I am acting for a fairly newly formed charity that has opened a residential drug rehab centre. Residents enter for an initial period of 9 months and participate in various counselling and rehab programs, although the charity appear to be prepared to extend the accomodation in some circumstances. Actually that is not quite right, I am formerly instructed by three of their residents but the cases are identical and the issue could make or break the charity concerned.

All three claimants have been turned down for HB on the basis that their liability is not comercial. Most of the claims have been in place for several months but the LA have only just made decisions on each case (which are identical).

The nub of the matter seems to be that when initially asked for proof of liability the charity submitted copies of a "pre admission agreement" signed by each of the claimants. This document was really part of the application procedure used by the charity for prospective tenants and contained various provisions including agreeing to be "clean" for 48 hours before admission and agreeing to pay the lions share of their other benefits (i.e. Income Support) to the charity to cover non eligable costs..food, cleaning and some support sevices.

The LA turned round and stated this was not satisfactory and so the charity put in place what are essentially bog standard licence agreements...duly signed and submitted to the LA.

LA now appear to be relying on the "pre admission agreement", stating that they contain non enforcable clauses which indicate non comerciality.

As an aside, I don't know a great deal about supporting people funding but I am told that the charity hope to access this in due course once they are acredited (by social services?)but can't do this until they have been in operation for 12 months.

All the tenants are now in considerable arrears and I am aware that one issue may be the approch of the organisation, i.e. would they evict? However the org has survived thus far on charitable donations and feel that they would be renaging on their mission statement if they did. None of the residents would have anywhere else to go.

Those two points aside, does anyone have any similar experience or case law they can point me to. It strikes me that the LA have been over reliant on the "non enforcable" clauses of the initial agreement and seem to be missing the point of what is going on. I am told thta a number of similar organisations are watching this case with keen interest. All help and suggestions gratefully received!

Apologies for the length of this post!

There are 3 main cases where the'commercial test' has been specifically considered:

R v Sutton London Borough Council ex. p Partridge (1996) 28 HLR 315
R v Rugby Borough Housing Benefits Review Board ex. p Harrison (1996) 28 HLR 36
R v Poole Borough Council ex. p Ross (1996) 28 HLR 351

It is not enough to exclude an entitlment to benefit where the arrangements in place have non-commercial elements. The test depends on the dominant purpose of the agreement, if the provision of accommodation for financial return is the dominant purpose, rather than secondary, entitlement should not be excluded.

This would obviously depend on the particular circumstances of your case.

See also R(IS)11/98 R(IS)17/94, CH/0627/2002,CH/1076/2002, CH/1618/2002, R(H)1/03 and CH/1097/2004 to ite just a few.

From what I can see, the LA have not looked at the arrangementas a whole, but have focused on juast one or two aspects and then decided it was not a commercial arrangment.

All the decisions I have cited will provide you with ammunition to challenge the Council's decision

Many thanks to both of you, the info is very useful indeed. Will keep you posted on progress.

Further to the previous posts, this case is only now slightly forwards in that the decision is currently under review but I suspect it will still go to tribunal. The above contributions were very helpful in putting together grounds for the appeal.

I'm posting again in the hope of canvassing opinion on the following. I am considering the possibility of submitting evidence concerning other supported housing organisations who also have policies or house rules imposed on tenants/licencees in the area which might not ordinarily be considered comercial clauses but where the residents have not had any problem claiming HB. The idea being to add weight to the contention that the issues raised in the appeal are not unique or unusual and therefore not non-comercial.

Clearly such evidence does not go directly to the particular circumstances in my clients case and unless I can pursuade appropriate officers from these other organisations to put there head above the parapet and come along as witnesses, it will be heresay evidence at best. Despite this I think it could still add some weight to my clients' cases.

Do people think this is a good idea or am I more likely to just annoy the tribunal chair? If I do follow this through what are people's thoughts on the best way to present this sort of evidence?

All thoughts and ideas appreciated!

Although on a different point Street v Mountford HL (1985) may be worth a read, regarding the principle of looking behind the wording of the tenancy to ascertain the true situation.

For example, it alludes to "the golden rule that the law does not impute intention to enter into legal relationships where the circumstances and conduct of the parties negative any intention of the kind". Thus vice versa, it is the conduct and circumstances of the parties that are crucial and not necessarily the wording of the documentation, even though regard must be had to it.

I always think of S v M as being soley related to the issue of tenancy v licence but that is a good point and I might go back to it. Will take me back to studying land law zzzzzzzzzzzzzzzzz

These wouldn't happen to be alleged "exempt accommodation" cases?

The LA's reasons for the decision only state commerciality and (worryingly) liability created to take advantage of the HB scheme.

NOTE: For transparency, I disclose a potential conflict of interest in "exempt accommodation" cases. I have assisted LAs in such cases, and continue to do so.

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Sorry Sue - my post should have been clearer.

I wondered if these are "exempt" cases in the sense of being (potentially) subject to "old" HBR 11? (i.e. not restricted to the rent officer figure under the current rules).

Below, I've used the word "contrived" as shorthand for HBR 9(1)(l) - taking advantage etc...

If your cases have been presented to the LA as being exempt, this *may* go some way to understanding why / how the LA has gone down the path of non-comm and, particularly, "contrived". In short, I suspect they are less than convinced about the integrity of the alleged agreements between two, or more?, of the parties. IF that is one of the factors, it's conceivable (nothing more, nothing less) that elements of Baragrove may have been considered by the LA.

For obvious reasons, clmts & representatives tend to argue that the facts of Baragrove are so different from their own case(s), that Baragrove cannot possibly have any bearing. On the other hand, LAs will argue that it isn't just the facts that count; it is also the legal principles. One such principle is that it is quite possible to reach a conclusion of "contrived" without any blame being attached to the clmt. Indeed, at Tribunal, this has been successfully argued (from an LA standpoint) relatively recently. It isn't known if such cases will be taken to Comissioners.

I appreciate that my potential conflict of interest may cause difficulty in more info being posted by you. But, hopefully, the above may be useful to the extent of giving an insight to one of the possible scenarios.

Regards

On both the facts and the legal priniples so far, I would be confident of taking this case on and winning, after all residential and nursing homes operate on a commercial basis and also devise house rules depending on their clientelle.

They even quite legally demand top up fees from relatives if social services payments do not meet the full bill, and its considered to be normal commercial practice.

The burden will be on the LA to show that the liability was created to "take advantage" ie to abuse, to exploit or to put it bluntly to rip off housing benefit.

I dont think they have any evidence for that

Thanks Kevin, must admit that I hadn't given any thought to the old reg 11 as in my view we hadn't got as far as the LA actually calculating the eligable rent but I guess they must have had that in their minds from an early stage as now I look at it the accom will be in an exempt category. Not sure that I understand how that would lead on to comerciality/contrivance? Surely liability comes first, then calculation of eligable rent and consideration of whether it is exempt? . MAybe I'm just being nieve. Are you saying that LA might think "Aha...this will be an exempt accom...therefore LL's are out for all they can get..therefore this is a contrivance"? Or am I missing the point?

I think that is the mindset of some LA's, its almost a canteen culture. Some LA's also have habit of deciding that all arangements between friends or relatives must be in their shorthand "contrived".

All the cases I have taken on have resulted in the LA backing down.

I helped someone with a case invloving LB Bromley that went to Tribunal (another advice agency represented on the day) and the Council lost hands down

Sue - very sorry for not noticing your response earlier (personal / family circs mean work has taken a back seat).

Yes - the line of thought you mention is the possibility that came to mind.

Regards

STOP CALLING ME SUE!

(rant over)

Erm, apologies! I have no idea where that assumption sprung from....

(bowing & scraping over)

I must admit I'd been reading you posts for ages, making excatly the same assumption. I was recently surprised to discover you were actually simon (I have got that right hven't I?).

I've just googled 'sue lloyd' to see where it might have arisen from and discovered that she was the actress who play Barbara Hunter in Crossroads, although there were also a fair number of hits for this news item: 'Slave descendants sue Lloyd's for billions'!

Actually it's Steven. This whole Sue thing is rather funny. I think it may come from the fact there is a SueLees on the forum. Didn't Sue Lawley used to be Sue Lloyd or did I imagine that?

Maybe you are thinking of Sian Lloyd, the weather reader whose hands move over the map as if she wants to get a job as a masseuse