Local Housing Allowance Special @ The Grosvenor, London SW1

**jeffrey** · 09-03-2011, 13:01 PM

But, LondonPropertyNetwork, what's your own role in all this?

**IronsE11** · 09-03-2011, 16:31 PM

Let me guess...

He is advising that L/L's should collude with their tenants to break their LHA claim for a week in March 2011?

LHA protection is effective from the LHA anniversary date, so those claims approaching the anniversary date (After April 2011) will only have their current levels protected for a further 9 months. "New claims" made in March 2011 will have an anniversary date of March 2012 and so will essentially be protected for the best part of another year.

It may even be possible for L/L's to increase the rent to the current LHA level for the period of the "new claim", although the LA may query why a new T/A (with an increased rent) has been signed to supersede the previous one.

Breaking the LHA claim (and foregoing a week's rent) is a no brainer if there is a significant difference between the current LHA rate and the new resticted rate. Obviously the L/L could simply look for a new (non-LHA) tenant, however if the current LHA rate exceeds the rent the property would command on the private market, then they might as well continue to take advantage of the current LHA rate?

There is nothing the LA can do regarding the break in claim and new anniversary date, although they may view any rent increase as taking advantage of the scheme.

**Michael Clayton** · 17-03-2011, 09:17 AM

I make reference to the 'Baragrove case'.

Baragrove are/were a letting agency who (it was argued) specifically advertised for
HB tenants who were members of vulnerable groups and charged them excessive
rents in the knowledge that Housing Benefit would be difficult to restrict. (This applied under the 15/1/89 to 1/1/96 HB scheme).

Manchester City Council felt that the tenancies were created to take advantage of the Housing Benefit scheme and refused Housing Benefit. This decision was challenged in the Divisional Court, who found that Manchester City Council had adequate grounds to treat the tenancies as being created to take advantage of the Housing Benefit scheme.

It will be interesting to see if a local authority applies the same maxim in these cases. However, nowadays the most HB that can be awarded will be equivalent to the LHA. So, unlike in Baragrove, the authority is not being asked to subsidise payments and so there is less incentive to fight against such practices.

www.housingbenefithelpline.co.uk

**jeffrey** · 17-03-2011, 12:55 PM

So effectively these 'Baragrove' cases were treated as "Contrived tenancies" akin to inter-family cases.

**Michael Clayton** · 17-03-2011, 13:48 PM

Regulation 9(1)(b) of the Housing Benefit Regulations 2006 specifically provides that a person who resides with, and pays rent to, a close relative should not be treated as liable for their housing costs and thus will not be entitled to Housing Benefit.

(For those who are not aware). You should note that a person who rents his accommodation from a close relative but does not reside with him, does not fall foul of this particular provision. Such an arrangement may seek to take advantage of the HB scheme, bearing in mind other aspects of the arrangement, and thus fall foul of regulation 9(1)(l) (below). On the other hand, it may be a perfectly normal and legitimate tenancy.

I would like to think that common sense is applied. However, what tends to happen is that the 'close-relative' fails to apply (in the mistaken belief that they are not entitled) or goes to the opposite extreme i.e. denying the family-relationship, in what otherwise be a totally legitimate set of circumstances.

Regulation 9(1)(l) prohibits entitlement to HB where it is believed that the tenancy was entered into in order to take advantage of the HB scheme.

It is much easier to establish 9(1)(b) as close-relatives are defined within the regulations. For 9(1)(l) the test is wholly subjective.

As for 9(1)(l), what tends to happen is that if a local authority does not like the look of a particular claim, the claims process as difficult as possible. By this, I mean that a lot of superfluous questions so as to avoid the need to make an actual decision. This causes inevitable delays.

When I worked as an Appeals Adjudication Officer, I used to find that the Assessors decisions were often based on a gut-feeling that something was amiss. Often, an attempt was made so as to string a number of points together in order to justify a refusal. Suspicious minds thriving on the various clues.

The claims that tended to survive were from tenants who entered the appeals process rather than give up at the first hurdle.

Harking back to my 'Appeals' days, I rejected about twenty per-cent of all appeals received (the average of my colleagues was even lower!). As such, I wrote about one-hundred and twenty five submissions (where I believed there to be no entitlement to HB).

As such, I allowed the other three hundred and seventy-five (or thereabouts) on the basis that the initial local authority rejection was invalid. This was often due to a mistaken belief (as to the law) or down-right stupidity on the part of the Assessor.

In all honesty, the chair-person (legally qualified solicitor at the Tribunals Service) would, in some cases, have laughed me out of the building had I tried to pursue some of the more tenuous reasons for refusal.

**Michael Clayton** · 17-03-2011, 16:28 PM

As slight mathematical error in my previous post.

I refused about 25% of appeals and allowed the other 75%. This may same generous (to the appellants) but I was actually regarded as something of a hard-liner; the average refusal/allowance figure amongst colleagues was about 15% / 85%.

The point I am trying to make is that it is no use the HB office having a hunch. The law (and the correct interpretation of it) is what counts.

If your tenant's encounter problems then try to ensure they see the whole of the HB process through.

**IronsE11** · 21-03-2011, 11:44 AM

[QUOTE=Michael Clayton;291665]Regulation 9(1)(l) prohibits entitlement to HB where it is believed that the tenancy was entered into in order to take advantage of the HB scheme[QUOTE]

Further to my last post, my LA is viewing mutually terminated and resigned AST's with rent increases as contrived tenancies.

**hbadvocacy** · 21-03-2011, 21:16 PM

IronsE11,

I reckon your council could come a cropper pursuing such a line to the First-tier Tribunal if it uses Regulation 9 (l) as the basis for its decision. The title to the regulation gives its purpose away 'Circumstances in which a person is to be treated as NOT (my emphasis) liable to make payments in respect of a dwelling'. If you examine each of its sub paragraphs the purpose is to deny HB rather than reduce it. However, another regulation 12 B (6) could be used where the 'eligible rent as determined in accord with the preceding paragraphs of this regulation is greater than it is reasonable to meet by way of HB, the eligible rent shall be such lesser sum as seems to that authority to be an appropriate rent in that particular case'. some of the London Boroughs have been using this regualtion for quite some time, mainly where rent inreases where deemed to be excessive or where property was considered to be of very poor standard.

The 'Baragrove Properties' case as Michael previously explained is quite a famous case of 'abuse of the scheme' focused on a certain group of claimants where the landlord was able to charge exceptionally high rents, many more times the norm. The case was decided quite a few years ago and in my view would have limited use in the type of scenario you've referred to. In CH 0039/2007 Judge Jacobs explains that 'to take advantage of the scheme' did NOT mean 'make the most of the opportunities that it presents'. In another famous case Stratford-Upon-Avon B C ex p White the court of Appeal stated ' The answer in my opinion, lies in giving the words 'take advantage' its common meaning to 'avail oneself improperly or unfairly'.

It's perhaps not surprising to find some enterprising landlords trying to protect themselves from the vagaries of the April 2011 changes. It will be interesting, over the coming months, to see how councils respond to some of this 'innovation'.

hbadvocacy
www.hbadvice.co.uk

**Michael Clayton** · 22-03-2011, 10:41 AM

The discretionary power referred to (Regulation 12B(6)) does not concern LHA cases.

Eligible rent
12B.-(1) The amount of a person's eligible rent shall be determined in accordance with the provisions of this regulation except where regulations 12C (eligible rent and maximum rent) or 12D (eligible rent and maximum rent (LHA)) apply.

**IronsE11** · 22-03-2011, 11:17 AM

Originally posted by hbadvocacy View Post

IronsE11,

I reckon your council could come a cropper pursuing such a line to the First-tier Tribunal if it uses Regulation 9 (l) as the basis for its decision. The title to the regulation gives its purpose away 'Circumstances in which a person is to be treated as NOT (my emphasis) liable to make payments in respect of a dwelling'. If you examine each of its sub paragraphs the purpose is to deny HB rather than reduce it.

Thanks.

In such cases, HB is actually being denied as opposed to reduced.

I am not involved in the decision making process, but I would imagine that it will be argued that it is only the new tenancy which is contrived. It's hard to reason that any person in their right mind would agree to terminate a tenancy, then sign a new one with a higher rent but on exactly the same terms, unless it were to take advantage of the scheme.

It will be interesting to see if my LA changes it's Policy, and what will happen if any such cases are taken to tribunal.

Originally posted by hbadvocacy View Post

Judge Jacobs explains that 'to take advantage of the scheme' did NOT mean 'make the most of the opportunities that it presents'

Ha ha, I love these legal definitions.

I didn't take advantage of her, your honour. I merely made the most of the opportunity she presented me!

**hbadvocacy** · 22-03-2011, 19:32 PM

Michael/IronsE11,

Michael,

The discretionary power undoubtedly applies to LHA. See the analysis on page 297 of CPAG's Housing Benefit Legislation (22nd edition).

I also spent three days at an oral hearing in Cambridge just before Christmas debating the draconian use of Regulation 9 (1) (a) & (L) the narrow interpretation which should be applied to these provisions, and their relationship to 12 (B) (6) with two barristers and a Judge who shares chambers with Richard Poynter one of the principal authors of the HB bible. As I said in my related post it will be interesting seeing how things develop in the forthcoming months as the 'innovation' of landlords is exposed to tribunals at both levels.

IronsE11 - if you read the Jacobs decision in full you'll find he elaborates on the quote I provided. As one of the most eminent Judges on the circuit his opinion, whether you agree with him or not, carries considerable clout, just as it should, with tribunal Judges.

hbadvocacy
www.hbadvice.co.uk

**Michael Clayton** · 26-03-2011, 13:56 PM

Bill.

Please refer directly to the legislation that allows the use of the discretionary power in reducing LHA awards.

I have never seen an instance in which a council has restricted an LHA case. The upper-limits are supposed to act as the self-regulatory mechanism. That is the basis of LHA.

It seems highly illogical. There are no subsidy incentives. Moreover, it would completely undermine the ethos of the LHA scheme if councils were to act in such an arbitrary way.

**hbadvocacy** · 27-03-2011, 09:02 AM

Michael,

I see you're still holding tight to that same bone.

You asked me for the legislation. Regulation 13D (12) provides the confirmation. You'll see the definition of "cap rent" includes the express permission in 12B(6). The LHA guidance manual in paragraph 2.122 confirms its use as does my previous post when I cited the Cambridge case I was involved with and its reference in CPAG's Housing Benefit bible which all the judges use as their key reference point.

It's NOT a new provision. There has always been a residual discretionary power to restrict rents where the council can demonstrate it's reasonable to do so. I was doing a full day LHA workshop in Kensington on Friday. The VOA representative (previously Rent Officer service) also acknowledged the use of 12B(6).

It's also an entirely "logical" provision because it can be used to restrict rents where properties are of a poor standard. Some Councils encourage landlords to improve their properties by first of all imposing the restrcition and later withdrawing this when they carry out the necessary repairs and refurbishments.

I hope this clarifies the situation.

hbadvocacy
www.hbadvice.co.uk

**Michael Clayton** · 31-03-2011, 07:42 AM

Bill.

Thanks for clarifying.

I have not encountered any cases in which LHA has been restricted below the LHA. This partly what explains the gap in my knowledge.

In your experience, how would an LHA sanction be imposed? In a given example, what would be a typical course of events?

Local Housing Allowance Special @ The Grosvenor, London SW1