I've just had a guy in to see me whilst the boss is on her summer hols and so I've been left ro handle this case.

Client is suffering from severe mental depression and has recently come out of hospital after voluntarily going in due to the state of his mental health. I have now advised him to make a claim for IS/IB which in theory would entitle him to full HB/CTB. He is on DLA HRC LRM.

BUT...yes you know there's always going to be a but..

His mother is the landlord of the property and he has been told that he will not get HB which we may have been able to challenge. Problem is he has 18 months worth or rent arrears and she has not taken any steps to recover this.

Am I flogging a dead horse here now or is there any other way round it?

Help please!!!!

Wed 13-Jun-07 02:59 PM by jmembery

A couple of questions.

Is his mother a resident landlord or does she live elsewhere.

If she is not resident, does she normally rent the property out to other people, and would she rent it out to others if her son was not living there?

No she lives elsewhere. The subject property is currently being renovated as it went into disrepair and he has actually moved back home to live with her whilst this renovation is being carried out.

She bought the house with a view to renting it out but then her son and his then partner wanted to move in - they initially paid some rent, put in a claim for benefit but was refused. He has now got fresh circs which I am dealing with and wanted to make another claim for Housing Benefit.

He really wants to stay in the property as it is in a quiet area which suits his mental health condition.

Presumably with no son on the scene she would rent out to others since it was her goal at the start when she brought the property.But we would need further instructions on this.

Why was the first HB claim refused?

CONTRIEVED TENANCY

Oh dear. If it was held that the liabilty was contrived at the start of the occupation of the property, (and assuming you are out of time to appeal that earlier decision) I don't really see how the hospital admission will be a relavent change of circs. If anything, I would also think that going back to live with mum adds weight to the argument of non commerciality (although of course this is a seperate issue to contrivance). As the L/L is mum, the LA will no doubt be asking questions. Our LA have a question on their forms along the lines of "are you related to the landlord...?"

Having said all of that, the advice would be to apply anyway and see what happens. As the LL is non resident he is not automatically precluded

On the issue of contrived tenancy. It is the intention of the parties at the time the liability was created that must be examined first and foremost. Here a number of factors are to be considered, such as the level of rent, the means and circumstances of the tenant, the means and circumstances of the landlord, the availability of other affordable rented accommodation, etc. This list is illustrative, not exhaustive. Also there must be some element of intention to abuse the HB scheme and not merely an intention to avail oneself of HB.

On the issue of commerciality (covered by a separate sub-para) the test it whether the terms are legally enforceable and not whether the terms have been legally enforced. However, where a breached term has not been legally enforced then it is up to the parties to provide a satisfactory explanation as to why not. Each case will be fact specific and turn on its own merits.

It should also be borne in mind that the factors to be considered are not to be treated as obstacles for the claimant to get over but guidelines, which the adjudicating authorities should apply their minds to.

thanks - I've tried to look into all avenues which may be available but don't seem to be getting anywhere at all. I suppose there's no harm in him making a fresh application anyway.

nevip - will the issue that he has had rent arrears for the past 18 months not make it contrived considering that she has not taken any steps to recover and has actually given him accommodation in her own house?

No, the agreement can only be contrived when it is drawn up. It is the intention of the parties at the time which need to be determined. Of course, if it can be shown that the parties never intended to enforce the terms then it could be condidered contrived but the burden of proof is on the LA.

A non-legally enforceable term or a unenforced term leads to the issue of commerciality. However, the terms must relate to the occupation of the dwelling.

thanks - that makes it a bit clearer.

Paul,

Just a distinction which may, or may not, be important in the context of a controversial argument that I'm forming.

In HBR 9(1)(a), the issue is about the "...the tenancy or other agreement...."

In HBR 9(1)(l), the issue is about "...the liability...".


So, where am I going with this? Er, good question... . Ok.

I have long wondered if a LA could yet construct an argument that "taking advantage" does NOT necessarily have to be at the outset of a "tenancy". If a liability (distinguished from "tenancy") subsequently changes, then the changed liability is newly "created". Obviously, if "liability" and "tenancy" are interchangeable, the argument goes spectacularly "splat".

Just to acknowledge, I'm aware there are at least two CDs where Cmmrs have briefly looked at the "outset" issue for "taking advantage". Curiously though, both use the term "tenancy"; not "liability", even though "liability" is clearly the word used in HBR 9(1)(l). And, on a strictly informal basis at a conference this year, Cmmr Jacobs was, how shall I put it, less than impressed with that construction. But, there again, the "outset" argument has never been pursued or considered in any depth (at least not to my knowledge).

Thought I'd throw this grenade in.... .

Kevin

That’s an interesting point. I agree that tenancy and liability are not necessarily the same thing. I did say in my first post that “it is the intention of the parties at the time the liability was created that must be examined first and foremost” and in my second post I said, “the agreement can only be contrived when it is drawn up”. So if the original agreement is substantially modified that it in effect becomes a new agreement then, yes, that may create a new liability. But the general principle remains; it is the intention of the parties at the creation of the liability that has to be the starting point. Reg 9 states that “the liability is created….”

So, for example, L leases property P to T on a monthly assured tenancy, which contains an annual rent review clause. 12 months later the rent increase takes effect. That does not create a new liability, as the date of the rent increase is merely the date it takes effect. The liability for an increase in rent was created at the outset of the tenancy.

But, L leases property P to T on a 2 year fixed term tenancy. 12 months later T has an accident and requires his brother to come to live with him for a short period to care for him. L and T mutually agree to changing the terms of the lease whereby L leases property P plus Annexe A for the same rent for the next 12 months. This may well create a new liability. Difficult to see any contrivance though as the rent has not increased. If the rent had increased then the intentions of the parties at the creation of the new liability would have to be considered.

Another example, L leases property P to T on a 6 month assured short hold tenancy. At the end of the 6 months L issues T with another 6 month AST with an increased rent. Therefore, a new liability is created which corresponds with the creation of a new tenancy.

Now, what would be the situation where when the original 6-month period was up and the landlord did nothing? In such a situation the tenancy becomes a statutory periodic tenancy. 6 months later (12 months since the original tenancy was created) the landlord increases the rent (as allowed by the Housing Act 1998). Does this create a new liability or is the initial agreement to lease P for payment of rent itself the only existing liability, annual increases in rent insufficient in themselves to create new liabilities.

Good grenade, by the way!

I would be interested in hearing your “controversial argument”.

Regards
Paul