Terms & Conditions

[Anonymous]

I have an appeal that I would like your views on please.

The claimant moved into the property in 1978 and was a council tenant until 4 July 1988 when she purchased the property under the Right To Buy scheme for approx £14,500. She took out a mortgage for the same amount. She was a leaseholder not a freeholder so I cant refuse her under former owner.

She was experiencing financial problems in 2005, owing the LA £5185.84 in service charges and was being threatened with county court proceedings. She also had personal debts of £10.5 k approx and was being threatened with legal action to recover the money.

A friend introduced her to a business man from Israel who was interested in buying properties in the UK to rent out. They agreed that she would transfer the property and the outstanding mortgage to him and in return he would charge her £175.00 per week rent and would take over responsibility for paying her service charges. She says the outstanding service charges were also transferred to him.

At the time of the transfer (4/5/06) she believes the market value of the property was approx £170,000 and she owed £17,000 on her mortgage, meaning she owed approx 9/10ths of the property outright and had equity of more than £150,000 in it.

I asked her what discussions she had with her ‘landlord’ concerning the transfer of the property to him and what legal papers did she sign to secure her interest in the property after she had transferred it to him. She replied that she did not sign any legal papers, as there was no interest for her to secure in the property, other than being allowed to stay on as a rent paying tenant.

I also asked her what consideration was given to the substantial equity that she had tied up in the property which she had given away. She stated that the equity was meaningless to her as she just wanted to remain in the property that she had lived in for most of her life.

I would be grateful for any thoughts anyone has on this.

[Kevin D]

Well, it’s maybe stating the obvious, but howabout starting with a land reg check?

Following that, if there is no other paperwork or evidence of the transaction(s), or indeed of the existence of the person(s) alleged to have been involved, the LA would be perfectly entitled to refuse HB/CTB on EITHER of the following:

1) HBR 86 is not satisfied. If the clmt states it is not physically possible to obtain info / evidence, that is not necessarily enough. The correct test is what is reasonably required (as in needed) by the LA in order to determine entitlement. See para 11 of [b:617cc01551]CH/4688/2003[/b:617cc01551].

In the alternative;

2) Draw inferences as follows:

a) there is no actual liability (HBR 8); or
b) the agreement is not on a commercial basis (HBR 9); or
c) the liablity has been created to take advantage etc (HBR 9); or
d) the clmt has actual capital; or
e) the clmt has notional capital.

The above is just set out to show the options that *may* be possible. Obviously, the evidence (or lack of it) will affect what inferences can ultimately be drawn.

Regards

[Anonymous]

Sorry if I didn’t make it clear (I’m new to this!). I did a Land Reg search already and it confirms the change of ownership.

The claimant was originally refused under 7 (1)(h) but I revised the decision upon appeal to Regs 6, 7(1)(a) and (l). I did think about deprivation of capital but she’s on IS. Was wondering what would be my strongest argument and do you know of any Commissioners Decisions which would help my case? I’ve already asked my legal dept. as to whether she retains an interest in the property but haven’t had a reply yet!

[Anonymous]

Long tenancy? Just a thought…

[Anonymous]

No, unfortunately her tenancy agreement is only for 24 months!

[lord smeagol]

In my view your strongest argument would be contrived, although this will probably turn out to be rather weak when it comes to ‘proving’ it. There is clearly something that doesn’t sit right here though, unless of course she genuinely has mental problems.

Why would she effectively give away £150k + with the stated reason of wanting to make sure she could continue to live in the property but accept a 2 year tenancy? after which she could be booted out anyway. That might be a useful opener 🙂

regards

Mike

[Author]

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