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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 2015/962) (“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 2015/799) 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 sub-standard 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% 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 here. 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, the landlord must give 28 days’ notice to terminate the tenancy within its first six months and 84 days’ notice to terminate the tenancy thereafter.

 

The landlord is only required to give 28 days’ notice to terminate regardless of the tenancy start date if he is seeking to evict the tenant on grounds of failure occupy the property as his 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 a landlord 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)

 

  1. The property is to be sold by the mortgage lender. (Mandatory)

 

  1. The lender intends to refurbish the property and which will entail significantly disruptive works. (Mandatory)

 

  1. The landlord intents to live in the property as his or her principal home. (Mandatory)

 

  1. A member of the landlord’s family intends to live in the property as his or her only or principal home. (Discretionary)

 

  1. The landlord intends to use the property for a purpose other than providing a person with a home. (Mandatory)

 

  1. 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)

 

  1. 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.)

 

  1. 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)

 

  1. The tenant is not occupying the let property as his or her only or principal home. (Mandatory)

 

  1. The tenant has breached the tenancy agreement (excludes the payment of rent). (Discretionary)

 

  1. 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.)

 

  1. 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)

 

  1. 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)

 

  1. 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)

 

  1. Landlord registration has been refused or revoked by a local authority. (Discretionary)

 

  1. House in Multiple Occupation (HMO) license revoked by the local authority. (Discretionary)

 

  1. 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 the landlord must give a rent-increase notice, the notice period must be 3 months or whatever longer period has been agreed between the landlord and tenant, and the tenant may contest a proposed rent increase by referring the cease to a rent officer for adjudication if they think it is too high. Section 35 also provides that a local authority may make an application to designate all or part of the authority’s 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 1988 (“HA 88”). Under the HA 88, assured shorthold tenants do not enjoy long-term security of tenure and section 21 of the HA 88 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 section 21 HA 88), these are not nearly as ambitious as the Scottish reforms.

 

 

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Bedroom tax: round 2

On 27 April 2017 the Upper Tribunal (‘UT’) handed down judgment in Secretary of State for Work and Pensions v Carmichael and Sefton BC (HB)  [2017] UKUT 0174 which was the Secretary of State’s appeal to of the First-tier Tribunal’s (‘FTT’) decision on the Carmichael’s ‘bedroom tax’ appeal.

In this post Alice Richardson considers the judgment and the wider implications for cases in which a court or tribunal holds that subordinate legislation is incompatible with convention rights.

Background

Mrs Carmichael lived with her husband, Mr Carmichael, in a two-bedroom flat. She had spina bifida, hydrocephalus, double incontinence, inability to weight bear and recurring pressure sores. Mr Carmichael was her full time carer. She needed a special bed with an electronic mattress. She also needed a wheelchair beside the bed. Her husband could not share the same bed, and there needed to be adequate space for him and nurses to attend to her needs. There was not enough space for him to have a separate bed in the same room. Their rent was previously met in full by Housing Benefit, but it was reduced by 14 per cent under regulation B13 of the Housing Benefit Regulations 2006 (SI No 213) otherwise known as ‘the bedroom tax’ or ‘the spare room subsidy’ etc.

The First-tier Tribunal decision

On 9 June 2014 the FTT allowed the Carmichaels’ appeal holding that regulation B13 unfairly discriminated against disabled persons who needed an additional bedroom and that there was no objective and reasonable justification for the discrimination.

The decision was somewhat surprising given the Court of Appeal’s decision in the unsuccessful judicial review proceedings involving the Carmichael’s: R (MA and others) v The Secretary of State for Work and Pensions [2014] EWCA Civ 13.

Further the FTT judge went on to read words into the regulations purportedly under section 3(1) of the Human Rights Act (HRA) 1998 in order to avoid a breach of Mr Carmichael’s human rights.

The Secretary of State sought permission to appeal that decision and the application was stayed pending the outcome of the Supreme Court decision in the judicial review proceedings.

The Supreme Court decision

On 9 November 2016 the Supreme Court held that the bedroom tax regulations were a breach of the Carmichaels’ human rights:  R (MA and others) v The Secretary of State for Work and Pensions [2016] UKSC 58 (our post here).

On the same day the Department for Work and Pensions had issued local authorities with a ‘Housing Benefit Urgent Bulletin’ advising local authorities that they ‘must continue to apply the rules when determining housing benefit claims as they did before today’s judgment’ and that ‘the Department is considering the Court’s judgment and will take steps to ensure it complies with its terms in due course’.

The Housing Benefit and Universal Credit (Size Criteria) (Miscellaneous Amendments) Regulations 2017 (SI No 213) were not laid before Parliament until 2 March 2017.

In our post on that decision we queried how tribunals were to deal with people in the same position as the Carmichaels and the Rutherfords pending the amended regulations because it was not open to the tribunal to read words into the regulations under  HRA 1998 s3(1) (as the FTT judge in this case had already done).

The Upper Tribunal appeal

Given the decision of the Supreme Court it may seem surprising that the Secretary of State continued to pursue an appeal of the FTT decision. However, there remained the unresolved jurisdictional point framed as:

‘whether statutory tribunals have the jurisdiction to develop bespoke solutions to Convention violations (discrimination or otherwise) on a case by case basis’.

In other words, having found the regulations to amount to a convention violation, was the FTT still bound by them or was it entitled to dis-apply the regulations?

In the Upper Tribunal (UT) it was common ground between the parties that the FTT’s interpretation had not been open to it, since it went beyond any interpretative reading permitted by HRA 1998 s3(1).

The Secretary of State’s position was that in the period between a Court identifying a breach of Convention rights by the operation of secondary legislation (such as reg B13) and Parliament taking steps to rectify that incompatibility then ultimately a claimant’s only recourse to make good the consequential financial loss was to bring civil proceedings in a court for damages under HRA 1998 s8(2).

On the Carmichaels’ behalf it was argued that the approach taken in Mathieson v Secretary of State for Work and Pensions [2015] UKSC 47 should apply. There was no obligation in the primary legislation to make the 14 per cent reduction; the requirement was contained in the secondary legislation. Mathieson demonstrated that in such circumstances the Tribunal should allow the appeal, set aside the offending decision by the initial decision-maker and substitute a decision that the claimant was entitled to the continued payment of benefit at a rate unaffected by the action which would otherwise be a breach of the claimant’s Convention rights.

The Upper Tribunal decision

The UT concluded that Mathieson applied and that courts and tribunals ultimately have the power to order that to the extent that subordinate legislation is incompatible with a person’s Convention rights it should not be given effect to in determining the person’s lawful entitlement, or should be otherwise applied or dis-applied in a way that does not breach the person’s Convention rights. That course of action was held to be a ‘relief or remedy’ which a court or tribunal may make ‘within its powers as it considers just and appropriate’ under HRA 1998 s8(1).

The FTT had arrived at the correct outcome but by the wrong route. The FTT should have directed the local authority to calculate the claimant’s housing benefit entitlement without making a deduction of 14 per cent for under occupancy to avoid an unlawful breach of the Carmichaels’ human rights. The result was the same, namely that no deduction operated.

Comment

The effects of this case are potentially far-reaching. While the appeal concerned only the Carmichaels’ appeal it was effectively the lead case in a block of some 170 further cases before the UT in England and Wales and around 40 cases pending in Scotland. It is not known how many other cases are pending before the FTT. However, implications of the decision would likely go further than Carmichael-like cases and bedroom tax cases: it effectively confirms that the FTT has powers far beyond what most practitioners previously understood to be the case.

Unsurprisingly the Secretary of State sought permission to appeal the decision. That application was refused by the UT and the DWP has announced that an application will be made to the Court of Appeal.

In the interim, the effect of the UT’s decision was apparently suspended for 28 days from 27 April 2017 (according to gov.uk) presumably leaving the 210+ block of cases in the UT, and however many are pending before the FTT, in limbo once again.

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Joined up thinking

The Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017 (2017/252) came into force on 1st April 2017.

In this post Alice Richardson considers the regulations and their incompatibility with the Government’s support for the Homelessness Reduction Bill 2017 which is currently awaiting Royal Assent.

Background

Former Chancellor, George Osborne, announced the removal of entitlement to the housing element of Universal Credit from certain young people aged 18-21 as part of the Summer Budget in 2015.

The policy had been suggested as far back as June 2012 when then Prime Minister, David Cameron, proposed removing access to Housing Benefit for people aged 16-24 during a speech at Bluewater in Kent. The idea was raised again at Conservative Party Conferences in 2012, 2013 and 2014 by which point, following some criticism, the age range was narrowed to those aged 18 to 21.

The Regulations

The Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017 (2017/252) came into force on 1st April 2017.  The regulations amend the Universal Credit Regulations 2013.

The changes have widely been reported as a withdrawal of housing benefit although the provisions only apply to new claims made after 1st April 2017.

Certain classes of claimant are exempt from the removal, including those who;

  • are responsible for a dependent child;
  • were a care leaver before reaching the age of 18;
  • do not have a parent living in Great Britain;
  • are accommodated in temporary accommodation under Part 7 Housing Act 1996;
  • receive DLA middle-rate care or above, or PIP Daily Living (at either rate);
  • have been subject to, or threatened with domestic violence;
  • cannot live with their parents due to a serious risk to their physical or mental health, and the Secretary of State considers it inappropriate to expect them to do so;
  • earn the equivalent of 16 hours per week at the National Minimum Wage.

 

The Department of Work and Pensions expects that around 11,000 people will be affected by the regulations by 2020/21.

The Homelessness Reduction Bill 2016/2017

The Homelessness Reduction Bill is a Private Member’s Bill introduced by Bob Blackman MP which passed through parliament with Government support and is now awaiting Royal Assent.

If enacted the Bill would make changes to Part 7, Housing Act 1996. It would place duties on local housing authorities to intervene at earlier stages to prevent homelessness and to take reasonable steps to help those who become homeless to secure accommodation. It also requires local housing authorities to provide some new homelessness services to all people in their area and expands the categories of people who they have to help to find accommodation.

Comment

Organisation from across the sector, including Centrepoint, the Chartered Institute of Housing, Crisis, Shelter, the Residential Landlord’s Association and the National Landlord’s Association have all raised concerns with the regulations.

The CEO of the National Landlords Association, Richard Lambert, was reported as saying:

 “Never mind the nuances, all landlords will hear is that 18-21 year olds are no longer entitled to housing benefit.  Faced with a young person who may not be able to pay the rent, a landlord won’t worry about the details of their life, they just won’t consider them as a tenant… However much the Government tries to make this policy more palatable by talking up the exemptions, it still leaves a nasty taste in the mouth”.

The policy was also criticised by Labour’s Shadow Secretary of State for Housing John Healey MP who said:

“This disgraceful cut to housing support will leave thousands of young people with nowhere to go. Many could end up on the streets…”

Of particular concern to many is how a young person who is unable to remain at the family home would demonstrate that to the decision-maker so as to be exempted from the cut. Anyone who has experience of DWP decision-making is likely to be sceptical of Caroline Noakes MP’s assurances that:

“…it is a question of young people informing a work coach, somebody in the local authority or a trusted medical professional of their inability to live at home because their relationship with their parent has broken down, and in those cases they will receive the exemption.

The Regulations come at a time when homelessness, including street homelessness, is already increasing. The estimated number of rough sleepers in England has increased from 1,768 in 2010 to 4,134 in 2016 according to “Rough Sleeping in England”.

In an article dated 6 March 2017 Inside Housing reported that the regulations “…could place 9,000 at risk of homelessness” and reported concerns that, if youth homelessness increases, it could “wipe out” almost all of the forecast savings.

On 5th April 2017 the Residential Landlord’s Association reported that their survey of more than 1,000 landlords found that 76% fear the measures will leave under 21s unable to pay their rent, making landlords less likely to let property to those in this age group.

On announcement of the regulations Crisis urged the Government not to continue with the “destructive policy” commenting that:

“The Government has made positive steps towards preventing homelessness in recent months, including pledging its full support for the Homelessness Reduction Bill… today’s announcement runs entirely counter to those aims and could have disastrous consequences…”

(Crisis, 18-21 year olds at greater risk of homelessness as Government announces benefit cuts, 6 March 2017)

Although the Bill arguably does not go far enough to tackle the growing homelessness crisis, it is very much considered to be a positive step. As is the Government support it has received. The introduction of the regulations, which have been so heavily criticised and risk increasing youth homelessness, does somewhat undermine that support.

Furthermore, researchers at Heriot-Watt University predict that the likely savings would actually only be around £3.3 million. Of course, if a young person becomes homeless as a result of losing of the policy this will ultimately cost the taxpayer. The researchers estimated that only 140 people would need to become homeless for the policy to cost more than it saves.

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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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