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A housing uncooperative?


The case of Mexfield Housing Co-Operative v Berrisford [2009] EWHC 2392 (Ch) illustrates the potentially precarious situation in which the tenant of a fully-mutual Housing Co-operative may find themselves.

The facts are simple. Miss Berrisford had been a tenant of Mexfield since 1993,  she had difficulty with her rent so that she fell into arrears (at the first hearing of the claim they were approximately £1,000). The judge accepted that the arrears had arisen through no fault of her own but were due to a “mix-up” in housing benefit. Whether due to the arrears or for some other reason (the judgment does not tell us) a notice to quit was served on her that would end her tenancy on 17th March 2008.

The Circuit Judge had dismissed the landlord’s application for summary judgment. It is not entirely clear what arguments arose in the County Court, but it appears that the arrears of rent were one matter that was in issue. Peter Smith J summarised as follows:

“The learned Judge below primarily decided the issue against the Appellant on the basis that they had waived the contractual obligation for an advance payment of rent. He rejected the Appellant’s submission based on Prudential Assurance v The London Residual Body H.L. [1992] 2 AC 386 that the tenancy was a periodic tenancy terminable on that basis and that any provision which purported to vary that would mean that the lease was of an uncertain duration and would therefore be void.”

It is not entirely clear what else was said in the County Court, but clearly the issue of rent was a red herring. This is because tenancies granted by fully mutual housing associations are excluded from being assured tenancies by paragraph 12(h) of Schedule 1 to the Housing Act 1988. Thus whether or not a tenant is in arrears, a notice to quit would normally be good to end a tenancy.

Miss Berrisford would appear to have no hope, and that was the view taken by Peter Smith J who granted summary judgment. Unless there is more to this than meets the eye (as there so often is) it seems rather tough on Miss Berrisford who had been a tenant for 15 years and whose arrears were not her fault (and were entirely paid off by the time of the appeal), but is it the right conclusion?

The idea behind excluding fully mutual housing associations from the protection of the assured tenancy regime must be that they will be regulated by (at the relevant time) the Housing Corporation and will be run by their tenants and so, one would hope, have a more tenant friendly attitude than a private landlord. I wonder whether a Weaver style argument could be deployed in defence of a case like this.

As those familiar with housing co-operatives will know they are extremely varied. Some have no regular injections of public money and select their tenants from applications made direct to the association, others have large annual grants and all tenants nominated by the local housing authority. It seems to me that somewhere on that scale a fully mutual housing association will become a public body so that public law arguments may be deployed in defence of a possession claim.

Something like this may have been attempted in Miss Berrisford’s case because it appears that an article 8 argument had at least been pleaded in the County Court where she was represented by counsel. In the High Court she was unrepresented and, I suspect, would have found a Weaver argument hard to deploy.

When Miss Berrisford became a tenant, the statutory guidance given by the Housing Corporation to tenants was contained in the “Tenant’s Guarantee: Guidance on the Management of Housing Accommodation by Registered Housing Associations which are Fully Mutual Co-operatives”.  Clause C4.1 of which states:

Housing co-operatives should offer their tenants contractual rights in their tenancy agreements which are at least equivalent to the statutory protection given by the relevant provisions of the Housing Act 1988 to assured tenants….

I think there must be at least an argument that in failing to comply with that obligation Mexfield were acting unlawfully (if they were a public body) and thus at least some protection for tenants in Miss Berrisford’s position.

What do readers think? Is there more relevant and recent guidance on the topic?


  1. Andrew Turner, Rickerbys LLP

    As the solicitor instructed in this case, I must correct the suggestion made in your article that Mexfield Housing Co-Operative is or should be treated as a “public body”.

    Mexfield Housing Co-Operative, together with its partner Associations, Westgate Housing Association and Westgate (2) Housing Association, are not Registered Social Landlords. They are private organisations which receive no public funding or support and are entirely self-sufficient.

    Accordingly, they are dependant upon tenants paying their rent to survive and to be able to meet their obligations to the tenants. Where one tenant defaults, this has a financial impact not only for the Associations but also for the Associations’ other tenants.

    Public law arguments are not therefore applicable and this was clearly acknowledged by the parties and by the Court in this case.

    • Francis Davey

      Thank you – as you will have gathered from my post most co-ops are registered social landlords and do (or have) received some public funding. The second part of my post was more of a question than a suggestion – the judgment is rather bare and does not explain what arguments were run at first instance or (more usefully) what defences were pleaded.

      If Mexfield is not an RSL then it would seem unlikely that it would be a public body. I am grateful for the clarification, it is always helpful to hear from representatives of the parties if we get things wrong.

    • p lonker

      This reply is somewhat disingenuous. Miss Berrisford had not defaulted her housing benefits had been delayed and they were paid before the case arrived at CC.
      The Management Committee of Mexfield Co-op have wasted a huge amount of social housing funds on legal fees and that has had a far greater financial impact not only on the Associations but also the associations’ other tenants.
      That the matter is to be considered by the SP suggests the idea that Co-ops can be trusted self regulate needs to be reconsidered particularly in light of the abolition of the TSA.

  2. David Thomas

    It is always difficult to defend when your client is the tenant of a fully mutual co-op. I have used two approaches successfully. The first is the tenancy agreement itself. Francis Davey assumes that there was no protection to be found there, but its terms are not mentioned in the judgment; in my experience those terms generally do comply with the guidance he cites, and say that a notice to quit will not be issued unless such and such breaches have occurred. If so, I think the proper defence is to apply to stay the proceedings as being issued in breach of contract.

    The second is very sneaky. If it is a fully mutual co-op, your client will have the minutes of the co-op meetings. Have the proceedings been properly authorised within its rules etc? If not, they have been issued in breach of the (probably innocent) solicitor’s warranty of authority, and an application on that basis will result in the proceedings being struck out and the solicitors being required to pay everyone’s costs.

    • Francis Davey

      I don’t quite assume that there was no protection to be found in the agreement. My assumption was that counsel at first instance would have run any argument on those lines and appears not to have done so (though who knows?).

      I always tell clients (in any landlord and tenant dispute) that the first place they should look is at any written tenancy agreement. Its amazing how many people don’t start there and get into muddles later on.

      As you say, a fully mutual housing association ought normally to give some protection to its tenants via the tenancy agreement – but I have seen quite a few that do not.

      If the tenancy agreement has unmet conditions precedent before possession proceedings may be brought then you might be able to defend on the ground that there is no right to possession, though it will depend on the precise wording.

      An ultra vires argument is also a useful (and potentially powerful) one in some circumstances as you say.

  3. Ahmad B

    I would agree fully with the second point made by Mr Thomas and possibly go a little further. It is likely that as a member of the Co-op, Miss Berrisfords ‘membership’ of that organisation probably needed to be determined before any possession action commenced, it is unlikely that those steps would have been taken at a co-op meeting prior to the action. That failure might render the possession action by the co-op ultra vires?

  4. Cameron B

    Love the concept of a “Notice to Quite”

    Apologies for the pedantry.

    • Francis Davey

      No, its entirely welcome. I am severely dyslexic and although I try very hard, something does slip through the net occasionally. I am in fact very fortunate that my misspellings are almost entirely into fictitious words so they are picked up by spell-checkers. Not so “quite”.

      A notice to quiet might be a useful thing now and then, but I’m not clear what a notice to quite would do.

  5. Michael Hall

    I see that the Mexfield Housing Co-operative was founded by a Bank as part of a mortgage rescue scheme and that it buys individual mortgaged properties from borrowers who are in difficulty and lets them back to them. It seems a laudable and even charitable objective. If such a scheme is to operate effectively for the benefit of members, the members need to participate and treat each other fairly.
    The notes to its accounts state that “the day to day management control of the Association is by Westgate Property Management Company Limited in accordance with a contract with Brelade Estates Limited, the operators of the mortgage rescue scheme”.
    Surely the principle behind a fully mutual housing association is that it is run by the members for the benefit of the members. The mortgage rescue scheme should therefore be run by the members, not by a separate commercial company for profit. One cannot criticise a commercial company for making a profit, but the question arises whether the statutory exception is justified.
    The Housing Act 1988 excludes tenancies where the landlord is a fully mutual housing association from the assured tenancy regime because it is assumed that the members will ensure that fellow members are treated fairly. The administration expenses shown in the accounts seem quite high. I wonder whether the members of the association in practice take part in decisions as to who provides their association with management services and what the management company is paid for these services, and whether they are consulted by the management before a member’s tenancy is terminated. Of course in any event, a tenant would only be likely normally only to have an assured shorthold tenancy which provides little security.

  6. Alan Thompson

    As I am not a legal professional (though I am a housing professional and have worked in strategic roles for HA’s, LA’s, secondary co-op’s for 9 years and have lived in a 150 dwelling co-op for 12 years including 3 years as chair) I am not entirely sure where I stand in with regards to my current status of tolerated trespasser and the fact that as others above recognise, I seem to have less rights then my fellow social housing residents in HA’s and LA’s. As I am this strange breed of Fully Mutual Tenant that does not seem to fit into the types of tenancy agreements as mentioned in the Housing Regeneration Act 2008. Where most tenancy types are now only ended by a Possession Order via court. Whereas I can have mine ended by a mere NTQ.

    I especially find the last comment interesting, mentioning that the reason I am excluded from the 1988 act is that it is implied by being a member of a co-operative, such other members or officers I would think from secondary co-ops who might manage a co-op should be expected to treat members fairly, I should have the same kind of rights of an assured shorthold tenancy in that sense?
    However, now that other tenancy agreements have moved on and afforded other residents more rights. Most co-ops and especially mine seem to rely on loopholes and/or lack of mention of fully mutual tenancy agreements to simply treat co-op residents as no longer tenants and more importantly for co-ops no longer a member.
    So not that we are treated equally, but simply that we are not in the acts/paperwork affording others correct rights and so can be treated much worse.

    Does anyone have any comments on this unfairness that the H&R act only seems to have extended the gap between co-ops and HA’s and LA’s, which I don’t really think this was intended?

    • NL

      Alan, you are not a tolerated trespasser, just to be clear.

      And if a co-op isn’t fully mutual, then it doesn’t fall under the exclusion from HA 1988.

      But yes, it is possible for co-op tenants to be treated worse than assured or secure tenants. I’m not sure that the H&RA has extended the gap – it hasn’t changed the way in which assured or secured tenancies are ended, just made clear that they only end on execution of the warrant.

      (It is perhaps worth noting that a formerly assured or secure tenancy is also ended by NTQ if the ‘tenant’ has acted in such a way as to be incompatible with secure/assured status (sub-let of whole, for instance)).

      I would tend to agree that the presumption that co-ops will behave better towards their tenants perhaps relies on a misplaced confidence.

  7. Greg Robbins

    First NL, thanks for a very helpful site which I have read with interest for some time.

    Some background might help people’s knowledge of the is area. First, the majority of Co-ops today are probably TMOs in terms of numbers of tenants, with sizes varying from a dozen to several thousand. These manage local authority or RSL (correctly ‘registered provider’ now) stock and and are usually nothing to do with the TSA. Whether they are public bodies is still an open question, although some seem happy to concede the point.
    Of fully mutual co-ops, which may or not be ownership, with some overlap to the TMO sector, less than half are registered with the TSA.

    I’m not suggesting that you draw too general conclusions from what is largely anecdotal information, but Co-ops have largely been bound by what they have been able to enforce in any case. While some local courts have stated that a NTQ is sufficient to determine a tenancy, more often they have insisted on evidence of all the normal niceties of support with rent, supportive behaviour as well as the service of a NTQ, which if not for breach of tenancy, would follow a special general meeting to end a member’s membership. Courts have then been very willing to give suspended possession orders.. Co-ops to be sure of success have had to follow a belt-and-braces approach, rather than have a short cut to possession.

    I have no detailed knowledge of Mexfield Co-op, though undoubtedly will soon be finding out more. There is no reason to believe it has received significant public money and so it will have spent its own funds, not money aimed at social housing. If a company has used a cooperative model to circumvent any legislation, then it has also given the power to its members to take control and the Co-op movement would encourage them to do this, if necessary. If they choose not to do so, then that is their choice.

    As to the question of tenure, there has been campaigning on this point for many years by some in the co-op movement and this is once again on the table with attempts to table a motion on a form of cooperative tenure.

    • NL

      Greg, I don’t think that a TMO managing LA or RSL stock is or can be a fully mutual Co-op. You are perhaps rather confusing issues.

      While some local courts may have insisted on seeing evidence of ‘supportive behaviour’, they cannot properly insist on it. And – if it is a fully mutual Co-op – the Court has no power to make an SPO. That some courts’s may have done so, and some Co-ops not challenged this, is neither here nor there, I’m afraid.

      • Greg Robbins

        There are a number of TMOs set up in the late 1970s that were all fully mutual. For newer TMOs it depends on size, with larger organisations tending to be non-fully mutual I&Ps or companies limited by guarantees (or one or two other less common models). It is entirely possible and quite common for a TMO to be fully mutual, however.

        On what the courts have power to do, however, I was merely trying to point out the reality on the ground, that courts have certain expectations and do not seek to throw out families wherever possible. Generally the ability to get a court order to aid enforcement is another tool which co-ops welcome, rather than seeing it as an obstacle to circumvent.

        Whether this is legally correct is another point entirely, but probably mute as none of the Co-ops I know are likely to appeal or seek judicial review of such decisions.

        To paraphrase somebody,
        ‘Don’t tell me the law, tell me the judge.’

        • NL

          Greg – you were talking about TMOs managing LA or RSL stock,. Those can’t be fully mutual or Industrial and provident. As you were running those together with fully mutual co-ops, this may be why you were saying that the courts were making SPOs.

        • Greg Robbins

          Sorry to correct you here, but I&P organisations are listed as organisations which can manage LA stock. Until the act was amended to include companies limited by guarantee etc, it was a requirement under the RTM regulations. The agreements need to be approved by the SoS which, except for one aberrant LA which need not be mentioned, they have been.

          I work with a number of Co-ops in London and sit on London-wide and national groups and so also have access to information relating to hundreds of such organisations.
          Some of these (that I work with) are fully mutual Co-ops who have purchased their own property, others are TMOs, for which fully mutual I&P constitutions were long the preferred model.
          Regarding the SPOs, I was referring to an ownership co-op. TMO tenants have secure tenancies or assured tenancies depending on whether the ultimate landlord is the LA or an RSL (excepting pre-1988 exceptions).

          Even within the co-op movement there was for many years confusion about linking being ‘fully mutual’ with a co-op owning the property. Being fully mutual refers to the form of legal organisation, ownership/management refers to the relationship to property.

        • NL

          Yes, but not managing LA stock as fully mutual housing co-ops, which was the point.

          I’m surprised that any court has handed down SPOs on a fully mutual co-op NTQ and possession claim. I would be even more surprised if there were people out there relying on the court doing so, as there is no power for the Court to make an SPO.

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