Hello

We have a local District Judge that likes to give us a challenge once in a while. I've picked up a housing case (possession) that has been adjourned because the local authority rent card included HB overpayments as well as arrears. The District Judge queried whether it was appropriate (and/or lawful) for this to be done.

From a practical point of view I can see that it is difficult for tenants to know what division of debt there is between arrears and overpayments. If the tenant was a private tenant they wouldn't have the overpayments included on a rent card. But I'm finding it difficult to find any legal basis against the common practice to 'lump' all debt in together. The local authority haven't come up with anything yet either.

Has anyone had a similar case? I know this crosses with housing but as it involves recording HB overpayments I'm hoping someone can help?!

Thank you

The commentary & analysis to HBR 102 in the CPAG are well worth reading.

Assuming your client is a Council Tenant (i.e. any benefit paid was by way of rent rebate, not rent allowance), Housing Benefit overpayments are not legally rent arrears. In such cases, rent arrears and Housing Benefit overpayment(s) are separate debts.

The LA will need to identify the amounts for each component and the Court should proceed on the basis of the rent arrears element only; completely ignoring the issue of HB overpayment.

Just for clarification, if the arrears have arisen as a result of recovering o/p from ongoing benefit, AND your client has failed to pay the difference, the arrears in THOSE circumstances count as rent arrears.

Hope this helps.

Regards

The practice of entering an overpayment of housing benefit on a rent account in such circumstances, so that it appeared to be rent arrears, has repeatedly been held to be maladministration by the Commissioner for Local Administration in England (the Ombudsman); e.g.Wychavon

District Council, Complaint 90/B/2514 (see App. 2) and Hackney London Borough Council,

Complaint 91/A/0730.

Willie

I'd be grateful if you would let me know where i can find these complaints. I can't seem to find them on the ombudsman website. Thanks for your help!

The LA have to prove it's rent lawfully due which o/p HB is not. I think many LA's used to do this but have now realised they can't lump them together and neither can they issue possession proceedings on these grounds.

Sue

Thank you for replying so quickly but I don't think I made the query clear. The issue of only proceeding on pure rent arrears was accepted as usual and the proceedings were drafted correctly etc.

The issue the DJ adjourned the case on was whether or not the HB overpayment should be included on the rent card. So when the council tenant takes their card in to make a rent payment the balance owed on the rent card currently includes the HB overpayment too.

I think the issue is one of clear identification of the separate debts (and they are separate, as has been said) of rent arrears and overpaid HB.

In my authority, HB op's are recovered alongside rent but are clearly separated on the card (the HB OP is actually in a separate sub-account). Obviously it goes without saying that possession proceedings cannot be be taken against amounts in the sub-account. As far as I am aware this approach is legally OK.

i understand that there may be some legal difference between how a council tenant and a housing association tenant can be treated regarding an overpayment of HB as arrears.

the above posts seem to relate to a council tenant which is of interest to me but can anyone tell me the legal view on possession proceedings against a HA tenant who only has "arrears" caused by an OP.

i know that its generally frowned upon by the ombudsman and im personally against it, and for this reason im trying to get the two HA's that i have involvment with from refraining from taking action against tenants in this situation, or at least if they must then they dont classify the debt as "rent arrears" but just as a general debt.

im trying to get a submission together to present to the HA's to persuade them against this and if anyone can help me in this by giving cases where the courts have refused the possesion action, or ombudsman statements etc, id be very grateful

Assume events happen in the following order-

1. HB op placed on rent account

2. Weekly rental liability arises.

3. Tenant pays a sum to rent account without expressly stating whether for rent liability that arose that week or to pay off HB o/p

4. Next week's rental liability arises....

5. As per 3 above.

6. Repeat steps 2 to 5 as long as you want.


Problem then as follows-

Where a person owes a creditor 2 debts and pays the creditor a sum without specifying which debt it is intended to discharge then there is an assumption that the payment is towards the debt that is older. This principle comes from “Clayton’s case”(1861!) see page 474 in Findlay.

In this case, the client’s actions (as each weekly payment is put towards the HB o/p not the weekly debt which have arisen at a later date, unless the client says otherwise) are gradually turning the HB o/p into a rent debt.

I would simply refer the judge to the learned authors of the HB legislation etc. at page 474.