15/12/2019

Private sector discharge and unknown landlords

Teresa Ward v LB Hillingdon. County Court at Central London. HHJ Lamb QC. 11 July 2019 (not reported elsewhere, we’ve seen the judgment.)

The issue in this s.204 Housing Act 1996 appeal was whether the review decision upholding a private rented sector offer (PRSO) was correct that this was a lawful PRSO, and if so, whether it was suitable on affordability grounds.

Ms W and her three children were homeless and Hillingdon accepted the full housing duty. On 16 December 2018, Hillingdon made an offer of a private sector property to Ms W. However, before that offer could be formally made, Hillingdon

needed to seek prior authority at Council member level for

(i) an “incentive payment” to the landlord of £5,000 and,
(ii) payment of the shortfall between housing benefit and the contractual rent for the first year. That application was not made until January 2019 – i.e. an application for payment of £11,795 as an up-front payment to the landlord .

That authority was given on 16 January 2019, and the letting agent accepted the ‘nomination’ on the same day. There was no further formal offer to Ms W.

The tenancy began on 17 January 2019, with a monthly rent of £1,216.28. On 18 January, Hillingdon told Ms w that this offer discharged their duty under s.193(7AA) as it was a PRSO. Ms W sought a review of that decision, and then brought the present appeal.

The grounds of appeal were that:

i) the offer did not meet the requirements of the Homelessness (Suitability of Accommodation) (England) Order 2012/2601, so was not a PRSO

ii) the accommodation was not affordable.

On i) the tenancy agreement for the property stated variously:

“This agreement contains the terms and obligations of the tenancy. It sets out the promises made by the landlord to the tenant and by the tenant to the landlord.”

“The Name and Address of the agent who arranged this tenancy is Orchard & Shipman Homes Ltd.”

“DEFINITIONS Landlord A reference in this agreement to the Landlord includes a reference to the person who is entitled to the immediate reversion to the Tenancy and anyone who becomes entitled by law to receive the rent payable under this Tenancy.

Agent Means Orchard & Shipman Homes Ltd.”

“Name of LANDLORDS Orchard & Shipman Homes Ltd
ADDRESS for Landlord Orchard & Shipman Homes Ltd. Orchard & Shipman House …

The following are SPECIAL or ADDITIONAL CLAUSES …. Orchard & Shipman Homes Ltd is instructed to collect the rent on the landlord’s behalf.

During the hearing of the appeal, a name was put forward for the person who was supposedly the landlord under the tenancy agreement. That name appears nowhere in the tenancy agreement.

Article 3 of the Homelessness (Suitability of Accommodation) (England) Order 2012/2601 provides as follows :

3. Circumstances in which accommodation is not to be regarded as suitable for a person

(1) For the purposes mentioned in paragraph 2, accommodation shall not be regarded as suitable where one or more of the following apply–
(…)
(e) the local housing authority are of the view that the landlord is not a fit and proper person to act in the capacity of landlord, having considered if the person has:
(i) committed any offence involving fraud or other dishonesty, or violence or illegal drugs, or any offence listed in Schedule 3 to the Sexual Offences Act 20032 (offences attracting notification requirements);
(ii) practised unlawful discrimination on grounds of sex, race, age, disability, marriage or civil partnership, pregnancy or maternity, religion or belief, sexual orientation, gender identity or gender reassignment in, or in connection with, the carrying on of any business;
(iii) contravened any provision of the law relating to housing (including landlord or tenant law); or
(iv) acted otherwise than in accordance with any applicable code of practice for the management of a house in multiple occupation, approved under section 233 of the Housing Act 2004;
(…)
(j) the landlord has not provided to the local housing authority a written tenancy agreement, which the landlord proposes to use for the purposes of a private rented sector offer, and which the local housing authority considers to be adequate.
(2) The purposes are—
(a) determining, in accordance with section 193(7F) of the Housing Act 1996, whether a local housing authority may approve a private rented sector offer;

Given that the tenancy agreement did not name the landlord:

I do not see how any local housing authority could consider the Tenancy Agreement here to be adequate, whether for the purpose of informing the Appellant about her rights and obligations or at all. The Respondents were seeking to discharge their statutory obligations by transferring Miss Ward to be housed by a person(s) unknown, whose suitability was not made the subject of any active, express, consideration in the Review decision.

Further, the anonymity of the landlord meant that Hillingdon could not have given any active consideration to whether the landlord had a criminal record. It was wholly inadequate to state, as the review officer did that:

“The agents are well known to the authority, and the authority that the landlord / agents are fit and proper “ (sic)

The appeal was allowed on this ground.

On affordability (effectively obiter), the court was less persuaded. While the rent under the tenancy agreement was some 2 times the LHA rate to which Ms W would be entitled, she had a substantial cash injection from Hillingdon for the first year. While Lord Carnwath at para 34 of his judgment in Samuels v Birmingham City Council (2019) UKSC 28 (our report) had used the word ‘indefinitely’ (actually, he said “affordability has to be judged on the basis that the accommodation is to be available “indefinitely””), this point was not developed in a way that would bind the decision of the county court in this case, as it was also said:

“this is an appeal relating to a particular decision, made more than five years ago, on the information then available to the council, not a general review of the law and policy in this field”

Further Baroness Hale in Aweys (actually Birmingham v Ali and Moran v Manchester (2009) UKHL 36 – our report) at para 47 “contemplated that suitability can be linked to the time that a person is expected to live in particular accommodation.” Here, Ms W could afford the tenancy for a year.

Comment

The finding on the ‘hidden’ landlord for the purpose of a PRSO is welcome, and is surely right in the context of the 2012 suitability regulations. How can the LA possibly be satisfied as to the landlord being a fit and proper person if they have no idea who it is?

The (obiter) findings on affordability, on the other hand, strike me as seriously flawed. Baroness Hale’s comments in Aweys/Ali were in the context of it being ‘reasonable to remain’ for a short period for the homeless at home, not in relation to secure accommodation in discharge of duty. Indeed, Baroness Hale emphasises that being homeless at home is where it is not reasonable to expect the tenant to stay ‘indefinitely’ (para 64-65), meaning that reasonable to remain (or secure accommodation) has to be viewed in terms of being indefinite.

Add to that that Hillingdon would simply and inevitably re-incur the full housing duty if Ms W represented within two years – which given the description of her circumstances would seem inevitable – and there is a real question about whether a time limited subsidy can make a property affordable. But that will have to await another case.

 

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.

5 Comments

  1. Ben Reeve-Lewis

    The fact is (sorry this is a hobby horse of mine) that in so many cases the teams responsible for procuring PRS landlords for discharge of homelessness duty are in such desperate need of them to prove to government that their council is tackling homelessness, that they regularly sign up landlords who their own enforcement teams are prosecuting. Giving extortionate finders fees of several thousand pounds or money to bring properties up to standard to the same landlords who owe thousands in council tax.

    When enforcement officers cotton on to a particular individual and flag up the issues, they are discouraged, as harbingers of inconvenient truths.

    I could give a long list of names…..but of course I wont.

    Makes my blood boil.

    Reply
  2. Paul

    On a tangent… I have often wondered how “incentive payments” are permitted given the tenant fees act. I work for a charity seeking to rehouse clients in private rented accommodation and we are increasingly we are finding no “incentive” – no let. How can this practice be permitted given it is not cited in the TFA as a permitted payment? Also, how would one challenge such a practice? I dont want to turn this into an off topic rant so I’ll just stop there…

    Thanks.

    Reply
    • Giles Peaker

      They aren’t payments by a tenant. And, unless guaranteeing a payment of rent by the tenant, payer is not a relevant person – s.1(9) Tenant Fees Act 2019.

  3. Judy

    Ben: “Giving extortionate finders fees of several thousand pounds or money to bring properties up to standard to the same landlords who owe thousands in council tax.”

    Would the money really be used to bring properties up to standard? (They should be up to standard in the first place!) Or would it just go in the LL’s pocket? I speak as a (good) landlord with good quality property, being demonised by govt et al (my hobby horse!).

    Large sums inappropriately thrown at landlords who are not complying makes the Council complicit with and encouraging of poor landlord behaviour. If they are desperate to get the accommodation, surely they could at least set it off the against the Council tax owed?

    Maybe not, not so lucrative and if the landlords would refuse to house the Council’s nominees – per Paul’s comment – no incentive, no let…. What a sorry state of affairs.

    Reply
  4. Ben Reeve-Lewis

    And I agree with everything you say Judy. Entirely my point. So often procurement teams simply dont want to know. I was involved in whistle blowing on a landlord who had been prosecuted twice for demanding money with menaces from his tenants, who was (and maybe still is) providing temporary accommodation for vulnerable people. When a busy homelessness unit, in London regularly seeing upwards of 5,000 people a year the demand for discharge accommodation is beyond a joke, even more so since the commencement of the Homelessness Reduction Act. I understand the pressure all too well but like you I dont agree that basic standards should be dropped but the real problem underlying this is too many homelessness applicants and nowhere to place them that is affordable in London.

    Reply

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