Failing to follow procedure can still mean valid tenancies says Court of Appeal

Article

28 October, 2009

Whenever a new tenancy can be offered for a property, it is always important for local housing authorities and housing associations to be able to show that they have awarded the occupancy in a fair and transparent manner. One of the matters that could be particularly contentious is whether the provider followed their allocation scheme correctly.

Not being able to show that this obligation, as required by the Housing Act 1996, has been met can be problematic for landlords in a variety of ways. A recent example of this was in Birmingham City Council v Mohammed Zafar Qasim & 11 others [2009] EWCA Civ 1080. The decision is arguably of considerable importance to landlords as it concerns the validity of tenancies which have been granted without the allocation scheme in question being adhered to.

The Facts

As required under the 1996 Act, the Council (C) had an allocation scheme for granting tenancies and included the requirement for investigating whether applicants had distinctive needs which would prioritise their application ahead of others. However, it emerged that a housing officer employed by C did not follow this procedure in 12 instances between May 2005 and March 2006 and tenancies were awarded to individuals who were not assessed as having priority needs under the scheme. It was said that all of the tenants were living in the properties in the interim period and had paid the required rent in full and on time.

It was also said in court that upon learning that a property was vacant, the housing officer was able to obtain the keys to it before receipt could be logged and therefore the officer was able to avoid the allocation policy and let the properties at his discretion. Upon this information coming to light, C sought possession of the properties, arguing that they were not valid tenancies as procedure had not been followed.

At the initial trial, it was held by the judge that they were valid secure tenancies which were binding upon C and that they had not been granted in circumstances which justified a possession order being made. C appealed again to the Court of Appeal.

The issue to be determined by the Court of Appeal was whether a secure tenancy granted by a local authority under the Housing Act 1985 was void because it was given to someone who had not been selected in accordance with the authority's housing allocation scheme.

The Court of Appeal's Decision

The Court of Appeal rejected C's appeal. The court was of the view that the notion that the granting of a secure tenancy would be void unless it was allocated strictly in accordance with the allocation scheme would inappropriately state the duty to allocate accommodation and the ability to dispose of it.

The provisions governing a local authority's powers to dispose of its property was to be found in the 1985 Act, which regulated these powers, and were quite different from those in the 1996 Act. The latter required local authorities to prepare housing allocation schemes and allocate housing in accordance with that, whereas the former addressed the issue of granting tenancies and gave a 'free hand' to local authorities in relation to making use (or disposing) of properties by secure tenancies.

In short, it was considered that the granting of tenancies to the tenants in question were breaches of the statutorily prescribed scheme for selecting an applicant, rather than a grant of secure tenancies not in accordance with statutory requirements. Therefore, the tenants were entitled to remain in the properties as secure tenants.

Summary

This case is a prime example of what can happen if housing providers do not follow their own procedure and policy as well as those imposed upon them by statute. The courts generally view eviction and terminating tenancies to be options of last resort and if it is the judge's view that the ending of the tenancy would be due to, even in part, the fault of the landlord, then it may be very difficult for a possession order to be obtained.

Landlords are advised to regularly review their own policies and ensure that all members of staff have a sound knowledge of the rules that they must follow. Routine training on the legal obligations of housing providers may also be beneficial.

For more information and assistance on these issues, please contact the Housing Litigation Department at Forbes Solicitors on 01772 220200 or contact Stuart Penswick by email.

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