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Housing case law update - April 2021

Christopher Skinner, Rebecca Asady and Filip Bodnar round up the latest judgments of interest to housing associations and local authorities.

Mayor and Commonalty and Citizens of the City of London v Various Leaseholders of Great Arthur House [2021] EWCA Civ 431

Court of Appeal, 25 March 2021

The Court of Appeal has held that repairs to a residential building could not be included in the service charge if their effect was to make good a structural defect as well as remedying damage caused by those defects.

The local authority (“The City of London”) was the freehold owner of a residential building containing a number of flats. The leases were for 125-year terms and were originally granted pursuant to the Right to Buy provisions in the Housing Act 1980. Under the terms of the leases, the City of London would maintain the structure and exterior of the building, whilst the tenants would pay a service charge for a reasonable part of the costs of carrying out “specified repairs”. The covenants in the leases defined “specified repairs” as repairs carried out in order to keep the structure and exterior of the premises in repair...not amounting to the making good of structural defects”. The covenants also stated that the cost of making good structural defects could be recovered if the tenants were notified of the defects, or if the landlord had been unaware of them until “ten years after the grant”.

In 2016, the City of London began works on the building to address long-standing water penetration. It argued that they were works of “repair”, despite the fact that they also eradicated a defect that had existed since the construction of the block in the 1950s, and therefore the cost could be recovered from the tenants through the service charge. The City of London argued that where a defect had caused damage to the building, works to repair that damage did not cease to be works of repair merely because they simultaneously eradicated the structural defect. The First-tier Tribunal ruled in favour of the tenants, so the City of London appealed. The Upper Tribunal dismissed the appeal, finding that the works would not be “specified repairs” if their effect was to make good a structural defect, even if that defect had caused damage which the works remedied. The City of London appealed.

The Court of Appeal, in dismissing the appeal, agreed with the Upper Tribunal that it is necessary to consider the effect of the works. It held that according to the terms of the leases, the tenants were not liable to contribute to the cost of carrying out the works to the structure and exterior of their building.

A copy of the judgment is here.

Ngnoguem v Milton Keynes Council [2021] EWCA Civ 396

Court of Appeal, 19 March 2021

The Court of Appeal has confirmed that if a local authority makes a homelessness review decision out of time, that decision is still valid.

Ms Ngnoguem, who was a victim of domestic violence, applied to Milton Keynes Council for housing assistance under the Housing Act 1996. Milton Keynes Council issued its section 184 decision and the application was successful. She wanted to return to live permanently in London and requested, out of time, a review of that decision under section 202 of the Housing Act 1996. The review decision was issued four days late. Ms Ngnoguem subsequently issued an appeal against (1) the section 184 decision, and then (2) the section 202 review decision, arguing that it had no effect because it was issued out of time.

The County Court dismissed both appeals, ruling that the review decision, despite being issued late, overtook the section 184 decision. Ms Ngnoguem appealed to the Court of Appeal, arguing that section 204(1)(b) of the Housing Act 1996 gave an applicant who had requested a review decision a right of appeal to the County Court against a section 184 decision if the review decision was issued outside the time limit.

The Court of Appeal, in dismissing the appeal, held that a review decision under section 202 of the Housing Act 1996 supersedes a section 184 decision and becomes the “proper target for any challenge” under section 204, irrespective of whether it was issued late and whether a challenge to a section 184 decision was ongoing.

Local authorities should ensure that they should notify homeless applicants if their review decision is likely to be issued out of time, as this will reduce the likelihood of an appeal.

A copy of the judgment is here.

R. (on the application of Imam) v Croydon LBC (No.2) [2021] EWHC 739 (Admin)

High Court, 26 March 2021

The High Court has held that a disabled claimant was not entitled to a mandatory order requiring a local authority to provide her with suitable accommodation due to a lack of evidence regarding her conditions at the property.

The Claimant (“R”) was a single mother and a wheelchair-user, and was disabled within the meaning of the Equality Act 2010. In February 2014, she applied to her local authority, Croydon London Borough Council, for accommodation and was provided with temporary accommodation under the Housing Act 1996. She was also added to the waiting list for permanent accommodation and was placed in priority Band 3. The accommodation was unsuitable, as it had not been sufficiently adapted for a wheelchair user, and Croydon London Borough Council admitted that it was in breach of its statutory duty under the Housing Act 1996. R applied for a mandatory injunction requiring Croydon London Borough Council to provide suitable accommodation.

The High Court, in granting her application in part, held that although Croydon London Borough Council was in breach of its statutory duty, she was not entitled to a mandatory order requiring it to provide her with suitable accommodation as there was insufficient evidence regarding how her living conditions at the property had impacted upon her. She had not established that her living conditions were having an extremely serious effect on her, or that the situation was “intolerable”. Croydon London Borough Council had not breached its duty to make reasonable adjustments for a disabled person, although it had unlawfully failed to consider her request to move her from priority Band 3 to priority Band 1 under its housing policy.

A copy of the judgment is here.

Ibrahim v London Borough of Haringey & Anor [2021] EWHC 731 (QB)

High Court, 30 March 2021

The High Court has ruled in in favour of a former rough sleeper, finding that there had been a breach of procedural fairness when dealing with his claim.

The Claimant (“Mr Ibrahim”) was a homeless foreign national who had been a rough sleeper in London. He approached the London Borough of Haringey in order to seek accommodation. He was provided with a self-contained flat and signed an agreement, but several days later was informed that a mistake had been made and that he had to move to a hotel that day, without any notice. Mr Ibrahim contested this, arguing that he had a secure tenancy or licence, and that London Borough of Haringey’s subsequent attempts to evict him were unlawful. He sought damages, declarations and injunctive relief. An interim injunction was granted, preventing the eviction whilst his claim that he was a secure tenant or licensee was pending.

The County Court held that there was no tenancy or licence because no legal relationship existed between the two parties. The London Borough of Haringey was still offering to provide Mr Ibrahim with temporary accommodation in a hotel. Consequently the injunction was discharged and the claim was dismissed. Mr Ibrahim appealed.

The High Court allowed the appeal. It held that when the County Court decided on the application for an interim injunction to prohibit Mr Ibrahim’s eviction, the County Court had erred in finding that the parties had had no intention to create legal relations when the accommodation was provided. The County Court’s finding had disposed of the entire substantive claim in a way that was procedurally unfair to Mr Ibrahim.

A copy of the judgment is here.

Kensquare Ltd v Boakye [2020] UKUT 359 (LC)  

Upper Tribunal (Lands Chamber),18 December 2020

The Upper Tribunal (Lands Chamber) has held that the legal costs incurred in judicial proceedings by a landlord are recoverable from the tenant as an administration charge under the terms of the lease.

The tenant (Ms Boakye) was a shareholder in the management company (Kensquare Ltd) and held a 125-year lease on a flat in one of its properties. In 2017, Kensquare Ltd successfully applied to the First-tier Tribunal for a determination that interim service charges for the years 2011 to 2017 were payable by Ms Boakye. However, she still refused used to pay and Kensquare Ltd served her with a section 146 notice. Ms Boakye‘s mortgagee subsequently paid the amount in full.

In 2019, Kensquare Ltd went back to the First-tier Tribunal to determine that the interim service charges demanded for the years 2018 to 2020, and the legal cost incurred from the aforementioned 2017 hearing, were reasonable and payable. The First-tier Tribunal found that Ms Boakye’s lease stipulated that she was required to pay (1) an interim service charge of £360 per year (unless Kensquare Ltd served a notice that this amount was to be increased) and (2) the costs incurred by Kensquare when preparing and serving the section 146 notice. However, the Tribunal held that (1) Ms Boakye was not liable to pay more than £360 because Kensquare Ltd had not served a notice revising the figure, and that (2) the legal charges were not recoverable. Kensquare appealed, arguing that the lease did not require a separate notice each year.

The Upper Tribunal, in allowing the appeal, held that (1) Kensquare Ltd had complied with the lease and that the interim service charges for the years 2018 to 2020 were therefore payable as demanded, (2) the costs of the 2017 proceedings for the purpose of serving the section 146 notice were recoverable, and (3) the legal costs for both the 2017 and 2019 proceedings were incurred in connection with the management of the building and were therefore recoverable.

The ruling will be welcomed by landlords, as the Tribunal has shown that legal costs incurred under the management of the building are recoverable.

A copy of the judgment is here.

Christopher Skinner is a partner, Rebecca Asady is a consultant and Filip Bodnar is a solicitor at Capsticks.

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