CH/2743/2003 and CH/2258/2004 both take the view that where a landlord grants a tenant a tenancy expressed to be for the length of the tenant's life, then such a tenancy is a "long tenancy" for the purposes of the HB legislation and such a tenant cannot qualify for HB.

At a Tribunal at which I recently appeared, a District Chairman sitting in Birmingham has distinguished those two decisions on grounds which may be useful to other advisers.

First, the Chairman rejected on the facts my submission that the true intention of the parties was to create a periodic tenancy with a restriction on the right of the landlord to recover possession. On different facts, this might be an argument which is available. A Tribunal would have to have regard to all the background facts in deciding what the intention of the parties was.

The Chairman went on, however, to allow the appeal on the ground that the life tenancy was agreed orally between the landlord and tenant. By sections 53(1)(b) of the Law of Property Act 1925 and section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, a life tenancy cannot be created orally and such a purported grant will take effect as a periodic tenancy, a tenancy at will or a licence (precisely which does not matter for HB purposes).

Thus in any case such as mine, where a son-in-law informally granted the claimant a life tenancy, the Commissioners' decisions are distinguishable. Furthermore, since the 1925 and 1989 Acts set out certain requirements as to the validity of documents creating interests in land (such as tenancies), similar arguments may be available where there is some document recording that a life tenancy has been granted.

I also made an attack on the reasoning in the two Commissioners' decision. The argument is as follows:

(1) The definition in reg 2(1) of the HB Regulations refers to a “tenancy granted for a term of years certain”.

(2) The wording of s149(6) of the 1925 Act provides that “a lease .... for life .... shall take effect as a lease .... for a term of ninety years”.

(3) The contrast in wording is significant. Even if the son-in-law intended to create a life tenancy, what he granted was a life tenancy, which is of uncertain duration. He did not grant a term of years certain. The effect of s149(6) is not to deem the granted term to be different from what it actually was; it merely provides that the granted term “shall take effect” as a ninety-year tenancy.

(4) I think this view gains support from the definition of “term of years absolute” in s205(1)(xxvii) of the 1925 Act, which is equivalent in meaning to the phrase “term of years certain” as used in reg 2(1). It is reasonably clear from the rather archaic language in the definition that “a term of years determinable with life” does not fall within the definition of “term of years absolute”.

(5) Accordingly, such claimants do not have "long tenancies" within reg 2(1).

The Chairman did not have to decide whether my argument was correct, but noted it sympathetically in her decision.

An Appeal Tribunal is, of course, ordinarily bound by a ruling of law given in a Commissioner’s decision. It may be arguable that the Commissioner’s decision is per incuriam; that is, it was reached without having regard to a relevant statutory provision, namely s205(1)(xxvii) of the 1925 Act. In those circumstances, a Tribunal would be justified in not following the two decision. I think that it is more likely that the Appeal Tribunal will have to regard itself as bound by the Commissioner’s decision and that it would be necessary to make a further appeal to the Commissioner in order to challenge the analysis in the two decisions.

Mon 31-Oct-05 03:15 PM by shawn

Hi Paul,

A contributor to HBinfo, Charlie John, has taken a look at the above post and respectfully suggests that there are further arguments -Charlie has given her permission for this to be posted and it is intended to be a constructive contribution. Text in pointy brackets (e.g. "<text>") has been edited, with no effect on meaning.

Any further observations would be much appreciated, Paul.

---------------------------------------

A lease creates a legal estate - known as a "term of years absolute". To explain where <the argument in the original post has gone astray>, you need to break down the components of this terminology.

In order for a lease to be a legal estate under the Law of Property Act 1925 s1(1), it must be for a "term" i.e. a fixed period. So in Lace v Chantler a lease for "the duration of the war" was not a legal estate since at the time it was granted the exact period for which it would run was not known.

"Of years" also includes a term for less than a year, or for a year, or for years and a fraction of a year, or from year to year (Blimey!) LPA 1925 s 205(1)(xxvii).

"Absolute" is a term of art which means that the legal estate is not liable to end prematurely (as in "fee simple absolute in possession" which is the only other legal estate recognised at law). Given that many tenancies or leases may contain break clauses which allow for earlier forfeiture, some commentators have suggested that the use of the word absolute makes "no intelligible sense" in this context (Megarry and Wade) - whatever might be meant by the word "absolute" in this context it unquestionably does not equate to "certainty" as suggested <in the original post to this thread>, since the certainty element of the equation is contained in the word "term".

Clearly given the above - a "lease for life" presents a problem. It would not under the above rules appear to be capable of amounting to a legal estate, since it does not fit the requirement of being for a term of definite duration. This is where LPA s 149(6) comes into play by automatically converting such a lease into a fixed term of 90 years determinable on death - which means that, upon the death of the tenant, the landlord or the tenant's personal representatives have the option to terminate the tenancy by serving one months notice.

Therefore a claimant who has a "life tenancy" (which accords with the provisions of the LPA 1925 and LP(MP) 1989 in relation to the formalities for creating such leases) has a lease recognised at law as for a "term" of certain duration - which would fall within the provisions of Reg 2(1).

<This is supported by a substantial body of case law in this area confirming the above.>

A much stronger argument is the issue of whether the purported grant of the lease fails at law for lack of formalities. Not only does any such lease granted after 1989 will require a written contract, such leases will also require a deed (LPA 1925 s.52)(1) as they are for a duration of more than 7 years. (Contract but no deed may create an equitable lease however, but that's <a> whole other kettle of fish).

--------------------------------------------------

Regards

I cannot believe this has come up - the Charity I work for has just had this particular problem in relation to an Assured (Periodic) tenancy we issued to a new Beneficiary. A Local Authority refused to award HB on the basis that our "lifetime" tenancy was not acceptable in Law and did not constitute a true tenancy.

Fortunately, a sympathetic benefits officer suggested that if we include a para in the agreement defining how and under what circs we would terminate the agreement, it would be accepted.

We did this on this one occasion as the Beneficiary was extremeley frail and becoming increasingly distressed.

We have no idea if we are going to have to include this para in all our Assured tenancy agreements or whether we should wait and see if anyone else objects! It is made all the harder as there are no circumstances under which we would ever evict a beneficiary. Any advice wold be more than welcome.

We use the standard RICS Asured tenancy agreement.

Belaibel:

From the outset, it is only right to point out that my knowledge of Housing Law is very limited. However, based on the info given in your post, my view is that the LA is simply wrong.

Although an Assured Tenancy may well provide a tenancy for the remainder of the tenant's life, a normal grant of an Assured Tenancy will not contain a *term* saying that the tenancy is "for life".

The Commissioners' decisions in question almost invariably affect family situations where a relative says to another something along the lines "you can live here for the rest of your life". It should not affect "normal" Assured Tenancies.

Hopefully, someone with a better understanding can offer more analysis relating to the issue of the "term" of tenancy in the specific context of "normal" Assured Tenancies.

Regards

Thanks, IP. Our Assured tenancy agreement does not, in fact, state "for life" or anything similar, in fact no term is mentioned whatever. The LA concerned asked us to include a para. stating that we would take legal action to evict if certain T & C's were not adhered to.

I felt it was all a nonesense and in other circs would have fought them on it, but as I've said, we have to hold the health and wellbeing of our Beneficiaries as our first priority and this was affecting him badly.

Having read all the above, I will certainly make a stand and fight any other attempt to inflict this on us. If it ever comes to that, I'll keep you all informed.

Belinda