The Shape of Things to Come.

In which two [now confirmed as four] Housing Associations behave very badly in anticipation of the benefit cap.

Haringey is one of the pilot boroughs for the benefit cap, limiting the total amount of benefit, including housing benefit/LHA (and astonishingly Child Benefit) that any household can receive to £500 per week. The prospective effects of the benefit cap on housing provision and the homeless have become apparent in the astonishing actions of two [now three] Housing Associations.

First up, and in Haringey, Genesis. The Guardian reported on ‘eviction letters’ being send to Genesis tenants because of the benefit cap. Although it isn’t clear from the report, I’ve established that these were all people who were on assured shorthold tenancies, organised through Haringey Council as temporary accommodation for homeless applicants to whom Haringey owed a duty under Part VII Housing Act 1996. The properties are leased by Genesis from private landlords.

Here is the letter Genesis were sending out. The opening paragraphs state pretty unequivocally what the reason is for the letter and what Genesis are going to do.

Genesis letter extractThe letter goes on to state:

Second genesis ectract

And it is signed by someone describing themselves as a ‘Legal Administrator’.

From this, it seems pretty clear what Genesis are doing. Having identified households that will be subject to the benefit cap, they are serving section 21 notices and preparing to bring possession proceedings, so that warrants can be sought at short notice if rent arrears build up.

The line about ‘we may have to return properties to the owner’ makes no sense. These are properties that Genesis has leased.

There are, as far as I can see, two options for Genesis’ reasoning here. Either the rent Genesis pays under its leases is close to the rent it charges its homeless tenants, so that any shortfall would be a deficit on the rent Genesis has to pay. Or Genesis wants to maintain its income stream from these properties and is not willing to countenance a shortfall in rent, even if it clears the rent Genesis has to pay the landlord in turn.

However, what is clear is that Genesis are not waiting for arrears to accrue, if indeed they do, but are pre-emptively putting themselves in a position to obtain an eviction warrant should they feel any need or wish to do so.

Haringey Council are reportedly furious. Understandably so, as any households evicted by Genesis would be landed right back on Haringey to rehouse, with all the issues of the benefit cap applying. It will be astonishingly difficult for Haringey to find suitable temporary accommodation, and it appears that at least one social housing provider is pulling out of such provision.

We should note that Genesis have issued a press release in response to the Guardian piece. It says, in part:

Genesis regrets any distress that the letter dated 11 April 2013 and sent out to 57 temporary housing residents in the London Borough of Haringey may have caused to these families. At Genesis we have strict processes in place to ensure all our communications to our residents are of the highest standard, we accept that on this occasion we did not meet this standard.

The letter was not a notice of eviction; Genesis is not evicting, nor has it sought to evict any residents as a result of welfare reform. We have contacted all those that received this letter, to reassure them of this fact.

Genesis acts in partnership for these properties with the London Borough of Haringey and third party landlords.  The nature of temporary housing is such that managing agents have lease obligations, guaranteeing a landlord full vacant possession at the end of the lease. In order to ensure that this happens, a section 21 notice is required. These letters were for that purpose.

Hm. This is routine? They serve Section 21 notices routinely on their AST tenants of leased property? The letter was a bit of a whoopsie? I frankly have my doubts. Anyone fancy a FOI request for relevant decisions and records? Even if the letter was an error, this is clearly an issue and potential policy approach that Genesis have considered, in detail.

My doubts about Genesis mea non culpa were compounded when a letter from another housing association landed in my inbox today. This time it is Newlon Housing Trust and the London borough involved, I believe, is not a benefit cap pilot borough. So, this letter is anticipation of the roll out of the cap in October. Again, it is sent to homeless applicants housed under ASTs as temporary accommodation for the Council. The letter, in whole, is in this image:

Newlon letter

This is quite simply jawdropping bad. Newlon is actually advising the tenants that there is no need for them to do anything about having a possession order made against them, apart from taking it to the homeless unit.

As with the Genesis letter, Newlon are taking pre-emptive possession proceedings based entirely on the prospect of the benefit changes maybe causing a rise in arrears. Again the ‘in case we have to return the property to the owner’ line is trotted out, but makes no practical sense.

One letter might be a bit of a cock up. Two is a trend. Housing Associations’ response to the threat of the benefit cap to the lucrative ‘temporary accommodation’ market is to serve possession proceedings so that tenancies can be terminated as quickly as possible should there be arrears issues.

But what if these proceedings were defended? It seems to me that there is a clear opening for both a public law and human rights Art 8 proportionality defence to these proceedings, based as they are on Section 21 and mandatory possession claims. These are pre-emptive and speculative proceedings. In addition, Newlon’s letter seems to me to teeter on abuse of process, in as much as it actively seeks to discourage tenants from doing anything about the claim and seeking legal advice is not mentioned at all.

And if the claims were defended, the whole aim of quick and easy possession proceedings, enabling quick and easy eviction, would be defeated.

Nonetheless, the actions of these Housing Associations are a clear indication of where the benefit reforms and benefit cap will leave homeless applicants, particularly in London. It is hard to see how and where they could remain in London when even Housing Associations will not provide temporary accommodation affordable under the benefit cap.

[Update. Apparently A2 Dominion have been doing something similar. More when I get details.]

[Update 3 May 2013. New on A2 Dominion.

Yes, A2 Dominion have been doing the same thing, since at least December 2012. LB Ealing tenants in temporary accommodation have been facing possession claims under the accelerated possession procedure following service of s.21 notices.

Here is A2 Dominion's letter to a solicitor, setting out very clearly their rationale for serving a section 21 notice and bringing possession proceedings.

A2 Dominion letterAnd here is the resulting possession order, obtained under the accelerated possession procedure. A2 Dominion's purpose is clear - to be able to obtain vacant possession simply by applying for a warrant of eviction - ahead of anticipated arrears. Ealing is not one of the benefit cap pilot boroughs, so A2 Dominion brought proceedings at least 7 months ahead of the benefit cap coming into effect.

A2 Dominion Order

 

The clear indication is that this is approaching a general practice, at least in London.]

[Update 7 May 2013. And another Housing Association is confirmed as doing the same thing. Here is a February letter to a solicitor from Notting Hill Housing Trust, which is as blunt as blunt can be about the purpose of the section 21 notice served, and about the Housing Association expecting the Council to pick up the burden of rehousing.

Notting Hill letterAgain, if they then pursue possession proceedings, this is simply an attempt to reduce the tenant's security of tenure in advance of anticipated problems after welfare reforms and the benefit cap kick in.]

 

m4s0n501
Posted in Assured Shorthold tenancy, Benefits, FLW article, Homeless, Housing law - All, Licences and occupiers.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +

21 Comments

  1. Good lord. I think they all need to be whacked with rolled up copies of weaver. Responsible public body my backside.

    I imagine newlon will ask for costs of which there is no mention.

    Advising to wait until order made is shocking.

    `we will let the council know if you require to be rehoused` how flippin generous. Love th
    word

    • Gah blasted phone. Love the word `if` as if they would prefer to be on the street.

      Newlon would probably add the bailiff fees to the rent account to.

      Heaven help us!

  2. have a look at Genesis website, terms of their lease for landlords, they guarantee rent but can return the property to it’s owner if they don’t get replacement tenants from the council within 2 weeks.

      • My point is, try to see it from their point of view to get the full picture. G leases flats from private owners. G guarantees rent to those owners. the rent is built on the tenants getting HB. if G cant find tenants to pay those rents it can return the properties to the private owners. the moment the tenants can’t get full HB and incur rent arrears the money comes out of G’s pockets and the scheme does not work, so they need to get possession. the real problem is lack of socially owned affordable housing,

        • Anna

          First you assume that the rent taken by the housing association all goes to the private landlord. We don’t know this, it is entirely possible that any reduction in rent would simply reduce the housing association profits. Second, there is nothing stopping the HA getting possession. What they are doing is attempting to short cut possession proceedings based upon something that may or may not happen. They are dumping their risk onto the council, as the council will have a very reduced time period to try to find alternative temporary accommodation.

          So what the ‘social landlords’ are doing is making the local authorities’ position much, much harder, simply to avoid a hypothetical short term loss in the future. How is that behaving well?

          • Housing Associations are businesses, albeit social ones. It is the local authority that has a duty of care to the homeless not the temporary housing landlord. HAs will have to renegoiate all their leases with the property owners to avoid losing income so they have to act prudently or face large losses.

            If Local authorities are unable to discharge their duty of care then they can put pressure on central government which caused the problem. The government with then have to come up with a solution. For Housing Associations to subsidise the tax payer is not a sustainable financial model.

            • John.
              Yeah, yeah, yeah, but the housing associations are issuing possession proceedings before there are any arrears and without knowing whether there will be any, and in some cases many months before the changes will impact. Nobody is saying that housing associations would have to foot the bill for any shortfall in rent if and when it occurs. However, pre-emptive proceedings in an attempt to short circuit the very limited security of tenure for the tenant, and removing any warning time for the local authority in terms of finding alternative housing, is simply behaving badly.

  3. Both letters are indicative of pre-emptive possession proceedings by Registered Providers – will the HCA see this behaviour as amounting to ‘serious detriment’ and take pre-emptive regulatory action as they would should any Registered Provider was facing bankruptcy?

    Will the Tenant Scrutiny Panels of such landlords have anything public to say about such pre-emptive possession action?

    Will the local authorities affected re-visit these so-called partnerships and call to account any Registered Provider that is threatening repeat homelessness and thereby probably flying in the face of any Homelessness Prevention Strategy?

    Will any tenants affected start official complaints against their immediate landlord Registered Provider with a view to maybe going to the Housing Ombudsman eventually? And what is the public view of the Housing Ombudsman on this story?

    Shouldn’t all those affected be making appointments today (love the timing it’s Friday before a long bank holiday weekend!) with the council’s housing options team and take these letters (and any real s.21 notice served) with them and asking what they should do?

    I reckon there is a great TV documentary here – sort of Cathy Come Home (47 years later) 2013 – which channel will bite?

  4. very interetsing blog article. I’m not aware of anything similar happening in Scotland at the moment

  5. It’s worth noting that for tenants in temporary accommodation, Genesis state in their resident’s handbook

    “After you sign your tenancy agreement, we will serve you with a
    legal notice. We do this to ensure that we are able to provide vacant
    possession of the property to the owner at the end of your lease.”

    That would seem to imply that they routinely serve S21 notices at the commencement of the tenancy, and so if they do decide to kick out those potentially affected by the benefit cap, this could be happening comparatively quickly..

  6. Plexus, and orchard and shipman have been doing this for a few months as well. They work along with LB Hillingdon.

    Over the past few weeks I have seen a rise in s21’s being served and rent arrears as little at £4x used as a excuse.

    Though think we all saw this coming when the changes to the system were coming.

  7. It does seem appalling. I can’t see that it could be lawful to ‘seek possession’ when the intention is not really to obtain possession – it’s merely to reduce the tenant’s security of tenure below that provided for by statute.

  8. Totally agree with the comments seems a little draconian to me. I have to wonder about the validity of the S21 notices and what has been posted seems to be the norm at the moment especially where HA’s are involved.

  9. This is an (imo unacceptable in these circumstances) tactic I haven’t seen before, even in the PRS:

    “A2 Dominion’s purpose is clear – to be able to obtain vacant possession simply by applying for a warrant of eviction – ahead of anticipated arrears.”

    Essentially it is a voluntarily suspended possession order by manipulation of the S21 procedure.

    It’s worth a note that a possession order is valid for – I think – 6 years, so it ‘s a very long term “risk management Sword of Damocles”.

    The only justifiable use I could see of the procedure is for a T in arrears who brought it up to date at the last minute, but is in the last-last-last chance saloon, analogous to a mortgage arrears situation with a Possession Order suspended by the Judge.

  10. “However, pre-emptive proceedings in an attempt to short circuit the very limited security of tenure for the tenant, and removing any warning time for the local authority in terms of finding alternative housing, is simply behaving badly.”

    Not that I’m defending the actions of the HA’s, but if there were a realistic chance of evicting for non payment of rent, the HA’s might not have felt this step necessary.
    This highlights that Section 8 is unfit for purpose.

    • I don’t see that. The s.21/accelerated process would still be available to them. And remember this isn’t about arrears. It is about an assumption that there will be arrears.

  11. Pingback: Housing Associations Send Pre-emptive S-21s to Tenants on Benefits - Retaliatory Eviction

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  14. [Edited by J - Nope, sorry. What you say may or may not be true, but I have no idea and I'm not risking being sued. Hence deleted]

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