Housing Management Update: August 2013

Housing Management Update: August 2013


Author: Bukola Aremu

'Bedroom tax' beginning to bite: On 1 April 2013, the cap on the amount of benefits people can receive took effect across England, Scotland and Wales.

It will be fully implemented by 30 September 2013.

Although many of the benefits that count towards the cap do not directly affect social landlords, there is one we are constantly being asked to advise on and the impact it has on rent income - the so-called 'bedroom tax'.

This under-occupation penalty has seen cuts to the housing benefit of social housing tenants of working age and with more than one or two spare rooms in their home.

Housing associations across the UK, large and small, have reported a number of tenants falling behind with payments, and expect more to fall into arrears when further reforms come into effect later in the year.

This will ultimately put strain on the finances of social landlords, resulting in less money being available for:
. redevelopment - fewer affordable homes
. maintenance services - more disrepair claims
. new development projects

If social landlords are receiving less money from rents and using more resources to manage and mitigate the affects of welfare reform, it is inevitable they will find it much harder to carry out the above, which is by no means an exhaustive list.

And there has been a steady increase in Discretionary Housing Payments, and many social landlords continue to help tenants find smaller properties and provide welfare advice.

Cash running out, tenants don't want to move, arrears increasing
In this scenario, we suspect there will be greater use of the frowned upon Ground 8 Housing Act 1988.

There is an agreed assumption among housing law practitioners - and a lively debate within housing associations - that social landlords will use Ground 8 more often with a view to evicting tenants who have high rent arrears.

Ground 8 Schedule 2 Housing Act 1988 is a mandatory ground for possession, which prevents the court from exercising its discretion based on the circumstances of the case.

Before instigating proceedings under Ground 8, a landlord need only ensure that the assured/assured shorthold tenant is in at least eight weeks' rent arrears or more at the time the notice is served and at which proceedings are issued.

If those requirements are met, a possession order will be granted to the landlord by the court, and a request for a warrant to evict the tenant can made immediately thereafter.

What does this mean?
In the battle to defend housing associations' income, Ground 8 will be used more than ever, despite the Housing Corporation's historical restriction of its use.

We suggest Ground 8 is not necessarily the only option; you must always pursue reasonable alternatives such as Ground 10 and 11 HA 1988, and you must continue to comply with your internal policies.

These policies must be under continuous review so that any action you take does not fall outside your own guidelines, as legal arguments are likely to centre on whether the landlord has complied with its own policies and procedures.

If you are considering bringing proceedings under Ground 8, be sure to check the tenancy agreement to ensure it does not prohibit the use of Ground 8, and follow the rent arrears pre-action protocol as best as you can to avoid challenges brought by the tenant.

One thing to bear in mind is that should housing associations begin to rely increasingly on Ground 8, we will most certainly see more public law defences - challenges under the Human Rights Act 1998 - and therefore more 'Pinnock'-like cases.