A pile of case notes that I’ve managed to do in the Betwixtmas/Merrineum, hopefully clearing the decks for the new year.

It includes right to buy and the intention to return, FTT jurisdiction on rent increases, a council’s unlawful interpretation of an allocation scheme, Right to Manage and who counts as the ‘landlord’, a significant High Court reading of the Debt Moratorium Regulations, and an interesting appeal on ‘intention to sell’ as a ground of possession in Scotland.

A very happy new year to all. Let us hope for the best, though not count on it…

The Rabbi who wasn’t there.

London Borough of Hackney v Weintraub (2024) EWCA Civ 1561

We saw this case on the conditions for the right to buy in the High Court. Hackney appealed further to the Court of Appeal. The central issue on appeal was whether the High Court had been right to find that the ‘tenant condition’ was met where the tenant, Rabbi Weintraub, was not occupying the property as his home, but intended to return once the right to buy had been exercised (and he could alter the property to enable someone else to stay with him). Ie, did the ‘intention to return’ have to be to return as a tenant, or not.

The Court of Appeal dismissed the appeal, finding the intention to return did not have to be ‘as a tenant’.

none of the authorities addresses the question of whether the tenant must intend to return as a tenant. They were focussed on whether the secure tenant in each case had lost that status and could be evicted rather than the secure tenant’s ability to exercise the right to buy. It is necessary, therefore, to return to basic principles. As I have already stated, I do not consider that there is anything in section 81 which requires the tenant, in the sense of the individual to whom the contractual tenancy has been granted, to intend to return to a property in the capacity of tenant, or to resume using the property as the principal home in that capacity. I agree with Zacaroli J that it is sufficient that they genuinely believe the dwelling house to be their principal or only home and intend to return to use it as such albeit once their right to buy has been exercised. They fulfil the tenant condition because at the relevant time they are the tenant and continue to occupy the dwelling-house as their only or principal home in the extended sense which has been understood in the case law since Brown v Brash and Ambrose, in 1948, if not before.

Rent increases – on notices and jurisdiction

Moat Homes Ltd v Carlo  (2024) UKUT 415 (LC)

Three joined appeals in the Upper Tribunal from First Tier Tribunal decisions on rent increases. In each case a housing association had served a notice of increase of rent in the form prescribed for a section 13 notice on their assured periodic tenant. In each case, the tenant had applied to the FTT for determination of a new rent. In each case, the landlord had not disputed the FTT’s jurisdiction, and the FTT had proceeded to determine a new rent that was lower than that proposed by the landlord.

The landlords then appealed, noting that each tenancy agreement provided for annual variation of rent by service of notice of new rent, and that this fell outside the Tribunal’s jurisdiction under section 13 Housing Act 1988

The Upper Tribunal upheld the appeals. Section 13(1)(b) provided that s.13 applied to

(b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period.

The tenancy agreements had such a provision. The Upper Tribunal rather tartly observes

At the risk of repetition, but in the hope that the waste of resources which Moat and Longhurst have inflicted on themselves and on the justice system in these cases may be avoided in future, it should be noted that the significant expense and inconvenience of these proceedings to all parties, and the distress which the respondents may have experienced, have been caused in each case by the inappropriate and misleading use of the statutory prescribed form for increasing rent under section 13 of the 1988 Act. Section 13 does not apply and the prescribed form serves no purpose where the tenancy agreement includes a contractual rent review clause. The form is worse than useless, because it creates the false impression, and false hope, that the FTT may be able to determine a different rent, when it cannot. It is in the hands of social housing providers to avoid the waste and confusion which the inappropriate use of the prescribed form provokes.

It looks like this will all be changed under a new procedure for ‘relevant low cost tenancies’ (assured tenancies of social housing with a private registered provider landlord). There will be a new s.13A HA 1988 providing for a mechanism to increase rents and a right for the tenant to challenge that rent in the Tribunal under a new s.14 (A3).

Domestic abuse and Allocation scheme requirements

EM, R (on the application of) v The London Borough of Havering (2024) EWHC 3016

EM lived in a four bed property in LB Islington on a social housing tenancy. She had suffered severe domestic abuse over a lengthy period of time, culminating in the imprisonment of her ex-husband in 2013. He was released in 2015. In addition, her ex-husband had a child with another woman who lived in the area, and there were altercations with the other woman and her family. By 2021, a clinical psychologist had concluded that a move away from the property was necessary for EM to recover further from the effects of the abuse. In addition, EM said that the property was too large, as only hr youngest daughter remained with her, and toon expensive to heat and maintain. EM’s sister, who had been supporting her, lived in LB Havering. From 2020, EM made a number of applications to join LB Havering’s housing register. These were rejected on the basis that she had not lived in Havering for the previous 6 or more years. After the most recent application was rejected, EM brought this judicial review.

She argued that:

i) on a lawful interpretation of Havering’s allocation scheme, she came within exceptions to the 6 year residence requirement; and

ii) if she did not come within the exceptions, the scheme was indirectly discriminatory against her under section 19 Equality Act 2010 and/or Article 14 with Article 8 ECHR.

The High Court held that, on the wording of the scheme, EM fell within exceptions for the residence requirement as follows

“(b) People who are under-occupying their current social housing tenancy”
“(c) People who fall within the reasonable preference groups:
…
People who are homeless (within the meaning of Part 7)” and

“(c)People who fall within the reasonable preference groups:
…
People who need to move on medical or welfare grounds (including any grounds relating to a disability)”

Havering’s argument that the exceptions had to be read together with the priority bands set out elsewhere in the scheme, and that those bands required the 6 years residence was not accepted, as requiring additional words to be read into the exceptions and there was no direct correllation between the listed exceptions and the priority bands.

The question of discrimination therefore did not fall to be considered.

If your name’s not down…

159-167 Prince of Wales Road RTM Company Ltd v Assethold Ltd (2024) EWCA Civ 1544

A short but unusual point on right to manage applications arose in this second appeal. A party to a withdrawn right to manage application was not entitled to their costs under section 88(4) Commonhold and Leasehold Reform Act 2002 as ‘the landlord’ where they were not the registered titleholder at the time of the application. This was in the rather unusual circumstances that Assethold had bought the freehold and head lease of the building, but had not registered these titles for some three years. Equitable title was not enough.

Given that Assethold had held itself out as the landlord to the leaseholders in 2020 service charge demands, the leaseholders had had no option but to include Assethold in the RTM application, so no issue of estoppel arose on the RTM company subsequently denying that Assethold was the landlord for the purposes of costs.

Breathing Space moratoriums and the Court’s jurisdiction

Seculink Ltd v Forbes (2024) EWHC 3339 (Ch)

Not strictly a housing case, though involving possession of properties, but of general importance on the operation of the debt breathing space regulations.

The issue was whether a debt was a  ‘qualifying debt’ under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 could be determined by the Courts, or whether it was solely the province of the ‘Debt Advice Provider’ under the regulations (save for the time limited statutory appeal to court mechanism under Reg 19).

The High Court found that the Regulations did not expressly exclude consideration of whether a debt was a qualifying debt by the Courts other than by the Reg 19 process. And then:

On the wording of Regulation 6 a moratorium debt is subject to the moratorium, and a moratorium has to have 4 qualities, the first of which is that it has to be a qualifying debt. That is a starting point. On to that over-arching qualification there are then imposed three other qualifications (incurred by the debtor, owing at the time of application for the moratorium and about which information has been provided to the Secretary of State). The argument is that if a debt is not a qualifying debt it should never get past the starting gate, as it were, and it never is a qualifying debt whatever a DAP may consider and whatever time periods have elapsed. It remains non-qualifying at all times and can therefore never be the subject of a moratorium. If that is right then it retains that status and a court can determine that point whenever it may arise.

(…)

I consider that Parliament cannot have intended to exclude the jurisdiction of the court to decide legal points about qualifying debts in favour of their being first decided by a non-qualified DAP within Reg 17. A debt is either a qualifying debt or it is not, and if a question arises as to whether it is then I consider that a court can decide it whenever it arises.

Further, simply continuing existing proceedings until judgment was not an ‘enforcement step’ under the terms of Reg 7 and so was not barred without further permission of the court.

A conclusion that Reg 7 does not seem to present a bar on continuing pending proceedings, derived from the terms of Reg 7(7), gains some support from the presence of Reg 10(3) itself. Its effect would seem to be directly contrary to any idea that continuing an action until judgment is an “enforcement step” within Reg 7(7) which requires permission. Rather, Reg 10(3) expresses the contrary – the action may continue until judgment. If Parliament’s intention was that such actions could only proceed with the court’s permission one would have expected Reg 10(3) to be expressed differently, and to refer to the ability to give permission or perpetuate a stay. It is not expressed in that way. Reflecting a requirement of permission would require the addition of only a couple of words.

It therefore seems to me that the Regulations do not impose a general bar on continuing pending actions without the permission of the court.

Really, really meaning to sell

We don’t usually cover Scottish case here, but this excellent note by Malcom Combe on a decision of the Upper Tribunal on a ‘wrongful Termination Order’  application is of particular interest given the forthcoming new ground 1A to schedule 2 Housing Act 1988 in the Renters’ Rights Bill – the landlord ‘intends to sell’ ground.

The Scottish law has a similar ground, since the abolition of their equivalent of section 21. That ground reads

if the landlord (a) is entitled to sell the let property, (b) intends to sell it for market value, or at least put it up for sale, within 3 months of the tenant ceasing to occupy it, and (c) the Tribunal is satisfied that it is reasonable to issue an eviction order on account of those facts.

In this case, the landlord served notice to leave on the tenants on the ground that they intended to sell. The tenants did leave. The landlord did put the property on the market, incurring some expense in doing so, but despite offers being received from potential buyers, none were accepted. The property was withdrawn from the market and the landlord moved into it while they had works done to their own home. The property was then re-let at a higher rent,

The former tenants applied for a ‘wrongful termination order’ (which would entitle them to a penalty of up to 6 months rent), on the basis that the ground had not in fact existed.

The FTT rejected the application on the basis that the wording ‘or at least put it up for sale’ meant on these facts that the landlord’s intention did not fall to be considered. The former tenants appealed.

The Upper Tribunal held that the landlord’s intention was wholly key:

Critically…, whether a landlord has a ground for eviction under paragraph 1 of schedule 3 depends on his intention, per paragraph 1(2)(b), to either sell the property for market value, or at least put it up for sale. But on either limb of this sub-paragraph, the intention to sell must be genuine. If a landlord puts a property on the market, but has no genuine intention of accepting any offers that may be made for it, he is neither intending to sell the property for market value, nor is he putting it up “for sale”. Rather, if he is purporting or pretending to market the property for sale simply in order to remove an unwanted tenant, then in reality he is putting it up for a purpose other than “for sale”. The marketing of the property and the inviting of offers to purchase in such circumstances is a sham, because there is no real intention to accept any offers which may be made, nor to conclude a contract of sale. It therefore does not constitute ‘putting the property up for sale’ for the purpose of ground 1 of schedule 3.

Simply putting the property on the market was not enough to show the requisite intention to sell, unless the intention was to go through with it.

The appeal was allowed and the matter was remitted to the FTT on the issue of whether the former tenants had been caused to leave by the landlord stating that they had this ground of possession, which is relevant to a WTO, but not to any consideration for what will be the case in England.

The new Ground 1A currently reads

the landlord who is seeking possession intends to sell a freehold or leasehold interest in the dwelling-house or to grant a lease of the dwelling-house for a term certain of more than 21 years which is not terminable before the end of that term by notice given by or to the landlord;

I’ve commented before on the question of what evidence of intention to sell would be sufficient to persuade the Court that this ground was made out for a (mandatory) possession order. I still think this is going to be a considerable question in practice. If a landlord simply says, above a statement of truth, that they intend to sell, how is this to be gainsaid? But this UT decision suggests that Courts and Tribunals might be willing to look rather harder at the substance of any stated intention.

This may also be relevant to English FTTs in the future looking at Rent Repayment Order applications where the former landlord has re-let within the prohibited 12 month period. Whether the landlord’s stated intention (and even putting the property on the market) was a sham could well be a factor.