I would like to put this case out there for discussion.

I will shortly be representing an elderly couple who sold there property for £80k, as the property was getting too much for them, they have no outstanding mortgage. There was no alternative accomodation they could buy, all too expensive, and they did not want to live in rented as they new all their capital would have to be used to pay the rent, so they bought a shared ownership property through a Housing Association. HB are not paying on the basis of Non-commerciality, i am awaiting for the submission so do not have all the facts as yet, but just wondered what people thought.

My own thoughts (and this might change when i see the submission) is that this property would have been rented to a n other claimant if this particular claimant had not bought it, as per the allocations policy and criteria for home ownership set out by the HOusing Corp, and when it is sold on the next tenant/owner will also have a liabilty.

In my humble opinion it would be a brave officer who made a decision that a Housing Association tenancy was non-commercial, this is not an issue that I have ever seen come up. Are you sure they are not paying based on a determination of non-commerciality?

As far as I can see, there is no basis whatsoever to decide that an HA shared ownership arrangement is non commercial. There is loads of case law to be found that would help your client.

I agree with the above...

On the face of it, there is absolutely no reason to refuse HB on reg 7 1) (l)...

The LA could make an argument on depravation of capital grounds, but I reckon that argument would be so so thin, that any appeals listing at TAS would be for 5 mins, before the chairman laughed it out...

It is a shame that TAS do not operate like the courts, and have any submission thrown out, as not disclosing a case to answer, as the refusal of HB seems, on the strength of the post, a complete pile of pants!

I dont think the LA could argue deprivation of capital unless the following transactions took place more than 26 weeks apart

(1) The sale of the house thereby releasing equity that becomes capital that is no longer diregarded
(2) Using the money to purchase the equity share in the new home, therby converting the capital into a form that is disregarded.

Converting non disregarded capital into a form that is disregarded can amount to deprivation (see R(SB)38/85 and R(SB)40/85), but if the capital is disregarded throughout as it most likely by virtue of HB Sch 5 para 3 of the HB Regs, there can be no deprivation

I suspect that the LA may try to use the catch all "take advantage" sub paragraph of Reg 7, but if as you say they are an elderly couple who would otherwise qualify for either the disability of enhanced pensioner premiums (underlying entitlement to these premiums still exists despite all pensioners now being effectively given the same applicable amount bar the carer or severe disability premiums), then as an alternative to the shared ownership arrangement, they could possibly have simply bought a new more suitable property with a £100k interest only mortgage.

The DWP would have met the interest on it and at the standard rate this would amount to approximately £115 per week.

Looked at in those terms, the shared ownership does not look like taking advantage to me

Thanks for your replies guys. Have received the submission this morning and they're decision is based on Reg 7 (a)(l)taking advantage of HB scheme.
More facts:
Moved from own house because Mr had heart attack and garden too big to manage.
Struggled to sell house, it took three years, which HB say was plently of time to find suitable smaller house to buy or rent from LA or private landlord.
HB state "Claimant does not have explanations why this property is needed above all others", even though stated garden too big and heart attack reasons.
Shared ownership is a three bed so oversized, even though garden is manageable and new property so low maintanance.
No proerties available on open market at same price as they sold there previous home.

Could HB argue that they should have gone into rented instead?, is the ability to choose where you live, and want to buy over rent, good enough reason.

Following my argument re a £100k mortgage should put paid to the "taking advantage" line. (I know for definite that this could have been done because I rently advised my dad to to just that, he sold his house for £60k last July, increased his mortgage from £15k to £96k and bought a bungalow. The DWP pay the interest)

Going into private rented accommodation would not afford anywhere near the same security of tenure as would shared ownership, and this is something that must be taken into account.

Taking advantage in the context of Reg 7 means to abuse, otherwise nobody would ever get HB. The burden of proving this lies firmly on the Council and in my view they have no evidence to support their conclusions. The Council are putting the burden the wrong way round

Dont forget also that you could not buy a new property until the old one is sold, no seller is going to hang on for three years, they will take the first offer that they can.

Similarly its not a good idea to move into rented accommodation while you wait to sell a house because the house you are selling will deteriorate. The only other alternative would be to rent it out, but no elderly person in frail health will not want to do that!!

I would love to represent your clients at a Tribunal. I would have a field day!!!!

I'd be delighted to join Stainsby in this case. The only problem I'd have is keeping a straight face at what, on the face of it, appears to one of the worst decisions I have ever heard of. Erm, that's my considered opinion....

Regards