No minor matter

The Law of Property Act 1925 prohibits an infant from holding a legal estate in land, and the Trusts of Land and Appointment of Trustees Act 1996 ('TOLATA') provides that an attempt to grant a legal estate to a minor or minors shall not be effective to pass the legal estate but, instead, shall operate as a declaration that the legal estate is held on trust for the minor. However, the statutory scheme does not provide how a landlord can evict a child to whom he has granted a tenancy.

The issue has become significant since the Homelessness (Priority Need for Accommodation) (England) Order 2002 (SI 2051), which conferred priority need status on the overwhelming majority of children aged 16 or 17 years old, who were eligible for assistance from the housing authority. Accordingly, an increasing number of tenancies, many non-secure, have been granted to minors since 2002, in particular by public sector landlords. Such tenants are often unable to manage their tenancy, accruing rent arrears or engaging in anti-social behaviour, and in such cases the landlord will often seek possession.

In Alexander-David v Hammersmith & Fulham LBC [2009] EWCA Civ 259 the form of agreement used by the council was that used for all non-secure tenants. Possession was sought and the tenant argued that the effect of TOLATA was that the local authority held the tenancy on trust for her. Accordingly, she argued that service of a notice to quit, which if valid would have the effect of destroying the subject matter of the trust, constituted breach of trust. She also argued that service of the notice to quit, on the tenant, at the premises, was insufficient as the local authority held the legal interest, which had not been determined. The Court of Appeal accepted these arguments, allowing her appeal.

Avoiding trust difficulties

The wise landlord can avoid the difficulties arising out of a trust altogether. The most straightforward is by reaching an agreement to grant a lease, until the child attains majority. Alternatively, a licence could be granted rather than a lease, providing it is not a tenancy in all but name, in which case TOLATA would apply under Street v Mountford [1985] AC 809.

One method of preventing an essential element of the tenancy, namely exclusive possession, is the provision of appropriate services, including provision for entry to the premises, by the local authority. This additional support would certainly be of benefit to minors but financial obstacles are likely to deter landlords from following this route. Further, this is somewhat outside usual housing management functions and it would be unlikely to fall within the functions of social services, because the main group of 16 and 17 year olds who are not accommodated, pursuant to the homelessness provisions, are those who are accommodated by social services, pursuant to s20 Children Act 1989, see SI 2051 of 2002, above.

Further, the difficulties with the trust position only arise if the landlord is the trustee. Another way of avoiding difficulties should eviction be necessary is by ensuring that a trustee other than the landlord is appointed at the time the tenancy is granted. This could be a parent or relative, or if no such person is available, as may well be the situation for many children accommodated under the homelessness legislation, a youth worker or the Public Trustee.

Preventing problems

Accordingly, simple precautions prior to the commencement of the tenancy can prevent substantial problems should eviction be necessary. It should be noted that the problems associated with evicting a minor are of finite duration; on attaining his majority the trust will cease and whether or not the landlord was trustee he will be able to serve a notice to quit.

In those cases where the landlord does hold the tenancy on trust for the minor the greatest problems are likely to occur in cases where the child tenant is some way from his 18th birthday, yet there are pressing reasons why the landlord wishes to attain possession, as a matter of urgency. Serious anti-social behaviour is likely to be the most obvious example. In such cases the landlord will be able to ensure service of the notice to quit is on both the tenant and trustee, avoiding one of the pitfalls in Alexander-David.

More difficulties could arise in relation to the other basis upon which the tenant succeeded in Alexander-David. Service of a notice to quit constitutes a breach of trust and so the notice will be insufficient to determine the tenancy for so long as the landlord is trustee.

It is, of course open to a trustee to make an application to the court to replace himself as trustee. What is unclear is whether it is open to the trustee to make such application, in order that he may then serve a notice to quit, or whether that act could arguably constitute a breach of trust. Further, it is possible that such an application could be defended, taking further time. These issues have not yet been considered by the courts, in the light of recent developments, but it is likely that a decision will be required in due course. It is this issue which is likely to determine the full impact of the decision in Alexander-David.