This is a fascinating judicial review case. While the specific facts might only apply to a very few people, there is an interesting principle in it which may have wider application.
R (OAO Yekini) v LB Southwark  EWHC 2096 (Admin) [Not on Bailii yet. I’ve got a transcript]
Just to set the scene, Ms Yekini was a Zambrano carer (meaning no immigration leave to remain of her own, but as the carer for a British citizen child , see here). Ms Y had applied to Southwark as homeless in February 2012 and Southwark had accepted that she was eligible and owed the housing duty. She was placed in a hostel.
In November 2012, the new relations concerning Zamrano carers were introduced (see here) which excluded Zambrano carers from benefits or housing assistance.
In April 2013, Ms Y’s hostel placed was terminated by Southwark for rent arrears. (I presume as housing benefit would have been stopped in Nov 2012, when the regulations were introduced, but this is not clear). Ms Y was subsequently, in April 2013, placed in a B&B, but under s.17 Children Act, not as Part VII accommodation.
Southwark took the position that it would and could not provide accommodation under Part VII on the basis of a nil or peppercorn rent or indeed deal with suitability of B7B accommodation. It:
declined to recognise any suitability requirement as might arise under that scheme in relation to B&B accommodation, and in particular the provisions of the Homelessness (Suitability of Accommodation)(England) Order 2003 SI 2003/3326, articles 3 and 4, which include what, on the face of it, is a six-week maximum for B&B accommodation to be regarded as suitable.
Ms Y brought the present judicial review. In the interim, her application for a derivative residence card was declined by the Home Office, apparently on the basis that there was no reason the British Citizen father could not care for the child. That decision is under appeal. In addition:
on 3 March 2014, the claimant moved out of temporary B&B accommodation and into self-contained accommodation in Rochdale with her three children, ages one, four and seven. That was arranged by the defendant social services department by reference to section 17(6) of the 1989 Act. At that stage too, in the light of the defendant local housing authority’s interpretation of the 1996 Act, it was not acknowledged or recognised that any relevant duties as to substance or procedure, including in relation to prescribed approaches to suitability of accommodation, needed to be fulfilled.
At the JR hearing, the issue boiled down, quite simply, to what duties under Part VII might be owed to those caught in such a Zambrano ‘predicament’.
The “predicament”, therefore, for the individual and the relevant local housing authority was that the situation could arise where there was both the right to housing assistance but also any inability to meet the rent in the light of the absence of housing benefit. To complete the predicament, it is also common ground that the mere inability to meet rent, such as might trigger the ability to repossess and evict, would not of itself constitute intentional homelessness so as to bring a 1996 Act duty owed to the relevant individual to an end for the purposes of section 193(6).
Ms Y argued that, in this situation, Southwark could and should provide accommodation under part VII as a nil or peppercorn rent, on a proper interpretation of section 206(2) Housing Act 1996. Further the duty under Part VII was not ended by provision of accommodation for the children under s.17 Children Act
Southwark argued that:
in circumstances where the claimant was unable to meet any rent payments the duties which would otherwise have continued for the purposes of Part VII of the 1996 Act have, for all relevant enforcement purposes, fallen away, the central duty having become unachievable. The defendant’s position is that it has properly been making provision under, and exclusively under, the 1989 Act: Part VII is no longer relevantly in play.
We’ll skip over Southwark’s application to adjourn pending other cases, which was refused.
“(2) A local housing authority may require a person in relation to whom they are discharging such functions—
(a) to pay such reasonable charges as they may determine in respect of accommodation which they secure for his occupation (either by making it available themselves or otherwise), or
(b) to pay such reasonable amount as they may determine in respect of sums payable by them for accommodation made available by another person.”
Southwark’s argument was that this ‘may require’ was identifying permissible routes for the Council – i.e. either (a) or (b), not conferring a discretion to take a different course aside from (a) or (b). In this case (a) was the route taken. But the power to determine a reasonable charge was not a power to make no charge, as ‘zero charge’ was not a charge. Southwark relied section 193 of the Housing and Regeneration Act 2008 conferring a power on the regulator to set a maximum and minimum social housing rents, so a minimum rent would have statutory force overriding any statutory discretion in s.206.
On whether the Council could cease to fulfil its Part VII duties by other means, Southwark argued:
although the starting point is the existence of an acknowledged statutory duty under Part VII of the 1996 Act, and notwithstanding that that statutory duty would not have come to an end in any of the ways described by Parliament in section 193 of that Act, the local authority – submits Mr Broatch – can properly turn to other provision. In the present case the provision which came to be made for the claimant under section 17 of the 1989 Act. That statutory scheme is capable of addressing the Zambrano predicament and has been sensibly identified and deployed in the present case. It allows the family to be catered for by reference to the statutory services provided by the social services department, whether assistance or accommodation, including unconditional as to repayment. That is a solution which does not undermine the need for the local housing authority to balance its books as to its housing stock in the context of its 1996 Act duties.
In short, and via another route (the Homelessness (Suitability of Accommodation) Order 1996 SI 1996/3204) if no affordable property could be secured, and therefore no ‘suitable’ property, the Part VII duty became legally ‘inert’. Affordability should not take not account a power to waive rent, even if such a power existed, which it didn’t.
The High Court was not particularly impressed First a couple of observations:
In a case in which the Zambrano predicament arises – where the individual who is impecunious would need housing benefit but is denied it – the housing duty would become unachievable, through the necessary unsuitability of any accommodation. The observation is this: that comes close in substance to denying the protective consequences of the transitional provisions for which the relevant regulations made provision when excluding for the future Zambrano carers from statutory housing assistance entitlements. In other words, if Mr Broatch is right, the individual protected by the transitional provisions is, for all relevant purposes, likely in effect to be in exactly the same position as a person not protected by such transitional provisions.
And secondly, the Part VII scheme could not be compared to s.17 Children Act. Ms Y had been moved to Rochdale, with no challenge possible, where there was substantial guidance and suitability issues on out of borough accommodation under Part VII for example.
The Court then went on the set out the correct legal analysis
It would be within the power conferred by section 206(2)(a) of the 1996 Act for a defendant housing authority to charge a nil or peppercorn rent. That proposition needs to be qualified. The authority should only adopt that course under that statutory power if it was satisfied that such a course was appropriate, in the exercise of its discretion and judgment in an individual case. It would only be entitled, moreover, in law to adopt that course if and to the extent that doing so was a reasonable exercise of discretion and judgment in a public law sense. A defendant authority may very well decide that it is not an appropriate exercise of its discretion and judgment conferred on it by Parliament, in particular depending on the circumstances, the implications for it and others and the alternatives that are available to it to deal with any case which arises.
And on s.206:
in any event, in my judgment, section 206(2) in its opening words is conferring a discretion when Parliament has provided that the authority “may” require a person in relation to whom they are discharging such functions to pay a charge or to pay an amount under limb (b). I agree with Mr Broatch as to his analysis of section 206(1) that there are three permissible routes. However, in my judgment, there are two material distinctions, on the face of it, between the nature of that provision and subsection (2). The first is that that is a provision which is dealing with prescribed ways for discharging housing functions. Subsection (2) is dealing with the situation where the authority is discharging functions and is making provision as to something which an authority may, and in my judgment or may not, then choose to do. But the second point of distinction is that Parliament spelt out by the use of the word “only” what the nature of section 206(1) was. By saying an authority may discharge their functions only in the following ways, Parliament was clearly making a provision which identified three alternatives and no other.
On the regulator and a possible statutory minimum rent, no such minimum rent had been set. If one was to be, that
would need to be dealt with as to its implications in those circumstances. What it does not, in my judgment, constitute is a factor which assists me in construing the discretion for which Parliament has made provision in section 206.
Further, in R (on the application of Best) v Oxford City Council  EWHC 608 (Admin) [our note] , which was a case on whether it was unreasonable of a council to decline to impose no charge, the court had expressly stated:
“[Counsel] stresses, and I accept, that the Council are not obliged to require an applicant to pay for the accommodation that it provides. They have a discretion to require Ms Best to pay reasonable charges in respect of the accommodation. However, in practice the discretion is usually exercised in favour of charging a reasonable market rent by reference to similar accommodation in that locality.”
And also in Best
“The housing authority should never charge rent at a level that they know that the applicant is unable to afford to pay: but if the applicant could obtain a benefit that would enable him to pay that rent and fails to obtain it through his own fault, the housing authority may be entitled to reach the view that he has made himself intentionally homeless if he is evicted for non-payment of the rent. Much will depend on the facts and circumstances of each particular case.”
These were not obiter comments, as Southwark had argued.
In relation to affordability and suitability, there were three options:
The first option is the discretion which I have described, as to a nil or nominal rent or charge for the purposes of section 206(2). The second is that the housing assistance secured for the purposes of the 1996 Act could continue to be housing provided by the local housing authority, but with the relevant rental met by assistance in cash made available by social services in the context of a 1989 Act section 17 assessment. In those circumstances, were that the approach taken, the rent would continue to be charged, the means would be made available for the protection of the children, and the local authority would in that sense be able to balance its books. That could have clear implications for questions as to eviction. The third option is that the 1989 Act duty, being a duty not to house but to secure that accommodation is available, could be discharged through securing and being satisfied that provision is being made available through accommodation under section 17(6) of the 1989 Act.
The part VII duty could not simply not be ‘ended’ in some manner by an individual becoming impecunious and so not able to afford the rent the Authority demanded for Part VII accommodation. A s.193 duty could not be ended otherwise than through ‘any of the following provisions of this section ‘.
The remedy granted was a declaration
It is declared that:
(i) Section 206(2)(a) of the Housing Act 1996 does not preclude the local housing authority from deciding, in the exercise of its discretion and judgment, not to require the payment of a charge or only to require the payment of a nominal charge by the person in relation to whom they are discharging their Part VII housing functions.
(ii) A local housing authority may perform a duty arising under section 193(2) of the 1996 Act, inter alia by securing accommodation (or payment) provided in the exercise of an authority’s power under section 17(6) of the Children Act 1989, but in doing so must comply and continue to comply with the duties and requirements in and under Part VII of the 1996 Act.
While the immediate situation of this case is that of a Zambrano carer, caught between pre Nov 2012 housing eligibility and post Nov 2012 non-eligibility for benefits, so with no access to funds, the interpretation of s.206 obviously has potential wider applicability. It arguably means that ‘affordability’ is not simply a matter of the rent a council would like to charge for temporary accommodation under s.193, but of how much the council reasonably should charge in the circumstances. There is a discretion, indeed a discretion to charge no rent at all.
While the rent might, for example, be met under s.17 Children Act, it is, it would seem, not a basis for the Council to argue that its Part VII duty has somehow ceased, let alone discharge duty, on the grounds that the homeless person could not afford a rent that the Council had set and demanded, at least without the council considering, seriously, the exercise of its discretion.
The immediate example that springs to mind are those who have been benefit capped, and cannot afford the rent on temporary accommodation. DHP may be available, but there is also surely an arguable case for the exercise of a discretion on rent demanded under s.206.