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By S
28/03/2012

More than a minor problem

We have news of a recent, and rather important, county court case concerning the termination of a tenancy which had been purported to have been granted to a minor, but who had since turned 18. The case in question is Croydon LBC v Tando.

You may recall that in Alexander-David v Hammersmith & Fulham LBC [2009] EWCA Civ 259 the Court of Appeal held that a landlord is unable to determine a tenancy held by a minor, because, by way of Sch.1, para.1, Trusts of Land and Appointment of Trustees Act 1996 (“TLATA”), the landlord holds the tenancy on the trust for the minor (the minor not being able to hold an estate in land by way of  s.1(6), Law of Property Act 1925) and the landlord is therefore unable to serve  a notice to quit to determine the tenancy as that would amount to a breach of trust.

In Alexander-David the tenant was still a minor at the time the landlord served the notice to quit and so the Court of Appeal did not address the question of what the status of the trust was after the tenant turned 18. Indeed, it has been presumed (perhaps even hoped) by some local authorities that the trust simply came to an end automatically upon the occupier turning 18.

Facts

Croydon LBC brought a claim for possession against Ms Rozita Tando. On 11 April 2011, Croydon had granted Ms Tando a weekly periodic tenancy in respect of a property after they had decided that they owed her a duty under Part VII, Housing Act 1996. Three weeks later Ms Tando became an adult. On 20 May 2011, Croydon served a notice to quit on Ms Tando on the basis that Ms Tando was not occupying the property as her only or principal home, which was a requirement of her tenancy agreement.

Ms Tando sought to defend the claim on four grounds: (1) Croydon held the property on trust for Ms Tando and were therefore incapable of serving a notice to quit to determine the tenancy while the trust subsisted, (2) the tenancy was secure and could not be determined by the service of a notice to quit, (3) the decision to seek possession was one that no reasonable authority would take and, (4) Ms Tando’s eviction would be a disproportionate interference with her Article 8 rights.

HHJ Ellis, hearing the claim, accepted that if Ms Tando’s was successful on her first point the claim must be dismissed and so treated it as a preliminary issue.

Croydon argued, contrary to what had been held in Alexander-David, that Ms Tando held the tenancy in equity or, alternatively, that the trust came to an end automatically when she became an adult.

Decision

The claim for possession was dismissed. Ms Tando did not hold the tenancy in equity; this point had been resolved in Alexander-David; she was the beneficiary of a trust of land. Schedule 1, para.1, TLATA, does not specify that the trust of land comes to an end when the minor became an adult. The trust therefore continued until it was either brought to an end by Ms Tando or Croydon. It had been open to Croydon to apply to the court to bring the trust to an end but they had failed to do so. It followed that the trust continued and Croydon’s decision to serve a notice to quit was a breach of trust and did not therefore operate to determine the tenancy.

The court was reminded of the fact that Croydon could have escaped these problems had they followed the guidance of the Court of Appeal in Alexander-David (i.e. they should have granted Ms Tando a licence rather than purported to grant a tenancy or they should, having done what they did, applied to the court to be removed as trustee).

Permission to appeal was refused. However, at Croydon’s behest, HHJ Ellis ordered that the trust be terminated so that Ms Tando became the tenant of the property.

Comment

If Alexander-David (and indeed the excellent article by Emily Orme from as far back as 2005 – see (2005) 155 NLJ 1522—1523) was not warning enough, this case should finally ram home the message to authorities that they can’t discharge their Part VII functions by granting tenancies to minors. Yes 16-17 years old are owed a priority need (if they aren’t owed a duty by social services under s.20, Children Act 1989) and yes that means accommodation will need to be found. However, there are other ways of providing accommodation and the Housing Act 1996 does not require a tenancy to be granted.

However, even if a tenancy is granted (so that in actual fact a trust is created) before seeking a claim for possession the authority must either end the trust (if the occupier has turned 18) or apply to cease to be a trustee (if the occupier remains 18). As this case shows, this isn’t a terribly difficult application to make.

Hat tip, and congratulations, to Richard Fielding and Alexa Mills of Streeter Marshall for alerting us to this case and David Cowan for successfully arguing this point before HHJ Ellis. We will wait to see if this goes any further.

S is a barrister, based in London, who practices predominantly in housing and local government law.

12 Comments

  1. Chris Lowry

    But…how can a Council (or any other landlord for that metter) ever grant a licence of a property for which all the tests in Street V. Mountford are made out? I guess that the answer is that any smart Council will place the minor in a hostel with services provided. bet they all don’t though!

    Reply
    • S

      Well that is the point. Social services manage to do it so it would probably requires a degree of co-operation with them.

      Reply
      • Chris Lowry

        In my experience, Social Services usually refuse to be a trustee for the tenancy (without knowing that they are already once tenancy is provided).

        Reply
  2. Cait

    If the LA (or indeed someone else) held it on trust – what DOES happen when the trust is ended?

    I know absolutely nothing about trusts law – so am sat here thinking worriedly … that a load of councils in London will try to terminate the occupation of people when they become 18 ….

    (I’d like to think I’m being over pessimistic – but then Croydon clearly thought it was fine to evict someone for not moving into a property due to ONE WEEKS delay of moving in – the mind boggles)

    Reply
    • S

      When the trust ends the beneficiary takes the trust property (i.e. in this case the tenancy). All it means is that the occupier become the tenant of the property and so the authority can determine it by notice to quit.

      Reply
      • Chris Lowry

        Don’t you mean CANNOT determine it by notice to quit, rather notcie of seeking possession?

        Reply
        • S

          Well if they are a non-secure tenant (as they are likely to be because they will have been placed with accommodation because they are in priority need) then a notice to quit will suffice.

    • E

      Where the trust property ceases to be the subject of the trust, there is no longer any purpose for the trust to exist. Accordingly the trust may terminate for lack of subject. However, following the rule established in Saunders v Vautier (1841) 4 Beav 115, without expressly collapsing or terminating the trust, it would continue until such time as the beneficiary (the tenant) expressly collapsed the trust or the court ordered the trust be collapsed.

      Reply
  3. Chris Lowry

    Well that wouldn’t be a teancy anyway then? the case referred to was where an property had been provided post homelessness so would be a teancy in all other circumstances.

    Reply
    • S

      I’m afraid I don’t follow.

      The landlord grants a tenancy to discharge their duties under Part VII. However, they don’t actually grant it, but instead make a declaration of trust (for the reasons set out in the note). The trust is then ended so the occupier becomes the tenant. However, they are still a non-secure tenant because it is provided pursuant to the landlord’s duties under Part VII and so is excluded from security of tenure. Thus a notice to quit ends the tenancy.

      Reply
  4. Chris Lowry

    Depends whether final discharge under s193 or not- cannot discharge into anything other than a tenancy- s193 defines how LA can discharge its duty- subject to change from next week of course!

    Reply
  5. The.Dark.One

    It is not just discharging duties where this is a problem, it is about the ceasing of the duty as well. If the LA cease the duty by an offer under Part VI (usually into an introductory or Starter Tenancy) then the resulting let for the Council or HA (if via a nomination) becomes a problem.

    It is also a problem whereby a minor is housed by a Council or HA through their normal allocations process (with no homelessness involvement).

    So, when the minor turns 18 – what is the landlord to do?

    Reply

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