Update: housing law

More tolerated trespass

The thorny issue of whether assured tenants become tolerated trespassers has finally been addressed in the higher courts. In White v Knowlsey Housing Trust [2007] EWCA Civ 404, the applicant was the weekly assured tenant of premises let by the respondent Housing Trust. In 2004, a possession order in the 'old' Form N28 (i.e. 'suspended' on terms), was made against the applicant on the ground of rent arrears. The order provided for possession to be delivered on a given date but that it would not be enforced if the applicant kept to specified terms of payment of rent and a weekly sum towards the arrears. The order was breached, a warrant issued but its execution was subsequently suspended pursuant to a new arrangement on the same terms as had applied to suspension of the order.

In order to facilitate a right to buy application, the applicant sought a declaration that she remained the tenant of the premises notwithstanding breach of the order, contending that an assured tenancy only comes to an end when possession is delivered up. She argued that the position of an assured tenant was the same as that of a Rent Act statutory tenant, whose tenancy did not come to an end on the date specified in an order for possession but on the date when possession was delivered up (Sherrin v Brand [1956] 1 QB 403, CA). She also argued that there is no equivalent provision to s 82(2), Housing Act 1985 (which provides that a secure tenancy ends on the date on which the tenant is required to give up possession in pursuance of a court order) in the 1988 Act.

The Housing Trust responded that the position of an assured tenant was the same as a secure tenant and that the courts were therefore bound by the decision in Harlow DC v Hall [2006] EWCA Civ 156; [2006] 1 WLR 2116 (see Housing Law Update [14/07/06]) and that the effect of an order in Form N28 was to terminate the tenancy on the date given in the order.

The County Court judge dismissed the application and the applicant appealed to the Court of Appeal. The Court of Appeal dismissed the appeal holding that there was no justification for the proposition that an assured tenancy only comes to an end when possession is delivered up. The analogy with Rent Act tenancies and secure tenancies was not sustainable because of the differences in the respective statutory schemes under the Rent Acts and the Housing Acts 1985 and 1988. Nor did the correct approach to determine when an assured tenancy comes to an end depend on the statutory provisions of the 1988 Act, rather it depended on the terms of the order made. It was held that an assured tenancy subject to an order in the terms of the 'old' form N28 came to an end on the date prescribed in it for giving possession. Tenants against whom such orders had been made but who remained in occupation after the date specified became tolerated trespassers. It was, however, open to a court to make a 'postponed' possession order along the lines adopted in Bristol CC v Hassan [2006] EWCA Civ 656; [2006] 1 WLR 2582, which would avoid the tenancy coming to an end.

In London & Quadrant Housing Trust v Ansell [2007] EWCA Civ 326, a suspended possession order was found to be no longer enforceable because its terms as to payment of arrears of rent and costs had been complied with. The court's powers under the Housing Act 1985 s 85(2) were therefore no longer exercisable (see Swindon BC v Aston [2002] EWCA Civ 1850; [2003] H.L.R. 42). It followed that a fresh possession claim against the former secure tenant was a valid and lawful claim. In Ansell, the appellant had sought to argue that she had become a 'perpetual tolerated trespasser' whose occupation could not be brought to an end. Chadwick LJ found himself, 'unable to accept that there is any legislative policy in this field which compels that result'.

Homelessness and allocations

In Elrify v City of Westminster Council [2007] EWCA Civ 332 the appellant lived in a three-bedroom flat with his wife and seven children, aged between five and 18 years old. He applied to the respondent authority as homeless, contending that it was not reasonable for him to continue to occupy the flat as it was overcrowded. As part of its inquiries into the application, the authority visited the flat and measured the size of the rooms. The authority decided that the appellant was not homeless because it was reasonable for him and his family to continue to occupy the flat. The appellant requested a review, relying on the statutory overcrowding criteria in Pt 10, Housing Act 1985. On review, the authority found that the appellant's household consisted of eight and a half persons for the purposes of s 326 of the Act and stated that 'according to the statutory standard there is only one person too many in your home'. The authority upheld its original decision that the appellant was not homeless because, taking into account the housing conditions in the area, it was reasonable to occupy a property with only one more person than the statutory permitted maximum. On appeal the appellant argued that the authority had misapplied the statutory overcrowding test because it had only considered the capacity of the flat by reference to the number of rooms (i.e. by reference to table 1 in s 326) and had not considered its capacity by reference to their size (table 2 in s 326), on which basis the flat was only capable of accommodating five and a half persons. The Court of Appeal allowed the appeal. When determining whether it is reasonable to continue to occupy accommodation for the purposes of Pt 7, 1996 Act, on the basis of overcrowding, an authority are required to have regard to Pt 10, 1985 Act. An authority must take the maximum number of occupants as being the lowest of the two numbers calculated under table 1 and table 2 in s 326, 1985 Act. The authority's erroneous conclusion that the flat was only overcrowded by one person was an important and central part of the decision as to whether it was reasonable to continue to occupy the flat, which decision was accordingly flawed.

In Watchman v Ipswich Borough Council [2007] EWCA Civ 348, it was held that a local authority's reviewing officer had correctly decided that an applicant had made herself intentionally homeless by taking on a mortgage knowing the repayments could not be kept up. He was also entitled to decide that the chain of causation had not been broken by the applicant's husband losing his job after the mortgage was taken out. It was inevitable that the couple would '“ in any event '“ have got into severe financial difficulties. Where there may be multiple causes of homelessness, all the facts had to be looked at. Accordingly, although the reviewing officer was obliged to consider the circumstances as at the date on which the applicant actually left the accommodation, he was entitled to have regard to matters pre-dating that event, including what would have happened if the applicant's husband had not lost his job and their financial position at the date the mortgage was taken out.

Under the Housing Act 1996, s 167(2) authorities are required to give 'reasonable preference' to specified groups, including the homeless, in their allocation schemes. In R (Lin) v Barnet LBC [2007] EWCA Civ 132, the Court of Appeal considered the meaning of 'reasonable preference'. It held that:

• The duty to give a reasonable preference merely required the giving of a reasonable 'head start'. Preference was not to be confused with prospects of success, which would depend on many factors, of which the most material was that the demand for accommodation greatly exceeded the supply. It was quite possible for a lawful scheme to give reasonable preference to a person within s 167(2) and for that person never to be allocated housing;
• It was for the authority to decide what was 'reasonable'; and
• The discretion left to the authority under s 167(6) to decide the principles on which to frame their allocations scheme was wide enough to permit them to take into account factors such as an applicant's financial resources and local connection when considering the priority to be given to applicants who fell outside s 167(2). A scheme might give reasonable preference to applicants who did not fall within s 167(2) provided that such non-statutory preferences did not dominate the scheme at the expense of the statutory preference categories. For this purpose, it was necessary to look at the scheme as a whole and not at an individual case, and consider whether the fact that non-statutory preference categories might in certain circumstances be awarded more points than statutory preference categories meant that the scheme permitted the former to dominate at the expense of the latter.

Although Barnet's allocation scheme met the requirements of s 167(2), it failed to satisfy s 167(1) as regards the description of the procedure to be followed in allocating housing.

Rent increase

In Riverside Housing Association Limited v White & another [2007] UKHL 20 the defendants were assured tenants of the defendant housing association. The tenancy agreement provided that the rent would be increased annually with effect from the first Monday of June each year. In June 2000, the Association did not increase the rent of a group of its tenants which included the defendants. In 2001, the Association decided to introduce increases for this group, from April 2001, but by no more than the amount by which the rent could have been increased in June 2000. Subsequent annual increases were also payable from April in each year, by no more than the amount that rent could have been increased in the previous June. The defendants fell into arrears. They entered into agreements with the housing association to repay the arrears, but did not keep to the terms of those agreements. The housing association sought possession. In their defence to those proceedings, the defendants argued that the arrears were not lawfully due because the rent had been increased otherwise than in accordance with the terms of the tenancy. At the possession hearing, the judge determined as a preliminary issue that time was not of the essence in relation to the rent variation date. The defendants successfully appealed to the Court of Appeal, which held that the tenancy agreement specified that the rent increase must take place on the first Monday of June in each year and that the principle that time was not of the essence could not entitle the housing association to serve a notice seeking to increase the rent on a different and later date.

The House of Lords allowed the appeal. Properly interpreted, the rent review clause allowed the landlord to increase the rent on any date from and including the first Monday in June, subject to giving the tenant the required notice. The House of Lords agreed however with the Court of Appeal as to time being of the essence. If the tenancy agreement had only allowed the rent to be increased on the first Monday in June, the principle that time is not of the essence would not have permitted the Association to increase the rent on a different date. Unfortunately the Lords did not go on to consider the more general defences considered by the Court of Appeal concerning estoppel and waiver (see the article on the Court of Appeal decision by Dominic Preston: 'Upping the rent' (2006) 150 SJ 354 24.03.06).

Security of tenure

In Jana Vesely v David Levy & Ors [2007] EWCA Civ 367 the Court of Appeal upheld the finding of the judge at first instance that an occupier was not an assured tenant. The parties in the case had merely agreed on the sharing of household expenses and had not agreed that the occupier should pay rent in return for her occupation of two rooms. A rent-free arrangement for the exclusive use and occupation of premises would not create a tenancy if the correct inference from the purpose of the arrangement and the surrounding circumstances was that there was no intention to create a landlord and tenant relationship between the parties: Ashburn Anstalt v WJ Arnold & Co (1989) Ch 1 considered. In the present case there was nothing in the arrangement or the circumstances surrounding it to support the contention that the judge had been wrong in rejecting the occupier's claim that she was granted a tenancy.

Right to buy

In a right to buy claim, the valuation report by the district valuer is not conclusive as to the extent of the tenancy, as his function is solely to determine the value of the premises. Further the Housing Act 1985 does not prevent parties from accessing the court to dispute the extent of a tenancy and the suggestion that the court did not have jurisdiction to interfere in the determination of a district valuer conflicted with Art 6, ECHR: West v Newham LBC & Another [2007] EWCA Civ 304.

Human rights

In Johnson v Havering LBC, Secretary of State for Constitutional Affairs and the National Care Association; YL v Birmingham CC, Southern Cross Healthcare, OL, VL and Secretary of State for Constitutional Affairs [2007] EWCA Civ 27, the Court of Appeal decided that a privately run care home providing accommodation to persons in need of care and assistance, pursuant to arrangements made with a local authority in exercise of that authority's functions under the National Assistance Act 1948, is not a public authority for the purposes of the Human Rights Act 1998 because it does not exercise public functions. The case has been appealed to the House of Lords and judgment is awaited.

Tenancy deposits

The Housing Act 2004 (Commencement No 7) (England) Order 2007 (SI 2007/1068) and the Housing Act 2004 (Commencement No 4) (Wales) Order 2007 (SI 2007/305) bring into force the tenancy deposit provisions of the Act. Regulations dealing with tenancy deposits are made under the Housing (Tenancy Deposit Schemes) Order 2007 (SI 2007/796); the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (SI 2007/797) and the Housing (Tenancy Deposits) (Specified Interest Rate) Order 2007 (SI 2007/798).