The Housing White Paper 2017 – Build, Build, Build!!
Friday 17th February 2017
What does it say?
The Government wants to plan for the right homes in the right places: In the past, Local Authorities have been allowed to calculate where housing needs are highest often resulting in difficult decisions being avoided. Now the government will aim for a new standard methodology as to where demand is greatest to build.
Housing Associations have a vital role in plugging the housing deficit. “In due course” a rent policy for social housing landlords will be announced. This new rent policy should allow social landlords to borrow against future income. The 1% rent reduction is in place until 2020.
Housing Associations “belong in the private sector”. Encouraging private sector borrowing, more risk, more joint ventures, more commercial thinking. And if you don’t start thinking this way, you may find that you are pressurised to merge with another organisation that will.
There is an expectation that Housing Associations will “make the best use of whatever development capacity they have to meet social need”. But make sure that your organisation doesn’t over-stretch its resources and find itself in dire straits. Consider: what will happen in 2020? Would a new government perform a U-Turn on rent policy, with another rent reduction or a rent freeze? Landlords need to be prudent and weigh up the risk. Development work needs to be robustly stress tested to ensure your organisation knows its breaking point and allows some financial headroom.
There is also a microscope on Housing Associations’ efficiency and the need to improve performance. This, the White Paper states, may be through merger. The Government has made clear that its preference is to have a far reduced number of Housing Associations. If you decide to build, you better be ready for the challenge both financially and in governance terms.
April 2017: the Government will introduce lifetime ISAs to allow people to save. This will allow a 25% bonus on up to £4,000 saving per year. These savings can be put towards a house or withdrawn at the age of 60. Housing Associations should be looking at various tenures and target those who take advantage of this scheme.
Help to Buy: a further £8.6 billion for the scheme to 2021
Starter Homes: for those with an income of under £80,000 (£90,000 in London). Previous larger schemes requiring 20% of new developments over a certain size to be starter homes have been shelved and will be replaced by an “expectation” in the National Planning Policy Framework that housing sites will deliver a minimum of 10% affordable home ownership units.
Extension of Right to Buy Discounts: the pilot with five housing associations was, according to the White Paper, a success and will now be expanded to a regional pilot and it is estimated this will allow a further 3,000 tenants to exercise their RTB. Depending on the geographical area, this may have a negative impact on Housing Associations. Again, we recommend stress testing.
- An additional £1.4 Billion for the Affordable Homes Programme. The restrictions on funding have been relaxed so builders can build a range of properties including affordable rent.
The White Paper doesn’t set out many ‘new’ ideas, but I can’t help thinking that this is an exciting time. There is a lot of grant available, especially if you have land and are willing and able to develop. And as long as you have a robust financial plan in place and the headroom to develop now seems to be the time to do this.
The health warning is the same as ever, don’t over stretch, have a plan, have exit strategies in place, stress test your business model and ensure this is right for your organisation.
The consultation on this paper is open until 23:45 on 2nd May 2017.
Author: Catherine Fearon
Court’s permission now required prior to seeking a warrant
Tuesday 25th October 2016
Stop Press: This warrants further reading!
The Court of Appeal has handed down a significant judgment in the case of Cardiff City Council –v- Lee  EWC Civ 1034.
The Court was tasked with determining whether Civil Procedure Rule 83.2 requires a landlord to first of all seek the court’s permission before applying for a warrant of possession upon a breach of a suspended possession order.
The common position until now appears to have been that permission was not required and upon breach of a suspended possession order (unlike breach of a postponed possession order), landlords simply needed to seek an eviction by way of application for bailiff’s warrant on court form N325.
In this case the tenant had breached a Suspended Possession Order relating to anti-social behaviour. The landlord applied for a warrant using the standard form N325 and the tenant applied for a stay of the warrant.
The relevant parts of CPR 83.2 that the Court considered are as follows:
83.2(3) a relevant writ or warrant must not be issued without the permission of the court where –
(e) under the judgment or order, any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged that the condition has been fulfilled;
(4) An application for permission may be made in accordance with part 23 and must –
(a) identify the judgment or order to which the application relates;
(b) if the judgment or order is for the payment of money, state the amount originally due and, if different, the amount due at the date the application notice is filed.
The court decided the rules do apply when obtaining a warrant for breach of a Suspended Possession Order.
The Court said that the purpose of CPR 83.2 was “to provide a layer of judicial protection for a tenant whom the landlord wants to evict” and constituted an important protection for tenants, such that “It is not to be taken lightly. Social landlords must ensure that from now on their systems are such that [mistakes] will not be made in future”.
This rule was only inserted into the Civil Procedure Rules in 2014 and the Court of Appeal commented that the insertion of it “addresses what might reasonably have been considered to be a weakness of the system, namely that there was no judicial scrutiny of the landlord's case that the conditions had been breached”.
The Court commented that the Civil Procedure Rule committee may need to consider whether an amendment should be made to form N325 to refer to the need to seek permission in cases of Suspended Possession Orders.
What does this mean for landlords?
This decision has the following consequences for landlords:
It is now necessary to seek the court’s permission prior to seeking a warrant.
This applies to all breaches of Suspended Possession Orders (including in relation to rent and anti-social behaviour). It does not however apply to an outright possession order.
The court has made it clear that landlords should ensure that their systems are such as to avoid procedural mistakes moving forward. The judgment is clear that an application is necessary so a misunderstanding or ignorance of the procedure is not now likely to be deemed a genuine mistake.
It is possible for applications to be made without notice but only time will tell whether the court expects this to be the norm or not.
There may now be little difference between a postponed possession order (which has always required an application back to court prior to the execution of a warrant) and a suspended possession order.
Applying for a warrant by using form N325 and not seeking the court’s permission will result in an invalid warrant and could result in a tenant applying to have the warrant set aside.
There could be cost sanctions for a landlord who applies for a warrant without first of all seeking the court’s permission.
The cost of seeking a warrant in these circumstances is now going to increase as landlords will have to prepare an application notice and pay the fee (currently £255.00) and potentially attend a hearing to have the application heard (although a request can be made for the matter to be dealt with on paper).
- It is likely to take even longer to obtain a warrant and the waiting times are already in the region of six weeks.
Please contact us if you have any questions or would like to see a copy of the judgment.
Author: Josephine Morton
Join the Housing and Regeneration team for the Wirral Coastal Walk
Friday 20th May 2016
The Housing and Regeneration team at Brabners are taking part in the Wirral Coastal Walk on Sunday 12 June in aid of our 2016 chosen charity Crisis.
Natalya Killen on 0151 600 3052 or by email to email@example.com
Author: Natalya Killen
Liverpool City Council v (1) NM, (2) WD (HB)  UKUT 0532 (AAC)
Tuesday 29th December 2015
We represented the Respondents (NM and WD), who were Riverside tenants, in this case. It was heard in the Upper Tribunal Administrative Appeals Tribunal (UT). The UT gave judgment on 24th September 2015.
The UT’s decision and its findings in this case are binding on all Local Authorities administering housing benefit and on First Tier Tribunals (FTT) dealing with housing benefit cases.
This case clarified the law with regard to the eligibility for housing benefit of service charges relating to the supply of water in communal areas in sheltered and supported housing schemes.
NM lived in supported accommodation and WD lived in sheltered accommodation. Both were claiming communal water charges through Housing Benefit. Liverpool City Council disallowed these claims and NM and WD appealed to the FTT. The FTT allowed their claims and Liverpool City Council appealed this decision to the UT.
The UT decision and the law as it now stands
- Subject to 4 below, communal water charges are eligible for housing benefit for residents of sheltered or supported housing.
- For the purpose of the Housing Benefits Regulations 2006 (the Regulations), ‘sheltered’ and ‘supported’ accommodation have the same meaning.
- In the absence of water meters, water charges are to be apportioned between communal and personal use by floor area. In a dwelling forming part of a larger self-contained unit (or scheme) where the tenant has use of communal areas in addition to their own room or flat, service charges in respect of personal water use (which are ineligible for housing benefit) will be calculated in accordance with Regulation 12B(5)(b) of the Regulations.
- Water charges relating to the provision of services that are ineligible for housing benefit are themselves ineligible for housing benefit. The only ineligible service involving water use identified by the UT in this case was for the communal laundry. Service charges relating to other communal water usage for communal cleaning, toilets and gardening were held to be eligible for housing benefit.
Considerations for Landlords
Where the water use in properties is not metered Landlords must use the approach set out in Regulation 12B(5)(b)that is summarised above. This requires careful and detailed calculation in line with the specifics of the Regulations and this case.
Brabners successfully represented the Respondents/Claimants in this case. If you are interested in finding out more about the approach to take when calculating the percentage of water charges that are housing benefit eligible please do not hesitate to contact Ian Alderson.
Author: Ian Alderson
The NHF Merger Code – What are the Key Principles?
Monday 30th November 2015
We note and welcome the impending publication of the NHF’s Merger Code and the first indications of the content of the same. The Code gives 10 key principles for Registered Provider (RP) boards to have regard to when considering a merger proposal. The principles focus on what is in the best interests of the RP, early and regular consideration of the proposals by the Board as a whole and ensuring that the Board has or has access to appropriate skills and experience. None of these principles should be a surprise to well-run Boards but they are a useful point of reference.
We would draw your attention to two of the tenets which merit further consideration:
- The fact that the Board as a whole should be aware of the proposals from the very start. We are aware of situations where proposed mergers have been rejected by certain board members on behalf of the RP without reference or reporting back to the Board and others where negotiations have been significantly advanced by certain board members before the remainder of the Board being aware of the proposals. Whilst we acknowledge that there is a need to maintain confidentiality, particular in early stages of the process, the starting point should be that this is a decision for the Board as a whole, not some only (or indeed the chief executive only).
- The focus on ensuring that the merger is in the best interests of the RP. There has been a fear within the sector that some mergers have been driven by personal agendas (such as the impending retirement of a chief executive) rather than what was in the best interests of the RP. We would also add that this focus should be applied at all stages throughout the process; just because the merger made sense at the start does not mean that it still is in the best interests of the RP later in the process, right up to the point of completion. Regard should be had to the results of due diligence, changes in or to do with the sector or specific issues concerning either of the proposed merger partners at all times and the Board should be prepared to decide against proceeding with the merger right up to the point of signature.
Publication of the Merger Code is expected over the coming weeks and we will report further once we have reviewed it.
If you have any queries concerning this article or the surrounding issues then please contact Ruper Gill.
Author: Rupert Gill
S.21 Notices – Don’t get caught out
Friday 30th October 2015
The Deregulation Act 2015 makes important changes to Notices Requiring Possession (“S.21 Notices”).
Tenancies commencing on or after 1st October 2015
There is now a new prescribed form for all S.21 Notices for assured shorthold tenancies (including starter tenancies) which commenced on or after 1st October 2015. A failure to use this prescribed form will render the notice invalid.
The notice can no longer be served within the first four months of the tenancy.
There is no longer a requirement for the notice to expire on the last day of the tenancy.
Registered Provider’s have to comply with additional requirements, including providing the tenant with energy performance and gas safety certificates.
Make sure you are familiar with the new rules to prevent claims for possession failing.
Tenancies commencing before 1st October 2015
The position on ‘old’ tenancies (i.e. tenancies which commenced before 1st October 2015) is less clear. The indication seems to be that the new rules do not apply but the new S.21 Housing Act 1988 doesn’t say this. However, the Regulations say that the new notice must be used for post-01.10.15 tenancies and can be used for pre-01.10.15 tenancies.
It will become compulsory after 1st October 2018 to use the new prescribed form for all assured shorthold tenancies.
It would therefore be a good idea to start using the new prescribed form for all tenancies now, to avoid using the wrong form in the future.
Good advice for pre-01.10.15 tenancies is to comply with both sets of rules (new and old S21) by:
- Not serving s21 Notices during the first 4 months of the tenancy;
- Ensuring that the expiry date is the last day of a period of a tenancy;
- Complying with the new time limits for starting proceedings; and
- Making sure that gas safety and energy efficiency certificates have been given to the tenant before the notice is served.
This is the safest option and avoids all possible challenges on pre-01.10.15 tenancies based on complying with the new or the old rules.
Author: Josephine Morton
Right to Buy - What we've learned from #NHF15
Thursday 24th September 2015
“We will extend the Right to Buy to tenants in Housing Associations…. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes” - Conservative manifesto 2015
Today, the government offered to water-down its plans to extend the Right to Buy to Housing Associations by way of legislation. Communities secretary Greg Clark set out an offer from housing associations to voluntarily introduce the extension. But, housing associations have until 5pm next Friday to decide whether or not to accept the NHF’s proposal.
The proposal will work so that associations must ‘absolutely ensure a right to buy’ to their tenants. By incorporating the policy by way of a voluntary code enforced by the regulator, associations will preserve the independence of their Boards (an independence that would be undermined by a compulsion to sell stock) whilst also securing flexibilities in its implementation:-
- Housing Association tenants living in a social or affordable rented home will have the right to purchase a home with Right to Buy level discounts, but, housing associations would have a discretion not to sell the particular home the tenant is living in special circumstances (eg. where the home is adapted for special needs tenants), in which case associations will give those tenants a ‘portable discount’ to buy an alternative home from either their own or another association’s stock.
- The Government would compensate the housing association at the full market value of the property, including repayment of the discount given to the tenant.
There are still huge questions:
- How will the discounts be funded?
- There will be a national commitment to replace each home sold on a one for one basis. Crucially, the type and location of the replacement will be flexible – associations can build a new house for social or affordable rent or shared ownership. This could mean big changes in associations’ stock profile.
- How about those charitable associations. They must comply with charity law and must fulfil their charitable objects. Would a voluntary code work here?
- How will funders deal with all housing association assets suddenly subject to the right to buy?
Nevertheless, it is a case of volunteer or be legislatively compelled on potentially more draconian terms. The NHF believe ‘that this offer is the very best possible compromise achievable for the sector’. Sovereign Housing Association agree and have already signed up. Great Places have announced they will ‘recommend this to [their] board for approval’.
The Housing Bill is due second week of October.
For more discussion on the RTB extension as well as other post-budget announcements http://www.northwesthousingconference.co.uk
Author: Bethan Williams
Chaplair Limited v Kumari  EWCA Civ798
Wednesday 29th July 2015
The Court of Appeal has dismissed an appeal by a tenant against a decision to aware a landlord its costs of proceedings before the First Tier Tribunal (Property Chamber) or the Leasehold Valuation Tribunal where there is a contractual provision for the tenant to pay the landlord’s costs under the terms of a lease.
It is a fairly common clause of a lease to allow a landlord to claim legal costs incurred in connection with proceedings under a Section 146 Law of Property Act 1925 Notice.
In this case, the landlord issued a claim for rent and service charge arrears in the County Court. The claim was allocated to the small claims track and was transferred to the LVT to be heard with other claims relating to other tenants.
The LVT refused to make a costs order in favour of the landlord.
The landlord then sought to recover its costs in the County Court (including costs relating to the proceedings before the LVT). The District Judge refused the costs order on the basis that the claim was allocated to the small claims track and following with the usual costs restrictions.
However, the High Court allowed an appeal by the landlord and awarded costs against the tenant under the terms of the lease (including a proportion of the costs of the proceedings before the LVT) on the basis that the lease provided a contractual provision to this effect.
The tenant was granted permission to appeal to the Court of Appeal challenging the decision for a costs order to be made bearing in mind that the LVT had refused to grant a costs order.
The appeal was dismissed. The civil procedure rules do not restrict a Court from awarding costs recoverable under a contract. The landlord was therefore entitled to the costs.
Author: Josephine Morton
National Housing Federation publish new model rules for registered societies
Monday 30th March 2015
At the end of last week the NHF published the latest version of their Model Rules for registered societies (formerly industrial and provident societies). These update the previous Model Rules published by the NHF in 2011. Whilst detailed commentary on the Rules is awaited, we have reviewed the same and set out below our initial thoughts and comments on the substantive changes.
- Much of the prescriptiveness within the 2011 Rules about what for example a Board or a Chair should do has been removed, presumably in anticipation of the supporting governance documents setting this out instead. This gives the advantage of flexibility but if these new Model Rules are adopted then care needs to be taken to ensure that appropriate terms of reference have been adopted.
- There have recently been a number of changes to the 2011 Model Rules that we were aware the HCA were requiring and we note that these have been incorporated into the new Model Rules.
- Amendments have been made to seek to comply with Disability Discrimination Laws as there was a concern that the obligation to cease to be a board member/shareholder as a result of mental health issues was discriminatory. There is a concern, however, about whether the replacement/alternative clause can be made to work in practice as it requires a GP or similar to give a written opinion about the ability of the individual to continue and it is unclear how that opinion might be obtained.
- The scope of the nine year rule for Board Members has been expanded to take into account any time spent on the board of another group member or a predecessor of the registered society (unless the board resolves otherwise). The obligation to stand down after nine years for at least one year before standing for re-election has been lengthened to three years. These reflect the hardening of this position in the Code of Governance albeit that we are seeing more associations stating that once the nine years have been served then one can never return.
These new Model Rules will not automatically apply to you without you formally adopting the same, nor is there any legal requirement for you to adopt the new Rules. Whether there is some merit in updating your existing Rules is something that we would happily discuss with you.
Author: Rupert Gill
Goodbye to the ASBI and ASBO
Tuesday 24th March 2015
It’s a whole new world for anti-social behaviour now that we have waved goodbye to the anti-social behaviour injunction (ASBI) and anti-social behaviour order (ASBO).
Part 1 of the Anti Social Behaviour Crime and Policing Act 2014 came into force on 23rd March 2015 introducing the new ‘Injunction’.
Some of the most important changes include:
- Injunctions are now available against minors aged 10-17 years (in the Youth Court).
- The perpetrator is called the ‘Respondent’ and the Claimant the ‘Applicant’.
- The terms of an Injunction can include positive requirements.
- There are requirements to consult (with the local youth offending team when the respondent is under 18 and with ‘any other body or individual the applicant thinks appropriate’ in all cases). This will not however apply on a without notice application.
Make sure on new applications that you refer to the new statutory provisions. It would be wise to have the provisions to hand for court appearances as you may need to guide the Court.
Author: Josephine Morton