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.
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.