr Haque made a second application in August 2014 and was accommodated pending a decision at Room 315 in the Metropolitan Hostel in Kingsland Road, London E8. Following a series of negative determinations and “minded to” letters, together with an unsuccessful review the Council finally concluded that Mr Haque did have a priority need, and qualified for the full housing duty, on 26 March 2015. He had been accommodated in Room 315 throughout, and the Council concluded that this accommodation was suitable for him, in discharge of its housing duty while he was placed on its waiting list for the allocation of permanent accommodation.

 

Mr Haque’s solicitors sought a review of the suitability of Room 315 pursuant to s.202. The accommodation was alleged to be unsuitable for Mr Haque because:

 

“i) Its cramped size restricted his movement and thereby exacerbated his back, shoulder, leg and neck pains;

ii) Its cramped size, coupled with a “No Visitors” policy applied in the hostel, left him isolated and prevented him from receiving visits from his children, which exacerbated his depression and anxiety;

iii) The hostel’s lack of laundry facilities meant that he was required to wear dirty clothing, since his physical disability prevented him from carrying loads of laundry to a launderette; and

iv) As a result of all the above, he had been required to increase his dosage of anti-depressant medication.”

 

In a decision dated 29 September 2015 the Council concluded that:

 

“i) Room 315 was of ample size, were it not excessively cluttered by Mr Haque’s possessions, some of which he could put into storage offered by the Council at reasonable cost.

ii) Mr Haque could use local parks, local restaurants and eateries to meet his family and friends, or see them in their own homes, and did not therefore need an exception from the No Visitors policy in order to avoid having his depression exacerbated by loneliness.

iii) The nearest launderette was sufficiently proximate for him to be able to reach it with moderate loads of laundry, and the No Visitors policy was to be mitigated in his case by permitting his family to visit him to collect and return laundry.

iv) The council’s independent medical advisor had concluded that his condition was such that a flat served by one flight of stairs and a lift was suitable for him, and that the evidence did not sufficiently demonstrate that his current accommodation was exacerbating his condition, which had been long-standing.”

 

The letter also stated that “In reaching this decision I have had regard to the Equalities Act 2010…”.

 

Mr Haque appealed to the County Court under s.204 Housing Act 1996. He pursued various grounds of appeal and was successful on his first ground that the review officer “failed to apply the PSED in considering whether Room 315 was suitable having regard to his medical condition”. The decision was quashed.

 

The Council appealed to the Court of Appeal.

 

The PSED

s.149(1) Equality Act 2010 provides:

 

“A public authority must, in the exercise of its functions, have due regard to the need to:

(a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;

(b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;

(c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.”

 

In Hotak v Southwark London Borough Council; Kanu v Southwark London Borough Council [2016] AC 811 the Supreme Court considered, inter alia, the relationship between the PSED and the assessment of priority need under s.189(1)(c) Housing Act 1996. Delivering the leading judgment Lord Neuberger, at [78], held that “each stage of the decision-making exercise … must be made with the equality duty well in mind” and that:

 

“… the equality duty, in the context of an exercise such as a section 202 review, does require the reviewing officer to focus very sharply on (i) whether the applicant is under a disability (or has another relevant protected characteristic), (ii) the extent of such disability, (iii) the likely effect of the disability, when taken together with any other features, on the applicant if and when homeless, and (iv) whether the applicant is as a result “vulnerable””

 

However, at [79], Lord Neuburger went on to say that “… a conscientious reviewing officer who was investigating and reporting on a potentially vulnerable applicant, and who was unaware of the fact that the equality duty was engaged, could, despite his ignorance, very often comply with that duty”.

 

The Court of Appeal decision

The Court of Appeal allowed the Council’s appeal. Delivering the lead judgment Briggs LJ held, at [41], that Lord Neuberger’s four-stage approach in Hotak was only concerned with vulnerability under s.189(1)(c) Housing Act 1996. Equally, Lord Neuberger’s acceptance that “in many cases” a reviewing officer might discharge a PSED even if ignorant of it was expressly directed to the conduct of a vulnerability assessment.

 

The general principle to be derived from Hotak was the “…sharp focus required of the decision maker upon the relevant aspects of the PSED where it is engaged by the contextual facts about each particular case”.

 

Briggs LJ set out the relevant context in Mr Haque’s case, at [42], and went on to consider what the PSED required of the reviewing officer on those facts. At [43] he held:

 

“In my judgment, it required the following:

i) A recognition that Mr Haque suffered from a physical or mental impairment having a substantial and long term adverse effect on his ability to carry out normal day to day activities; i.e. that he was disabled within the meaning of EA s. 6, and therefore had a protected characteristic.

ii) A focus upon the specific aspects of his impairments, to the extent relevant to the suitability of Room 315 as accommodation for him.

iii) A focus upon the consequences of his impairments, both in terms of the disadvantages which he might suffer in using Room 315 as his accommodation, by comparison with persons without those impairments (see s. 149(3)(a)).

iv) A focus upon his particular needs in relation to accommodation arising from those impairments, by comparison with the needs of persons without such impairments, and the extent to which Room 315 met those particular needs: see s. 149(3)(b) and (4).

v) A recognition that Mr Haque’s particular needs arising from those impairments might require him to be treated more favourably in terms of the provision of accommodation than other persons not suffering from disability or other protected characteristics: see s. 149(6).

vi) A review of the suitability of Room 315 as accommodation for Mr Haque which paid due regard to those matters.”

 

The Judge below, HHJ Luba QC, had concluded that Hotak, read together with the duty to give reasons for a reviewing officer’s decision:

“… oblige a reviewing officer to be transparent in his treatment of the issues of whether an applicant does or does not have a protected characteristic and as to whether the public sector equality duty is in play and with what effect. In my judgment, that will in almost all circumstances, require a reviewing officer to spell out, at least in summary form, his decisions on those matters. Indeed, he should go further and spell out what follows from an affirmative finding that a protected characteristic is established and that the public sector equality duty is in play”.

 

The Court of Appeal considered that approach to be wrong and adapted para 79 in Hotak to conclude that a conscientious reviewing officer considering the objections in good faith and in a focussed manner would be likely to comply with the PSED even if unaware of its existence (at [47]). Further s.149 did not require the decision maker to give any reasons for a decision to which the PSED applies (at [48]).

 

In Mr Haque’s case, taking a “stand-back” approach to the decision, the review officer had complied with the six stage approach set out above.

 

Comment

The decision that the four-stage approach in Hotak applies only to vulnerability decisions may not be surprising to some. Instead the six stage test should be looked at closely by those representing homeless applicants challenging suitability for reasons related to disability in future.

 

The decision on the duty to give reasons may cause some consternation. How is a homeless person, or indeed his advisor, to know whether the PSED has been properly considered if the review decision does not contain the type of reasoning that HHJ Luba QC referred to?

 

In this case McCombe LJ, at [61], expressed some reservations in relation to that point stating:

“I confess to having had hesitation as to whether Mr. Banjo’s decision sufficiently demonstrated adequate regard for the requirements of the PSED…. I considered Mr Arden’s submissions on this point to be particularly persuasive”.

 

Faced with what seems a somewhat harsh review decision Briggs LJ had said, at [57]:

“Judicial notice can be taken of the fact that housing authorities experience grave constraints in finding appropriately located suitable accommodation for those applicants demonstrating priority need, and that many of them deserve more favourable than purely average treatment by reason of vulnerabilities, including protected characteristics of a type which engage the PSED. The allocation of scarce resources among those in need of it calls for tough and, on occasion, heartbreaking decision-making, but having to say no to those deserving of sympathy by no means betokens a failure to comply with the PSED.”

 

 

 

 

 

 

 

 

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A long and winding road, yet there is still further to go…

In this post Alice Richardson considers the long-awaited Supreme Court “bedroom tax” decision and what it means for affected housing benefit claimants and local authorities.

 

On 9th November 2016 the Supreme Court handed down its decision in the joined appeals of R (Carmichael and Rourke) (formerly known as MA and others) v Secretary of State for Work and Pensions, R (Daly and others) (formerly known as MA and others) v Secretary of State for Work and Pensions, R (A) v Secretary of State for Work and Pensions and R (Rutherford and another) v Secretary of State for Work and Pensions [2016] UKSC 58.

 

Lord Toulson (with whom Lords Neuberger, Mance, Sumption and Hughes agreed) delivered the decision, which was unanimous in respect of some of the appeals, but was only a majority decision (Lady Hale and Lord Carnwarth dissenting) in others.

 

The Issue

 

The bedroom tax was imposed by Regulation B13 of the Housing Benefit Regulations 2006 (SI 2006/213) (“Reg B13”) from 1 April 2013, by way of amendment to the 2006 Regulations by the Housing Benefit (Amendment) Regulations 2012 (SI 2012/3040).

 

The appeals concerned the impact of the bedroom tax on those with disabilities and on women living in “sanctuary scheme” accommodation. The claimants challenged the validity of Reg B13 and contended that there has been a violation of their human rights under Article 14 of the European Convention on Human Rights (“ECHR”), taken with Article 8 and/or Article 1 of the First Protocol (“A1P1”) and in A’s case that there has been a breach of the Public Sector Equality Duty (“PSED”) under the Equality Act 2010.

 

Reg B13 had previously been amended due to the decision of the Court of Appeal in Burnip v Birmingham City Council and other appeals[2012] EWCA Civ 629. In Burnip and a second case the claimants were adults with disabilities who required the presence of a carer throughout the night. A third case (Gorry) concerned a family with two children of the same sex who suffered from severe disabilities making it inappropriate for them to share a bedroom. The court held that in each case there had been discrimination under article 14, because Reg B13 had a disparate adverse impact on persons with disabilities, and that the discrimination had not been justified. The court recognised that the Discretionary Housing Payment (“DHP”) scheme had a valuable role to play but it did not consider that they provided an adequate response to the problem in those cases. In broad terms, by the time of the Supreme Court hearing, Reg B13 had been amended to meet these cases.

 

The Decisions Below

 

In MA the Court of Appeal accepted that Reg B13 had a discriminatory effect on some people with disabilities, but it held that the discrimination was justified, primarily because the Secretary of State was entitled to take the view that it was not practicable to exempt an imprecise class of persons to whom the bedroom criteria would not apply because they needed extra bedroom space by reason of disability. The DHP scheme had the benefit of flexibility and was also appropriate because the nature of a person’s disability and disability-related needs may change over time. The court rejected the argument that the case of Mrs Carmichael, who needed to sleep in a separate room from her husband on account of her disability, was materially indistinguishable from the Gorry situation of children who were unable to sleep in the same room. The court held that the Secretary of State was entitled to provide greater protection for a child than an adult because the best interests of a child are a primary consideration.

In the proceedings relating to A and Rutherford the Court of Appeal held that the situation of the Rutherford family, who included a child with disabilities requiring an overnight carer on certain days of the week, was indistinguishable from that of an adult with disabilities requiring an overnight carer, to which the decision in Burnip applied. The court held that the reasoning in Burnip applied also in the case of A, a female victim of domestic violence living in accommodation adapted under a sanctuary scheme.

The Supreme Court

The Supreme Court dismissed an argument from the MA appellants that ‘weighty reasons’ were required in disability discrimination cases and held that the appropriate test was whether the relevant parts of Reg B13 were ‘manifestly without reasonable foundation’ (see Stec v United Kingdom (2006) 43 EHRR 1017 and Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545).

The Court then went on to consider whether the test had been misapplied.

Firstly, the Court considered Carmichael and Rutherford to be “counterparts” to Gorry and Burnip respectively, and the amendments introduced to meet those decisions did not apply in Carmichael or Rutherford.

The Supreme Court considered that there was no reasonable justification for the differences. Whilst there may be some respects in which differential treatment of children and adults regarding the occupation of bedrooms may have a sensible explanation, there was no sensible reason for distinguishing between adult partners who cannot share a bedroom because of disability and children who cannot do so because of disability. The same applied also to distinguishing between adults and children in need of an overnight carer.

The Court dismissed the remaining MA cases, however, holding in each that it was not unreasonable for those cases to be considered on an individual basis under the DHP scheme.

In A’s case the majority held that there was no valid claim for sex discrimination and the Secretary of State’s appeal was allowed. A’s case for staying where she was, strong as that case appeared to be, had nothing to do with the size of the property.

Lady Hale & Lord Carnwarth, dissented, finding that  Reg 13B operated so as to discriminate against women such as A who were victims of gender-based violence. If the justification for the discrimination (DHP) was not good enough to justify disability discrimination against Rutherford and Carmichael then it was not good enough to justify sex discrimination against A. Similarly, whilst the majority held that there had been no breach of the PSED the minority held that the public sector equality duty requires public authorities at least to consider the impact of their decisions and actions on the victims of gender-based violence. In this case they had failed to do so and accordingly there had been a breach of the PSED.

Comment

As Lady Hale points out in her judgment, it is perhaps unfortunate that A’s case was dealt with alongside the disability discrimination cases due to the different issues raised. A has announced plans to take her case to the European Court of Human Rights which will, of course, take some time.

Nevertheless, the decision relating to the Carmichael’s and the Rutherford’s is to be welcomed and brings an end to the seemingly unjustified distinction between the claimants in Burnip and MA.

Reg13 will now need to be amended to provide for exemptions for households with disabled people with a clear medical need an extra bedroom. One would hope that this will be done relatively quickly (unlike the post-Burnip amendment).

In the meantime, the day the judgement was handed down the Department of Work and Pensions issued an Urgent Bulletin to Local Authorities (HB U3/2016) which states:

“No immediate action needs to be taken by local authorities (LAs) following this judgment. The Court did not strike down the legislation underpinning the size criteria. As such LAs must continue to apply the rules when determining Housing Benefit claims as they did before today’s judgment and the judgment does not require any LA to re-assess the HB of existing claimants. LAs should continue to award DHPs to claimants who they consider require additional financial support.

The Department is considering the Court’s judgment and will take steps to ensure it complies with its terms in due course. The Department will notify LAs once a decision has been taken.”

By s.6(1) Human Rights Act 1998 it is unlawful for a public authority to act in a way which is in compatible with a convention right. Refusing to re-assess claimants and/or refusing to award the full housing benefit entitlement to claimants with a clear medical need for an extra bedroom may well infringe that provision.

According to the Nearly Legal Blog the Child Poverty Action Group are of the view that claimants should seek a revision/supersession of their decision on the basis of “error of law” and then appeal to the First Tier Tribunal if refused.

However, it is unclear how the Tribunal would be able to resolve the situation. Reg13 cannot be read in a convention complaint way pursuant to s.3 HRA 1998 and the Supreme Court has already declared the legislation to be incompatible.

Claimants may well be better off continuing to claim DHP pending the amendments.

 

 

 

 

 

 

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Forgiveness or permission?

In this post Alice Richardson considers the Court of Appeal’s recent decision in Cardiff County Council v Lee (Flowers) [2016] EWCA Civ 1034. In particular, this post will address the perhaps surprising concession by Cardiff County Council that, under CPR r.83.2(e), a landlord must seek the Court’s permission to enforce a suspended possession order (“SPO”).

 

The Facts

On 19 January 2009 the appellant was granted a secure tenancy by the respondent authority pursuant. On 19 March 2013, the authority issued a claim for possession on the grounds of breach of tenancy and nuisance and annoyance. On 3 September 2013, the court made an order for possession which was suspended for two years on the terms that the appellant complied with the provisions of his tenancy agreement, which contained covenants against causing a nuisance or annoyance to neighbours.

In 2015, there was a three-month period in which there were disputes between the appellant and his upstairs neighbour. The authority warned the appellant that it intended to seek a warrant for possession. On 12 August 2015, the authority, filed a Request for a Warrant of Possession of Land (Form N325) on the basis that the appellant had breached the terms of his tenancy agreement and thus the SPO.

Form N325 does not require the court to grant permission for the issue of a warrant of possession and on 14 August 2015, the Cardiff County Court issued the warrant. On 25 August, the bailiff gave notice of an appointment on 9 September 2015 and on 3 September 2015, the appellant applied to the court to stay the warrant.

On 4 November 2015 District Judge Scannell dismissed the appellant’s application. She found that the appellant had breached his tenancy and that the warrant had been appropriately issued under CPR r 83.26 which provides:

“(1) 
A judgment or order for the recovery of land will be enforceable by warrant of possession.

(2) 
An application for a warrant of possession –

(a) 
may be made without notice …”

The appellant appealed. On 18 January 2016, HHJ Bidder QC held that pursuant to CPR r.83.2(3)(e) the respondent authority required the court’s permission before a warrant for possession can be requested.

CPR r.83.2(3)(e) provides, that:

“(3) A relevant writ or warrant must not be issued without the permission of the court where…

(e) 
under the judgment or order, any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged that the condition has been fulfilled…”

 

The Judge considered thatr.83.26 was directed, as far as landlord and tenant cases were concerned, to simple situations where the court had made an order for possession and the tenant had not complied with the order and had remained in possession after the date for possession and has refused to leave.

Nevertheless, the Judge dismissed the appeal. The Court had the power under r.3.10 to remedy the error in procedure.

The Court of Appeal

The appellant appealed to the Court of Appeal. The appeal was heard by Lady Justice Arden and Lord Justice Briggs.

At that hearing it was “common ground” between the parties that r.83.2(3)(e) was the rule that applied. The local authority had informed the court that Cardiff has changed its systems so that, in future, applications for enforcement of possession where there has been a breach of an SPO would be issued under r.83.2(3)(e).

Therefore, it was not an issue before the Court of Appeal whether the judge was right on r.83.2.  Nevertheless, in orbiter comments in her judgment, with which Briggs LJ agreed, Arden LJ held that HHJ Bidder QC was correct to apply r.83.2(3)(e) rather than r.83.26.

The appeal turned solely on one issue: could the court validate a warrant of possession where the landlord who seeks to enforce his right to possession because of an alleged breach of the terms of an SPO has not complied with r.83.2?

The Court of Appeal held that the Court clearly has power to do this under r.3.10. There was a procedural defect which the Court could cure under that rule.

Comment

It is unfortunate that the question of whether a landlord must seek the Court’s permission to enforce an SPO was not argued before the Court of Appeal. In the circumstances the Court simply assumes that permission is required without there having been full consideration of the relevant provisions and prior case law.

As practitioners will know this is contrary to established practise and contrary to previous case law. See, eg. Leicester City Council v Aldwinckle (1992) 24 HLR 40, Jephson Homes Housing Association v Moisejevs & Anor (2001) 33 HLR 54, St Brice v Southwark London Borough Council [2001] EWCA Civ 1138; [2002] HLR 26.

 

In St Brice v Southwark London Borough Council the Court of Appeal held that the issue of a warrant was an administrative and not a judicial process. As Arden LJ identifies this puts the onus on the tenant if he considers that the conditions for suspension have not been breached to apply for a stay of a warrant. By contrast, in the High Court, by r.83.13 the landlord must apply to the court for permission to enforce the order and must notify the tenant before making the application.

 

As is set out in the Court of Appeal’s judgment r.83.2(e) was introduced by the rules committee in 2014. At (3) Arden LJ states:

 

“While it is not possible to ascribe the reason for the insertion into the rules in 2014 of a new CPR 83.2 to the decision in Brice, clearly CPR 83.2 addresses what might reasonably have been considered to be a weakness of the system, namely that there was no judicial scrutiny of the landlord’s case that the conditions had been breached.”

However, it seems unlikely that the amendment to r.83.2 was a result of the decision in St Brice. Not least because the amendment to the rules came some 13 years after that decision. It would also be surprising, if that was the aim, that the rules committee would not simply amend r.83.26 to reflect r.83.13.

 

In any event it is arguable that the conclusion on the applicability of r.83.2(e), and the concession made by Cardiff, was wrong. R.83.2(3)(e) requires the permission of the court where “under the judgment or order, any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged that the condition has been fulfilled…”. It is difficult to see how a tenant’s failure to comply with a term of suspension could be classed as “the fulfilment of a condition”. There is no “condition” to fulfil: the landlord has been granted his remedy albeit suspended on terms that the tenant does (or does not do) something. It would be a very strange use of language if the breach of an SPO was classed as a condition being fulfilled.

Nevertheless, despite the fact that the Court of Appeal’s comments on the matter are orbiter that is where we are now.  It is unlikely to be the last we hear on the issue. Practitioners acting for both landlords and tenants will no doubt be paying careful attention to these cases for the foreseeable future. Those acting for landlords who have not sought permission, will, for now at least, be arguing that the “error” should be remedied under r.3.10.

 

 

 

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The Right to Buy- Where are we now?

The Right to Buy was introduced by the Housing Act 1980. Just under 2 million local authority properties have since been sold under the policy. The UK now faces an unprecedented housing crisis and Local Authorities are struggling with a chronic shortage of housing stock, with c.40 percent of homes purchased under right to buy now in the hands of private landlords.

In this post Alice Richardson considers the recent and impending changes to right to buy across the UK and the increasing divergence of policy between Parliament and the devolved administrations of Scotland, Wales and Northern Ireland.

When does the right arise?

The right to buy arises after a tenant has spent a specified period of time as a public sector tenant: Sch.4 para.6 Housing Act 1985.  Currently the tenant must, however, be a secure or flexible tenant at the date of his application. The specified period is five years in Wales or  three years in England: s.119.

The right is lost if the tenant ceases to be a secure or flexible tenant before he acquires the freehold or leasehold interest in the property e.g. he no longer occupies the property as his only or principal home: Sutton LBC v Swann (1986) 18 H.L.R. 140.

 

How much is the discount?

If the property is a house (and the tenancy began after 18 January 2005) the discount is 35 per cent at the date the right to buy arises plus 1 per cent for each further year, to a maximum of 60 per cent: s.129(2)(a) Housing Act 1985. The starting discount is 32 per cent if the tenancy began before 18 January 2005: s.180 Housing Act 2004.

 

If the property is a flat (and the tenancy began after 18 January 2005) the discount is 50 per cent at the date the right to buy arises plus 2 per cent for each further year, to a maximum of 70 per cent: s.129(2)(b). The starting discount is 44 per cent if the tenancy began before 18 January 2005: s.180 Housing Act 2004.

The landlord may require the tenant to repay anything up to the full discount if the property is sold within five years of it being purchased: s.155(2) and s.155A(2).

By the Housing (Right to Buy) (Limit on Discount) Order 1998/2997 the Labour government set the maximum discount at between from £22,000 and £38,000 (varying by region).

In April 2012, the government repealed the 1998 Order and in 2014 the Housing (Right to Buy) (Limit on Discount) (England) Order 2014/1378 increased the maximum discount to £77,000 in England and to £102,700 in London. By the Housing (Right to Buy) (Limit on Discount) (England) Order 2014/1378 from April 2015 the maximum discount has increased at the same rate as the percentage change in the consumer prices index from the preceding year.

The maximum discount in Wales is currently considerably lower than in England at £8,000: Housing (Right to Buy) (Limits on Discount) (Wales) Order 1999/292, Housing (Right to Buy and Right to Acquire) (Limits on Discount) (Amendment) (Wales) Order 2015/1349.

 

Where are we now?

The Scottish Parliament, having increasingly restricted scheme, abolished the Right to Buy from 1st August 2016: s.1 Housing (Scotland) Act 2014. Announcing the intention to do so in July 2013, then Deputy First Minister, Nicola Sturgeon said:

“We can no longer afford to see badly needed homes lost to the social sector. That is why I am today announcing the final stage of the abolition of the right to buy – a decision that will safeguard Scotland’s social housing stock for the benefit of citizens today and for our future generations.” (The Scottish Government, Safeguarding Scotland’s social housing, 3 July 2013)

 

The Welsh Assembly have announced plans to do the same. The Legislative Programme for 2016-17 contains a commitment to bring forward a Bill to abolish the Right to Buy and Right to Acquire in Wales:

“…we will bring forward a Bill to abolish the right to buy and the right to acquire. We must safeguard our social housing stock in Wales and ensure it’s available to people who need it and who are unable to access accommodation through home ownership or the private rented sector. We need to build more homes, and this Government is committed to delivering an extra 20,000 affordable homes during this Assembly term, but we must also tackle the pressure on our current social housing stock. This Bill will seek to protect that stock from further reductions. The analogy I’ve used before is that it’s like trying to fill the bath up with the plug out.”

In Northern Ireland, the equivalent of the right to buy is the “House Sales Scheme” and the maximum discount is £24,000. Although the Executive has not indicated any planned changes as yet, the Stormont Agreement, A Fresh Start (November 2015) includes the following:

“The Executive is also committed to progressing significant structural reform of social housing provision. This will be focused on reducing the Departmental Expenditure Limit subsidy pressures.”

 

Expansion of the Right to Buy in England

Meanwhile the Conservative government continue to expand the Right to Buy in England. The Party’s 2015 Manifesto set out an intention to extend the Right to Buy to housing association tenants and require local authorities to sell off their most valuable properties in order to pay for it.

 

Before the Housing and Planning Bill 2015-16 was introduced the National Housing Federation (NHF) proposed the implementation of an extended Right to Buy on a voluntary basis only. The offer was described as a compromise which would allow Housing Associations to refuse the right to buy in relation to certain properties.

 

On 7th October 2015, David Cameron announced that agreement had been reached on the offer and that the first housing association tenants would be able to buy their homes in 2016. During the Autumn Statement and Comprehensive Spending Review 2015 the Chancellor announced that the extended right to buy would be piloted by five housing associations.

 

The Housing and Planning Act 2016

The Housing and Planning Act 2016 does not, therefore, contain a statutory Right to Buy.  However provisions are made for, inter alia, the funding of the voluntary right to buy.

s.64 of the Act enables the Secretary of State to pay grant to private registered providers to cover the cost of a discount awarded to the tenant of a provider when buying their home from that provider and s.65 enables the Greater London Authority to make equivalent grants in respect of Right to Buy discounts for dwellings in Greater London.

 

ss.69-79 enables the Secretary of State to require local housing authorities to make a payment to the Secretary of State calculated by reference to the market value of the higher value vacant housing owned by the authority.

 

s.76 places a duty on local housing authorities to consider selling such housing and enable the Secretary of State to enter into an agreement with a local authority to reduce the amount of the payment.

 

These payments will, apparently, be used to compensate housing associations for selling housing assets at a discount to tenants.

 

Comment

The extension of the right to buy to housing association tenants was the subject of an inquiry by the Communities and Local Government Select Committee. The Committee concluded in their report that:

“The extended Right to Buy is designed to increase home ownership and increase housing supply. We support these aspirations and the principle of giving people the opportunity to buy their own home. Despite this, we feel that there are unresolved issues and remain concerned that the Government’s policies could have a detrimental effect on the provision of accessible and affordable housing across all tenures, particularly affordable rented…”

 

Unsurprisingly the report also found that large numbers of homes sold through the statutory Right to Buy for council tenants had in a relatively short space of time become rental properties in the private sector. Selling social housing assets at a discount, only for them to become both more expensive and possibly of lower quality housing in the private rented sector was therefore a significant concern.

 

Regarding the funding of the Right to Buy discounts for housing association tenants with the proceeds from the sale of high value council homes the Committee were of the view that public policy should usually be funded by central Government, rather than through a levy on local authorities.

In a separate report the Public Accounts Committee criticised the fact that many key policy details have not been clarified, with only vague assurances as to how it will be funded, without producing any figures to demonstrate that additional funding from central or local government will not be required. Other concerns included the extent to which the new homes funded by the policy will be genuine replacements for those sold, and whether there will be sufficient controls to prevent abuse of the scheme (Committee of Public Accounts, Extending the Right to Buy to housing association tenants, HC 880 2015-16, April 2016).

A further difficulty with the scheme may be that different approaches to exemptions by different housing associations could give rise to claims for judicial review. Five housing associations are currently piloting the voluntary right to buy and the pilot schemes will run to January 2017. An evaluation report, due in September 2016, is yet to be published but is no doubt anticipated with interest by tenants, housing associations and their lawyers.

 

 

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The Equality Act – what next?

In March this year The House of Lords Select Committee on the Equality Act 2010 and Disability published its report on the Act’s impact on disabled people and concluded that the Government was failing disabled people. In July the Government published its response.

In this post Alice Richardson considers the findings and recommendation of the report so far as it relates to housing.

THE EQUALITY ACT 2010

Disability is a protected characteristic for the purposes of the Equality Act 2010 (“the Act”): s.4.  A person has a disability if they have a physical or mental impairment, and the impairment has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities: s.6(1).

A person who manages premises must not discriminate, harass or victimise occupiers with certain protected characteristics including, inter alia, disability: s.35. For example, a person who manages premises must not, discriminate against a person who occupies the premises by evicting them (or taking steps for the purpose of securing their eviction): s.35(1)(b).

s.15 of the Act prohibits direct discrimination and was introduced with the aim of restoring the protection of the Disability Discrimination Act 1995 following Lewisham LBC v Malcolm [2008] UKHL 43; [2008] 3 W.L.R. 194. In addition, s.19 prohibits indirect discrimination and ss.20-21 contain the duty to make “reasonable adjustments”.

 

s.149 introduced the Public Sector Equality Duty (“PSED”) which requires a public authority to have due regard to the need to:

(a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;

(b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;

(c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

 

THE HOUSE OF LORDS REPORT & THE GOVERNMENT RESPONSE

In summary the committee considered that much more needs to be done towards fighting disability discrimination. Changes made by the Government under the ‘Red Tape Challenge’ increase the problems of disabled people. The Government, instead of concentrating on the burden on businesses, should be looking at the burden on disabled people.

The PSED

 

The PSED was considered the be fundamentally flawed. The Committee felt that the provision allows public authorities to consider all the evidence, but still to pursue plainly discriminatory policies. The committee recommend that the wording be strengthened, so that the discriminatory consequences of decisions can no longer be ignored. The report recommend that a new subsection should be added to section 149: “To comply with the duties in this section, a public authority in the exercise of its functions, or a person within subsection (2) in the exercise of its public functions, shall take all proportionate steps towards the achievement of the matters mentioned in subsection (1).”

 

The Select Committee also made recommendations regarding changes to the Equality Act 2010 (Specific Duties) Regulations 2011.

The Government response to all of the recommendations on the PSED was that following Lord Haywood’s review in 2013, which recommended a further review in 2016, the Government is considering a further review and will ensure that the Select Committee’s concerns and recommendations are taken into account in any such review.

The Committee also recommended that the Government produce an assessment of the cumulative impact of budgets and other major initiatives on disabled people. In response the Government stated that they continue to keep the issue under review but are not convinced by the argument that such analysis would be practical. Moreover, the Government felt it important to recognise that once funding has been allocated, individual departments have the delegated authority/responsibility for determining their spending priorities which they do in a way that fully complies with the Public Sector Equality Duty.

Common Parts

 

s.36 and schedule 4 of the Act contain provisions on reasonable adjustments to the common parts of buildings, such as blocks of flats. These provisions are not yet in force. They would require those responsible for common parts to agree to adjustments when requested by a disabled tenant if, after consultation with other residents, they considered it reasonable. The landlord could require the disabled tenant to pay for the alteration.

 

The report heavily criticised the delay in bringing s.36 in to force which is largely due to the Government awaiting the outcome of implementation of a similar provision (s.37) in Scotland. s.37 is in force in Scotland but has no effect until regulations are made. As yet there are no regulations in Scotland and so, as yet, there is no Scottish experience to draw on.

In its response the Government expressed concern that the consequences of implementing the provisions is unclear. In particular, the Government stated that although requests for reasonable adjustments to common parts are in the first instance matters between disabled tenants and their landlords, these have wider implications concerning the funding of any adjustments, the impact on private landlords, any consequences for landlords’ willingness to let premises to disabled tenants.  There will therefore be further review of s.36 before any decision on implementation will be taken.

County Court discrimination claims

It was recommended that HM Courts and Tribunals Service be required to collect from all county courts and to make publicly available, data relating to disability discrimination claims separately from other claims, as they do in employment tribunals. In response the Government stated that HMCTS does not currently track equality related claims because the numbers are small and staff do not routinely inspect this level of detail in the grounds for claim. Collecting this data for civil court claims and in the Employment Appeal Tribunal (EAT) would require a potentially significant investment of resources which could not be justified given the need to address the ongoing fiscal challenge.

Claims brought by charities

The committee recommended that the Government consider changing the law to allow charities and other bodies which do not themselves have a legal interest to bring proceedings in the interests of classes of disabled people who are not themselves claimants to enable them to remedy action already taken by a public authority or to prevent anticipated action.

In response the Government reiterated that judicial review claims can be brought in matters in which the groups they represent have an interest. Therefore, groups can, to a considerable extent, take remedial action against a public authority or prevent anticipated action by public authorities.

Inaccessible housing

 

The committee considered that local authorities should revise their planning policies so as to require new houses to be wheelchair accessible or adaptable. London has already done so and other authorities were encouraged to follow.

The Government believes that local planning authorities remain best placed to determine the extent to which provision of more accessible housing is necessary and appropriate in their local area, and have appropriate powers to introduce development plan policies to meet these needs.

COMMENT

The Government’s response to the Select Committee report was described by Committee chairman, Baroness Deech, as “buck-passing and dragging of heels” when the report was debated in the House of Lords on 6th September 2016. So far as the recommendations which affect housing lawyers are concerned there does seem to be an element of heel-dragging.

A further review of the PSED, if there is one, will take some time. The duty is not, of course, an obligation to achieve a particular result, only to have regard to the identified factors: R (Karia) v Leicester CC [2014] EWHC 3105 (Admin). Requiring public bodies to demonstrate that they have taken all proportionate steps towards the achievement of the matters at s.149(1) is welcome and may, in some cases, result in the public body turning its mind to the PSED more carefully but ultimately will not require that they reach a particular decision. It is unlikely, therefore, that the provision will, even if amended, have the “bite” that some groups seek.

The failure to bring s.36 in to force was rightly criticised. The Government’s explanation for the delay is not at all satisfactory given that it is now six years since the Act received Royal Assent. The original decision to await the outcome of implementation of the Scottish provisions was entirely misconceived in any event given that leasehold interests do not even exist in Scotland. Nevertheless, we shall have to await the outcome of another review before any progress is made.

With regards to the Government’s response to the recommendation that HMCTS record and publish the number of Equality Act claims it is not entirely convincing that court staff wouldn’t be able to record the number of Equality Act claims relatively easily and without large investment of resources. Further it is unclear how the Government reached its conclusion that that the numbers of such claims are as small, given the apparent lack of data.

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Allocation, Allocation, Allocation (Part 2)

In this post Alice Richardson considers the second of two recent challenges to allocation schemes: R (YA) v Hammersmith and Fulham LBC [2016] EWHC 1850 (Admin). Part 1 looked at R (Woolfe) v Islington LBC [2016] EWHC 1907 (Admin) and is available here.

 

In R (YA) v Hammersmith and Fulham LBC the Defendant’s allocation scheme provided that persons who had been guilty of unacceptable behaviour which made them unsuitable to be tenants were, save for in exceptional circumstances, disqualified from the housing register. The Claimant challenged the Defendant’s refusal to enter him onto their housing register due to his serious, but now spent, criminal record.

 

Housing Act 1996

The allocation of housing by local housing authorities is governed by Pt.6, Housing Act 1996. A local housing authority must have an allocation scheme for determining priority and must allocate housing accommodation in accordance with that scheme: s.166A(1). Each scheme must be framed so as to secure that persons falling within the categories in s.166A(3) are given a reasonable preference. Subject to s.166A(3) an authority may determine which classes of persons qualify for assistance under its scheme: s.160ZA(6)-(8).

 

Rehabilitation of Offenders Act 1974

Generally, by s.1 Rehabilitation of Offenders Act 1974, unless the sentence imposed in relation to a conviction is an excluded one, a conviction becomes “spent” and the convicted person becomes a “rehabilitated person” after the end of the applicable rehabilitation period set out in s.5 of the Act.

 

By s.4(1) of the Act, subject to certain exceptions, a person who has become a rehabilitated person shall be treated for all purposes in law as a person who has not committed, been charged with, prosecuted for, convicted of or sentenced for the offence or offences which were the subject of that conviction. Generally, no evidence shall be admissible in any proceedings before a judicial authority exercising its jurisdiction or functions to prove that any such person has committed, been charged, prosecuted for, convicted of or sentenced for any offence which was the subject of a spent conviction.

 

By s.4(2), subject to certain provisions, where a question seeking information with respect to a person’s previous convictions, offences, conduct or circumstances is put to him or to any other person otherwise than in proceedings before a judicial authority the question shall be treated as not relating to spent convictions or to any circumstances ancillary to spent convictions.

By s.4(5)(b) for the purposes of s.4 and s.7 of the Act the conduct constituting the offence is defined as “ancillary to a conviction”.

 

s.7 sets out certain limitations on “rehabilitation” under the Act. By s.7(3):

“If at any stage in any proceedings before a judicial authority… the authority is satisfied… that justice cannot be done in the case except by admitting or requiring evidence relating to a person’s spent convictions or to circumstances ancillary thereto, that authority may admit … the evidence in question …”

 

Article 14 ECHR

Article 14 provides that:

“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

 

Differential treatment is discriminatory if it has no objective and reasonable justification or is disproportionate: Stec v United Kingdom (2006) 43 E.H.R.R. 47.

 

R (YA) v Hammersmith and Fulham LBC [2016] EWHC 1850 (Admin)

Hammersmith and Fulham’s allocation scheme disqualified certain classes of applicant from the register even though they fell within a reasonable preference category including, inter alia, “applicants who have been guilty of unacceptable behaviour which makes them unsuitable to be a tenant”.

 

Hammersmith and Fulham also operated a ‘Care Leavers’ Quota’ which applied to ‘looked after’ children who leaving local authority care. Each financial year, a quota of social housing units was allocated for Care Leavers by Housing Options within its Housing Allocation Scheme. The Care Leaver had to meet the qualification criteria for social housing as set out in the Allocation Scheme. In exceptional circumstances the Director of Housing Options, Skills and Economic Development had the discretion to override the qualification criteria.

 

The Claimant was a Somali national who came to the UK as a refugee in around 2002. He was taken into care by the Defendant’s social services team at the age of 11 after suffering a serious assault. Between the ages of 12 and 15 he had committed a number of criminal offences for which he was convicted. The offences included theft, assaulting a police officer, assault occasioning actual bodily harm, criminal damage, robbery, receiving stolen goods, possession of class A drugs, burglary and fraud offences.

 

After January 2012 the Claimant had not committed any offences and the evidence suggested that he had “turned his lifestyle around” over the next few years. He went to college and had long term plans to attend university. He had moved into semi-independent living aged 16 and was described by a social worker as an “ideal candidate for social housing”.

 

By a review decision dated 29th October 2015 Hammersmith & Fulham confirmed that the Claimant’s application to join the housing register had been rejected. Due to his significant offending history he had been ‘guilty’ of unacceptable behaviour and therefore considered unsuitable to be a tenant. It had been noted that he had not been found guilty of any offences since 2012 and it was accepted that the convictions had all become “spent” but nevertheless no discretion was awarded.

 

The Claimant was given permission for judicial review on following grounds:

  1. The decision amounted to a breach of s.4(1) of the Rehabilitation of Offenders Act 1974.
  2. The decision was irrational.

 

A renewed permission application was also made in respect of a further ground:

  1. The decision was in breach of Article 14 of the European Convention on Human Rights on the basis that it gives rise to indirect discrimination against the Claimant as a “Care Leaver”.

 

The Claimant argued that the wording of section 4(1) was plain and that he must be ‘treated for all purposes in law as a person who has not committed… the offence’. The Defendant argued that it was entitled to take into account the behaviour of the Claimant that led to the convictions.

 

Mr. Peter Marquand, sitting as a Deputy Judge of the High Court, held firstly that what the Defendant had taken account of was a list of convictions which clearly fell within s.4(1). Inferences as to behavior had been made from those convictions and so the Judge then went on to consider whether s.4(1) includes the circumstances ancillary to a conviction, in particular ‘the conduct constituting that offence or those offences’. He held that looking at s.4 as a whole and considering the purpose behind it was the circumstances ancillary to a conviction did fall within s.4(1) and therefore details of the Defendant’s conduct and behavior which formed the basis for the convictions fell within the prohibition.

 

The Defendant argued that it was able to rely on the limitation in s.7(3) but the Judge agreed with the Claimant that consideration of a housing application does not amount to ‘proceedings before a judicial authority’.

 

Due to his decision on the first ground the Judge did not think it necessary or proportionate to go on to consider the irrationality ground given that the scheme itself was not being challenged. However the Claimant did challenge the policy as a whole under his third ground; breach of Art.14.

 

The Judge held that the process did fall within the ambit of Art.8 and therefore Art.14 applied, being a care leaver was an “other status” and there is a potential for indirect discrimination. However, the discrimination was justified. The Defendant’s evidence was that provision had been taken to prevent people with histories of anti-social behaviour being allocated very scarce social housing resources partly due to fairness but also due to community safety and well-being and a prudent use of limited public resources. Anti-social behaviour is a long-standing and difficult problem is to deal with which sometimes involves very serious and adverse consequences for other tenants, residents or staff.

 

Comment

The decision on Art.14 is not entirely surprising. Firstly, the Judge acknowledged that whilst there is no absolute right to accommodation this did not prevent the allocation scheme from coming within the scope of Art.8. and the evidence demonstrated the link between the process, private life and the need for settled accommodation for vulnerable individuals.

 

As to the question of ‘other status’ the Judge, following, R (RJM) v the Secretary of State for Work and Pensions [2008] UKHL 63, held that the Care Leavers have had something ‘done to them’ in that they have been looked after by a local authority under a statutory regime and as a result of that they will have personal characteristics given their experiences of being in care. This may be of some wider significance given that there doesn’t seem to be any previous authority on the status of care leavers.

 

Considering the potential for discrimination the Judge followed Burnip v Birmingham CC [2013] PTSR 117 and held that there is no need for statistical evidence or for a comparator to establish discrimination under Article 14. In any event the evidence indicated that care leavers are likely to have a higher level of criminal convictions and behaviours and would therefore be disproportionately affected by the exclusion from the housing register.

 

Lastly, there was a wide margin of appreciation for any justification. The Defendant had to consider the rights and interests of the whole of its community and the exclusion form the register of those “who have been guilty of unacceptable behaviour which makes them unsuitable to be a tenant” was a proportionate measure striking a fair balance between the rights of the individual and that of the community.

 

The decision on the first ground may be of interest to other authorities who operate a similar scheme and to those who represent applicants falling within them (though they may be relatively few in number). Whilst the decision may seem fair for the Claimant in this case it does lead to the odd situation, as pointed out by Counsel for the Defendant, whereby anti-social behaviour that was less serious and did not result in a criminal conviction could be taken into account but behaviour that was more serious and resulted in a criminal conviction (which then became spent) could not.

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Allocation, Allocation, Allocation (Part 1)

In this post Alice Richardson considers the first of two recent challenges to allocation schemes: R (Woolfe) v Islington LBC [2016] EWHC 1907 (Admin), Part 2 will consider R (YA) v Hammersmith and Fulham LBC [2016] EWHC 1850 (Admin).

 

In R (Woolfe) v Islington LBC the claimant challenged the points “threshold” set by Islington for bidding, argued that the threshold was a breach of s.11 Children Act 2004 and contended that she should have been awarded additional points under the authority’s “New Generation” scheme.

 

Mr Justice Holman opened his judgment with the observation that:

 

“the schemes of local housing authorities for allocating their scarce social housing stock seem to be fertile ground for litigation”

 

Indeed this blog addressed the High Court’s “re-found lack of deference to authorities’ allocation schemes” in a blog post in April of this year.

 

Part 6, Housing Act 1996

The allocation of housing by local housing authorities in England is governed by Pt.6, Housing Act 1996. A local housing authority must have an allocation scheme for determining priority and must allocate housing accommodation in accordance with that scheme: s.166A(1). Generally, an authority may determine which classes of persons qualify for assistance under its scheme: s.160ZA(6)-(8).

 

That discretion is, however, subject to the “reasonable preference” categories in s.166A(3).

Each scheme must be framed so as to secure that persons falling within these categories are given a reasonable preference. These categories include, inter alia, homeless persons to whom the “full” housing duty is owed under s.193(2), Housing Act 1996: s.166A(3)(a).

 

Therefore the discretion under s.160ZA cannot be used to exclude a person who is entitled to a reasonable preference under s.166A(3): R. (Jakimaviciute) v Hammersmith and Fulham LBC [2014] EWCA Civ 1438; [2015] H.L.R. 5. See also R. (Alemi) v Westminster CC [2015] EWHC 1765 (Admin) in which it was held that a policy which prevented a person owed the duty under s.193(2) from bidding for social housing for 12 months was unlawful as incompatible with s.166A(3) and R (HA) v Ealing LBC [2015] EWHC 2375 (Admin) in which it was held that a requirement that an applicant must have been resident in the borough for five years was also unlawful insofar as it excluded persons who were entitled to a reasonable preference.

 

R (Woolfe) v Islington LBC [2016] EWHC 1907 (Admin)

The claimant was a pregnant single woman who was owed the full housing duty under s.193(2). Islington arranged temporary accommodation for her and she was registered the housing register.

 

Islington operate a points-based allocation scheme under which the claimant was awarded 110 points (100 for being homeless and 10 for local residence). However, the allocation scheme included provision to set a points “threshold” for bidding on the choice-based lettings system. The threshold had been set at 120 points and therefore although the claimant was on the housing register she wasn’t actually able to bid for properties.

 

The claimant issued judicial review proceedings alleging, firstly, that the application of a points threshold was unlawful insofar as it applied to persons entitled to a reasonable preference.

 

Islington’s evidence was that the threshold assisted in managing the bidding process by limiting the volume of applicants who are bidding and confining this group to those who have a realistic chance of actually being re-housed under the scheme. There is an acute shortage of available accommodation relative to the very large number of applicants. In 2014-15 no applicant had been successful with fewer than 129 points for any type of property.

 

Mr Justice Holman held that the points threshold did not offend s.166A(3). In doing so he distinguished Jakimaviciute, Alemi and HA. In Jakimaviciute and HA the claimants had been excluded from registering altogether. In Alemi there was an absolute bar against bidding for 12 months, whereas in the present case only those who were not eligible for 120 or more points were unable to bid.

 

The Judge held that it was entirely lawful for Islington to operate a threshold and that the level at which they set their threshold is a matter for their judgment, not that of the court.

 

The claimant’s second ground was that the threshold was a breach of s.11(2) Children Act 2004 which required Islington to make arrangements to ensure that they have regard to the need to safeguard and promote the welfare of children when discharging any functions. For similar reasons the judge found that there had been no breach. Islington’s scheme allowed for additional points to be awarded for welfare and the evidence showed that that there was a joint working protocol between the housing and social services departments so that when considering whether to award welfare points housing would contact social services and that they did so in the present case.

 

Islington’s allocation scheme also included provision for a “New Generation scheme” under which additional points were awarded to certain applicants who lived with their parents. One of the criterion for the scheme was that “applicants must be living continuously as an agreed member of the household of an Islington resident for at least three out of the last five years”.

 

When the claimant first applied to Islington in June 2015 she did fall within the New Generation scheme, entitling her to an additional 90 points. However, she was then temporarily rehoused by Islington and on their interpretation, the moment the claimant moved into that temporary rehousing she lost her entitlement to 90 points under the New Generation scheme.

 

The Claimant’s third ground was that she was entitled to points under the New Generation scheme because she had been living with her mother in Islington’s district continuously for at least three out of the last five years.

 

The claim was allowed on the third ground. It was arguable that Islington has misinterpreted the policy. If the block of three years has to be continuing at the moment of decision, then the criterion would simply say “for at least the last three years” or some such words. The issue was remitted for reconsideration.

 

Comment

Both parties sought, and were declined, permission to appeal from Mr Justice Holman who nevertheless extended time for renewed applications to the Court of Appeal. It seems likely that one, if not both, will chose to do so.

 

The decision on the first and second grounds may demonstrate that despite recent successful challenges the Court is still mindful of the decision in R (Ahmad) v Newham London BC [2009] UKHL 14 in which, Baroness Hale of Richmond said at paragraph 12:

 

“… no one suggests that [the claimant] has a right to a house. At most, he has a right to have his application for a house properly considered in accordance with a lawful allocation policy. Part VI of the 1996 Act gives no one a right to a house. This is not surprising as local housing authorities have no general duty to provide housing accommodation.”

 

At paragraph 46, Lord Neuberger of Abbotsbury said:

 

“… it is undesirable for the courts to get involved in questions of how priorities are accorded in housing allocation policies … it seems unlikely that the legislature can have intended that judges should embark on the exercise of telling authorities how to decide on priorities as between applicants in need of rehousing, save in relatively rare and extreme circumstances…”

 

The decision on the third ground is problematic for Islington, who may have a number of applicants affected, but it seems unlikely to be of wider importance. Nevertheless, along with the cases mentioned above, it does demonstrate that notwithstanding the decision in Ahmad the Courts are willing to intervene where it is felt necessary.

 

 

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