Hi!

I have a client who is being evicted by their landlord as he wished to sell the property. The sale fell through and now he has propositioned the client that if they break their Housing Benefit claim and make a LHA claim(the property has 6 bedrooms and the present rent is £1200, the LHA for this size is significantly higher), he will set up a new tenancy agreement.

A few alarms bells are ringing off to see if this would be seen as a contrived tenancy, but can't see to find any details.

I haven’t read it but apparently HB/CTB General Information Bulletin G10/2008 address the issue.

G10 dealt with the ability of claimants to withdraw a claim, but I suspect the potential problem here will be whether this will be considered a "contrived" tenancy, to use the shorthand.

I am afraid that different LAs are taking different views on this.

Some are treating any such arrangements as "contrived" and refusing the claim.

Some are looking at the origional tenancy agreements to see if the rent increase is consistant with the terms of the tenancy.

Others are taking the view that this was a predictable effect of LHA and are paying the claim based upon the new rent.

Not very helpful for you I know, but sadly the lack of guidance from the DWP on this has caused much confusion.

You say "being evicted". What stage has the process reached, and have they in fact had their existing tenancy legally terminated anyway? Or has he merely indicated that he would like them to leave?

Welcome back to the forums Hollie!!

Interesting question... I can see the issue from both sides. On the one hand, this would appear to be a clear contrived tenancy, but on the other, it could be argued that there is no real difference between this scenario, and anyone else who breaks their claim to get an advantage under LHA. There is, after all, nothing inherently wrong in 'benefit planning' to take advantage (there is a CD to this effect but I don't know the reference).

The major difference is that, if the notice period has expired, then a new tenancy will be created so there is that element of the 'tenancy being created'. If the existing tenancy hasn't already ended, then there is an argument that the tenancy isn't being 'created' (if that makes sense).

I'm also wondering about the tenants needs in LHA? The LHA rate is based on the tenants needs and not the size of the property. So if the tenant needs less than six rooms under LHA, they might actually be worse off when the local reference rent currently in force is compared with the applicable LHA.

Tony

The major difference is that, if the notice period has expired, then a new tenancy will be created so there is that element of the 'tenancy being created'. If the existing tenancy hasn't already ended, then there is an argument that the tenancy isn't being 'created' (if that makes sense).

Purely on the techie side (nothing to add relating to the case in question), "taking advantage" is related to the creation of the "liability", not the "tenancy" (or agreement).

In my view, this is a potentially critical distinction. I have long held the view that a rent increase can fall foul of HBR 9(1)(l). In CH/3458/2002, Cmmr Fellner considered that "taking advantage" could only be considered with reference to the outset of the tenancy. However, HBR 9(1)(l) refers to liability, not tenancy.

Notably, in CH/0039/2007 (para 49), Cmmr Jacobs appears to take the view that a rent increase might involve the creation of a new liability.

My (long held) view is that, if the term "tenancy" (or agreement) can be distinguished from "liability", a rent increase can definitely result in HBR 9(1)(l) being engaged - this would be consistent with Cmmr Jacobs' reference.

As an aside, it is highly likely that this specfic issue will be properly tested at Cmmrs in the foreseeable future. One or two cases of which I have knowledge are currently bubbling under.....

sounds like a chicken (tenancy) and egg (liability) question...

There are some interesting issues around liability/tenancy. Things might not be so straightforward as first appears. Have a look at Kevin’s and mine last posts in the thread below

http://www.rightsnet.org.uk/dc/dcboard.php?az=show_topic&forum=102&topic_id=5043&mode=full

Thank you all for your views.

I was asking the question on behalf of a colleague, a Housing Advisor who also much appreciated the advice.

At present the client has requested to the Local Authority to cancel the HB award (this would have had to have happened anyway due to the fact the eviction notice was dated for the next week). Client was advised to then make a new HB claim. My colleague has written to the Landlord with advice regarding how the Local Housing Allowance works and there would be a break in the Housing Benefit claim for the client. As far as I am aware the family should still qualify for a 6 bedroom property with the number and age of children.

So we wait here to see what conclusions are made by the Landlord (if he will stop eviction proceedings) and the Local Authority.