19 August, 2008
The recent case of R (Weaver) v London & Quadrant Housing Trust has provided guidance on when a Registered Social Landlord is to be considered as a Public Body. Here, the administrative court had to decide whether a housing trust could be classified as a public body, given only 10% of its housing stock had been transferred from the public sector, with the remaining 90% of its properties having either been built or purchased from the private sector.
The Claimant, Mrs. Weaver, was an assured tenant of the Defendant housing trust who applied for a judicial review of her landlord's decision to seek an order for possession against her. The Defendant was a registered social landlord regulated by the Housing Corporation under the Housing Act 1996. During her tenancy Mrs. Weaver had accrued substantial rent arrears and London & Quadrant had responded by claiming a mandatory right to possession under ground 8 Schedule 2 Housing Act 1988.
In the terms of Mrs. Weaver's tenancy, London & Quadrant promised that, in providing a housing service, they would comply with the regulatory framework and guidance issued by the Housing Corporation. One particular Regulatory Circular, dated July 2004, stated that before using ground 8, associations should first pursue all other reasonable alternatives to recover rent arrears.
In bringing proceedings, Mrs. Weaver submitted that:
The court held that the management and allocation of housing stock by London & Quadrant was a function of a public nature and was therefore to be regarded for relevant purposes as a public authority within s.6(3)(b).
Whilst the court conceded that the management and allocation of housing stock was not in itself an inherently governmental activity, they distinguished their decision on the grounds that the nature of London & Quadrant's activities, and the context within which it operated within the social rented housing sector, were not simply subject to detailed regulation but were in fact permeated by state control and influence with a view to meeting the government's aims for affordable housing.
The court went so far as to say that in the present day housing sector, registered social landlords worked side by side with and could in a very real sense be said to have taken the place of local authorities.
That London & Quadrant was in receipt of large social housing grants (over £268 million in two recent financial years) from the Housing Corporation under s.18 of the Housing Act 1996 leant further weight to the court's judgment with Richards LJ commenting:
'Of particular importance is the nature and extent of public subsidy of the activities of [London & Quadrant], in common with other RSLs … [London & Quadrant's] business as a whole is heavily subsidized by the state and that this funding was attributable to the role that l, like other registered social landlord's, played in the implementation of government policy'.
Having established London & Quadrant to be a public authority for the purposes of the Human Rights Act 1998, the court took the natural step and declared the housing trust to be equally amenable to judicial review on conventional public law grounds.
Although the ruling allowed the court to consider whether London & Quadrant had acted fairly when attempting to evict Mrs. Weaver from her home under ground 8 of Schedule 2 to the Housing Act 1988, as an aside and primarily for completeness, the court ruled that the housing trust had acted reasonably. On the facts, the court found that there was neither a legitimate expectation nor a breach of a legitimate expectation and as such Mrs. Weaver's claim was dismissed.
Despite this, the impact of this case cannot be underestimated. The landmark ruling now dictates that registered social landlords should be considered public authorities in relation to the allocation, management and termination of tenancies. Given that this means they now have to adhere to the provisions of the human rights laws the decision could potentially grant each and every housing association tenant the right to challenge their landlord's decisions before a judge, if they disagree with the way they are being treated.
Compare this to the previous train of thought that held that only those renting from local authorities were able to seek a judicial review and it is easy to appreciate the magnitude of the impact that this could have on the social housing sector.
Many commentators inside the sector are fearful that they will no longer be free from the rules constraining public sector providers. Criticism has been levied towards the decision by providers of social housing who claim that the court has misunderstood the nature of their orgainsations. Most registered social landlords have operated as private sector organizations for many years and are dependent upon raising private finance in the market place to make their operations viable. For many the sudden transposition of registered social landlords into the public sector will cause numerous difficulties and could even jeopardize their ability to fund new affordable homes.
It is important to note that permission to appeal to the Court of Appeal has been given to London & Quadrant, so the matter is far from over. However, housing associations are precariously placed on the fence between public authorities and private landlords. This is even more significant for those who have acquired housing stock through stock transfers from local authorities. Any registered social landlord who owns former council stock must now look at its internal review procedures to ensure that they comply with and respect their tenant's human rights. At the very least, scrutiny should be paid towards the existence of any policy which governs the circumstances upon which it is reasonable for a social landlord to rely upon ground 8 to evict its tenants.