A fresh alternative Home | News & events | Legal updates | Former tenancy arrears cannot be used as reason for refusing consent to mutual exchange

Former tenancy arrears cannot be used as reason for refusing consent to mutual exchange

10 February 2010

In the case of R (McIntyre) v Gentoo Group Limited [2010], the High Court has held a registered social landlord's decision to impose a condition requiring a tenant to pay former tenancy arrears before it would consent to a mutual exchange was unlawful.

Facts
In 1984 the McIntyre's, who were married, were granted a secure tenancy of a property owned by a local authority (LA). The couple temporarily seperated in 1996, and the husband went to live in another property owned by the same LA.

In 1998, the LA obtained a judgment against him for rent arrears and costs in repsect of that property, but it was not enforced. The husband subsequently went back to live with his wife.

In 2001, both were transferred to Gentoo as part of a Large Scale Voluntray Transfer (LSVT). In addition, the benefit of all possession orders, rent arrears and money judgments were also assigned to Gentoo. 

It was an express term of the McIntyre's assured tenancy agreement that they could exchange their property with another of the Gentoo's tenants provided Gentoo gave written consent.

In 2007, the McIntyre's  applied for Gentoo's consent to undertake a mutual exchange. Initially this was refused due to the husband's unpaid judgment debt. Consent was subsequently given, however, on condition the debt was paid. 

The McIntyre's applied for a judicial review on the ground that the conditional consent was susceptible to judicial review following the Court of Appeal's decision in the R (Weaver) v London and Quadrant Housing Trust [2009].  

Decision
The High Court decided that the matter could be the subject of a judicial review as the decision had been made as part of Gentoo's public function for managing and allocating social housing.

In particular, the High Court noted that paragraph 2, section 1 of the Landlord & Tenant Act 1988 applied to the tenancy agreement: it states that a landlord may not impose unreasonable conditions when granting consent to an assignment.

Any condition imposed by a landlord has to be connected to the subject matter of the contract. Given that the former tenancy arrears, and the condition for an exchange to take place, did not relate to the property, which was the subject of the mutual exchange, Gentoo had acted unreasonably. 

The High Court did not, however, think it was appropriate to grant relief by judicial review as the McIntyre's had an alternative private law remedy against Gentoo for breach of the Act: under their tenancy agreement the McIntyre's could bring a claim for breach of contract as the condition imposed was unreasonable. Save in the most exceptional circumstances, judicial review is a remedy of last resort.

Going forward
You should ensure that any conditions imposed in response to a request to carry out a mutual exchange are reasonable and relate to the property in question in order to avoid challenge.

© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.

Are any of the issues in this article giving you a headache? If so, we want to know

Name *

Comments*

The information you provide here will be used solely for the purposes of responding to your query for more information see our privacy policy.
 

Get in touch

Liz Hargreaves

Associate
T: 03700 86 4059
I: +44 (0)121 625 4059
E: liz.hargreaves@shoosmiths.co.uk