On the Naughty Step

Or an RSL behaving badly, again. And this time it’s personal…

21 Press House, Press Road LON/00AE/LSC/2007/0292 [pdf], an LVT decision. The landlord, Stadium Housing Association, were facing an application over hefty service charges made on an shorthold assured tenancy which was Part VII temporary accommodation for Brent Council.

How did Stadium Housing decide to defend the case? By attacking the integrity of the Tribunal. Stadium pointed out that the chair, Nik Nicol, was a member of the Housing Law Practioner’s Association (yes, Hlpa!). Stadium, via their counsel Mr Grundy, alleged that:

the purpose of Hlpa was to promote the interests of tenants […] and it was as plain as a pikestaff that an “ordinary member of the public” would perceive members of Hlpa as biased in favour of tenants.

Nik Nicol pointed out that he was not just a member, but had been on the executive of Hlpa for 9 years and helped to write the constitution. In addition, another member of the sitting Tribunal, Mel Cairns, was also a founder member of Hlpa and is currently on the committee.

Stadium, it was pointed out, had utterly failed to understand the difference between ‘promoting the rights of tenants’ (Hlpa aim) and promoting the interests of tenants. Finding in favour if a tenant without basis in evidence and law would not be promoting the rights of the tenant. In addition Hlpa’s code of conduct commits its members to professional behaviour. There could be little that was more unprofessional than judicial bias, which was what was being suggested.

Hlpa’s stated objectives were notably similar to those of most RSLs and would not look out of place on Stadium’s website, so it would be hard to see how a member of the public could perceive bias.

Mr Grundy’s submissions would mean that no member of Hlpa could ever hold judicial position, simply by that membership and that would make a mockery of the rigorous selection process. There was no bias or appearance of bias.

Just why Stadium might have taken this utterly ridiculous approach is clear in the rest of the Judgment. They were levying a walloping £129.72 per week service charge. However:

  • It was improperly apportioned under the tenancy agreement
  • Services had been changed without notification or consultation
  • Stadium could provide no breakdown of the charge
  • Charges weren’t audited, despite Housing Corp requirements
  • The charge was very high in comparison to others, for no reason, but it was usually paid by Housing Benefit, so nobody cared (except the applicant, who was working).
  • The contract was not individually negotiated so the Unfair Terms in Consumer Contract Regulations were engaged
  • The applicant was being asked to pay a charge for things that “no assured shorthold tenant in the private sector would even think of paying, even if the landlord were minded to try to impose it”.
  • On reasonableness of other charges, there was simply no evidence provided of the actual costs incurred by the respondent. The Tribunal wasn’t prepared to guesstimate on no evidence.

The result, service charges of £42.75 per week payable, a drop of £87 per week. This amount to be retrospective. No subsequent changes to the service charge made by the respondent were valid.

Oh dear, oh dear. Probably best not to impugn the professionalism of the Tribunal when it is your utter lack of professionalism that is about to come to light.

This challenge to service charges for temporary accommodation under Part VII is worth bearing in mind when, for example a client is facing a ‘rent arrears’ possession from temporary accommodation, if a service charge component is levied, at least. Stadium are far from alone in their cack-handed handling of the charge.

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 +.
Posted in Assured Shorthold tenancy, Housing law - All and tagged , , , , .

25 Comments

  1. And congratulations to Brent Law Centre and Stephanie Smith of Arden Chambers who acted pro bono for the applicant.

  2. In my (not inconsiderable) experience of poor management of service charges I have never seen a situation quite as bad as this come to the LVT (though I have heard of one other). The landlords were totally unable to produce documentation to support the majority of the charges they were levying.

    I suspect that even a fairly tenant sceptical LVT (consisting entirely of members of the landlords’ association perhaps) would have thrown its hands up in horror and the result would have been little different.

    The case also emphasises a point that many in the sector miss: the starting point is the written tenancy agreement (if there is one). If it says in the agreement that something must or must not be done, or must or must not be paid, then that really is what ought to be happening. Surprisingly many landlord lawyers don’t appreciate this and much correspondence is generated before the matter is resolved in the LVT (or court).

  3. francis – i can give you a pretty horrendous case from my personal experience, but nearly has been bored by the details before and it really isn’t funny.

    imho, the only good thing about most rsl’s is that their utter inability to do anything right or care about it means they can be fair game before the tribunal for a bunch of tenants who actually organise. (‘qed’, he added smugly)

  4. LVT have done those in TA in London a huge service. It is not usually RSLs on the naughty step Some Councils will “charge” £1200 pcm for an outer London bedsit.

  5. @ef jarvis: Depends whether it is a) a tenancy and b) rent or rent & service charge that is levied. But there often is a service charge component. And I doubt, from anecdotal experience, that many LAs would be any better at justifying their charges than Stadium. Hmmm.

  6. @ ef jarvis: of course, quite often the LA doesn’t actually own the property that it is using for TA but has merely taken a lease from a private landlord. That lease is usually taken at a very high premium, as landlords know how desperate LAs are for property.

    The private sector – ultimately to blame for everything!

  7. indeed NL – my anecdotal experience is that councils have exactly the same set of issues as HA’s; similar overstretched under-motivated staff; similar inability to manage stock effectively; imho, the problem became worse as the public sector felt itself shoehorned into the private sector and organisations with a whole different setup, approach and purpose were expected to parrot the dogma of profit margins, bottom lines, best value. not that business considerations aren’t important to the social housing sector (i agree that many of their woes are down to the fact that they are inefficient), but merely parroting the rhetoric without understanding the process was never going to make them better property managers.
    some of the extra issues in the (alleged or otherwise) arm’s length relationships have in my direct experience led to a council not remedying disrepair because they claimed they were not allowed to by a head-lease with the arm’s length body that had taken ownership of their stock and politically they couldn’t badger the freeholders to do it.

    directly on point for the service charge, i know one person who has been trapped in the cycle of high service charge due to his rsl (who has sublease) on behalf of freeholder who has performed works badly / not at all; rsl refuses to deal with it as: ‘the service charge is due because we have paid the freeholder on your behalf, and we aren’t the freeholder so it’s not our problem’ and the freeholder responds with ‘your lease is with the housing association – we will not deal with you’. hard to get through for the lay person (and i’m not sure where the lessee’s remedy lies. where does it?)

  8. @simply wondered: tenant’s remedy is against their landlord/lessor, unless the sub-lease makes provision for direct levy of charges by the freeholder. Otherwise, whatever the arrangment in the RSL’s lease with the freefolder, they are the one levying the charge on the tenant. I’ve heard a couple of very similar stories, all very messy.

  9. The rate things are going in the last few months we can have an award ceremony for worst (maybe the ‘best’ stupid) RSL…so thats Stadium, Ujima and Stafford & Rural Homes – any other nominees??

    p.s. For all those who are aspiring to do advocacy in the future, take note that attacking the integrity of the panel in any court is badddd. Unless you are certain of winning that little battle (which you can never be!) don’t do it. Way it go Hodders and Mr Grundy ….

  10. damn – scrub the big finish i had laboriously penned ‘i submit you are a biased old git. and you smell. unless i may assist the court further by purchasing you an effective deodorant, that concludes my submissions.’

    wish to nominate notting hill housing trust for stupidity and sheer inability to care way beyond the call of duty. ‘crasser! crosser! crapper!’ as their pithy new slogan reads. see my forthcoming book ‘being an rsl means never having to say sorry’. actually, that is an idea….

    thanks NL – i had assumed it would be with the other party to the lease, but never quite certain.

  11. @NL @simply there is nothing to stop an the undertenant making a s27A application in respect of the service charges paid by their landlord to their head landlord (and therefore being paid indirectly by them). That might well have the effect of reducing what the landlord pays and therefore their service charge bill. Its not ideal, but it does work.

  12. And the authority for the proposition given by Francis is Oakfen v Ruddy [2006] EWCA Civ 1389, for all you LVT fans out there.

  13. @J Thank you, that is exactly the authority (sub. nom. Oakfern v Ruddy) I had in mind, although informed opinion (well certainly our opinion) was always that that had to be right.

    S.27A is very properly drafted to allow anyone to make an application for the determination of the payability of a service charge. Usually that will only concern landlord and tenant but there are other possibilities, and this is one.

  14. Housing Corporations Funding Guide has given a free hand for RSLs and Local Authorities to charge their assured shorthold tenants regarding rent and service charges Temporary Social Housing-TSH). Capital Funding Guide 2008 issued by the Housing Corporation:
    4.2.1 Housing Corporation rent re-structuring and Rent Influencing regime does not apply to TSH. The rent at letting must be equal to or less than that Bid for.
    4.2.2 The RSL must ensure that:
    · The rent + HBSC charged is within the housing benefit threshold, in their local authority; and
    · The provision of this scheme is cheaper than the cost of bed and breakfast accommodation.
    4.2.3 The RSL must retain documentary evidence that this requirement is met. This can be a letter from the local authority.

    Tenants, who in receipt of state benefits do not have any issues with the above charges, as these will be paid/covered by HB and CTB, except some element of service charges.

    Recent trend in the TSH is, self-contained 1/2/3 bedroom properties are let as B&B (no need for the L/L to issue possession proceedings to evict the tenants). Local authorities are aware of this.

    If the tenant is working and not entitled for full HB/CTB will suffer financially by paying rent including service charges and council tax. Housing Corporation’s Funding Guide did not address this situation. Haringey Council operates Workers Rebate scheme (TSH tenants are required to pay £70 per week as their rent – rest will be covered by HB).

    I recently contacted a local authority in London about my client’s financial inability (FT nurse) lives in TSH. They advised my client to seek review u/s 202. Any suggestions…

  15. Options? Few.

    If it was an existing tenancy, the LVT route as above (but no legal aid available!). It would be a rare LA (and few RSLs) that could withstand a detailed look at the levying of service charges on temp accom Assured shortholds.

    S.202 review? Could well be. ‘Suitability’ includes financial affordability (can’t remember the precedent case off hand – my homeless cases recall is getting a bit rusty – but it exists). So any attempt to give an un-affordable temp accomm is clearly open to review and s.204 appeal on suitability grounds, and potentially, depending on the circumstances, judicial review (for instance on a policy to only offer temp accomm via high rent/service charge Assured shorthold, if that was the reason no alternative was available/offered).

    I’ll have a think and a bit of a look, but is that anything to go on?

  16. On 16th September 2 and a bit weeks after the decision the job of Tenancy Services Manager at Stadium Housing was posted. Other vacancies, according to their website, include that of Director of Housing Services and rather amusingly a Supported Housing Contracts manager who should have ‘extensive experience of contract management and its legal framework and be able to lead on lease negotiations and policy formulation’.

    Can only wonder where the old staff are. Probably got a promotion.

    Looking at the salaries one would have hoped that they would have attracted staff that had the intellect to think that keeping receipts might be a good idea…

    Big cheer for the applicant and the pro bono people involved.

    The most depressing thing is the fact that the service charges would have actively discouraged unemployed tenants from getting a job. Good on the applicant for not giving up!

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  19. [Edited by J. If you’ve got court/LVT judgments to back up any of the allegations you made, then please let us know. Otherwise we have to delete allegations like the ones you made as they may well be defamatory. And we don’t want to get sued.]

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