Excessively High Rent

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  • #34367
    Anonymous
    Guest

    Morning All

    I have had a query that i would like opinion on if any of you have come across it before. This is the first of its kind at our LA but i expect there would be more.

    Landlord has wrote to tenant to explain that Assured Shorthold tenancy expired in December 2006 and has been running periodically from that point on. The rent was £90 per week.

    The landlord has given them on week without a rent charge and then increased the rent to £256.74 per week, matching the 5-bed LHA rate exactly !!

    Letter issued: 15/09/08
    Rent Free Week: 15/09/08
    New Liability: 22/09/08

    Is there any advice you have given claimant’s about this. My thoughts are as follows:

    1. The claimant has not been given 4 weeks notice to terminate agreement
    2. Can a tenancy agreement be terminated in this manner without sufficient reason
    3. Can the LA consider this an excessively high rent, no change to property, except landlord has stated will “improve bathroom” once new rent charged

    #96552
    Kevin D
    Participant

    The only (legal) issue between the tenant and the L/L is whether or not sufficient notice period has been given for the rent increase. If so, the only options that spring to mind are non-comm (weak) or taking advantage (stronger, but not easy to argue).

    #50517
    Anonymous
    Guest

    After giving it more thought, i am considering the not commercial / contrived route on this one.

    Both could become quite weak arguments because our own regulations are going to tie us in knots but possibly worthy of taking to the Appeals Service.

    I will keep looking at this, a 185% rent increase does seem excessive !!

    #50518
    Anonymous
    Guest

    I think one month’s notice would have been required so you could possibly argue that the new liability is not legally enforceable – this is made difficult where the tenant has basically agreed to the new rent. I don’t see how this arrangement could be non-commercial – it seems very commercial to me! I think use of Reg 9 is a bit severe in this type of situation, at the very least you should continue to pay based on the original rent.

    I’ve recently sent an appeal submission to TTS arguing that the new liability was not legally enforceable (in my case no notice was given at all – the rent was increased retrospectively), and as an alternative the rent was unreasonably high to be met by HB so the cap rent could be restricted under 12B(6). I’m not entirely sure if LHA cases can be restricted under 12B(6) and I know there are some differing opinions on these boards so I’m looking forward to see what the chairman has to say on that issue.

    #96553
    andyrichards
    Participant

    The landlord is increasing the rent to the amount which the Rent Service says is the prevailing amount for properties of this size in this locality. How is that not a “commercial” decision? Just a thought…….

    #96554
    Anonymous
    Guest

    M Wigg
    [quote:4aef468da8]I’m not entirely sure if LHA cases can be restricted under 12B(6) and I know there are some differing opinions on these boards so I’m looking forward to see what the chairman has to say on that issue.[/quote:4aef468da8]

    I know that I’m in a minority here, but it would be good to get a ruling on this if possible. Hope you will post the result, plus any relevant comments from chair. 8)

    #96555
    Anonymous
    Guest

    [quote:b914bd09f0=”andyrichards”]The landlord is increasing the rent to the amount which the Rent Service says is the prevailing amount for properties of this size in this locality. How is that not a “commercial” decision? Just a thought…….[/quote:b914bd09f0]

    This is true, i suppose it can be seen as commercial but in this instance even a small change of the non-dep moving out would then create a shortfall of around £70 per week that the claimant may not be able to afford.

    It would appear contrived to take advantage of the scheme but the argument against that is that the LHA room rate is set based on the properties in that locality.

    Would the landlord increase the rent by this percentage if the tenant was not receiving HB payments

    #96556
    Trevor Kenward
    Participant

    Looks like you will have a tenant here who will never come off benefits or that if he does he will be evicted in favour of an IS claimant with a large family. Not quite the Governments intention me thinks ❗

    #96557
    Anonymous
    Guest

    [quote:c383b79b0c=”Trevor Kenward”]Looks like you will have a tenant here who will never come off benefits or that if he does he will be evicted in favour of an IS claimant with a large family. Not quite the Governments intention me thinks :!:[/quote:c383b79b0c]

    My thoughts exactly, a case to be passed across to our landlord accreditation officer!!

    I have come to a decision as follows:
    Cancel claim from date liability ends due to 1 week without a charge. Invite new claim when liability re-starts. Award claim using £90 p/w as rent, giving claimant this plus £15 top-up.

    Refuse new agreement amounts as they are contrived & excessively high (some more research to be done on this) and give claimant appeal rights.

    Await appeal to submit to T.A.S

    #96558
    seanosul
    Participant

    I am assuming that the property is 5 bed? In which case it seems to me that the rent charged was initially too low. An increase in the level of rent charged to levels more akin to that for similar properties, as confirmed and advertised by the Local Authority and the Rent Service can not therefore be considered unreasonably high.

    There is an issue over required levels of notice and whether the rent increase is lawful, however if the liability is weekly and not monthly then the notice may well have been sufficient.

    #96559
    Anonymous
    Guest

    I’m no expert on housing law, but:

    [quote:9a70a63357]Housing Act 1988
    13 Increases of rent under assured periodic tenancies

    (1) This section applies to—
    (a) a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part I of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and
    (b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period.

    (2) For the purpose of securing an increase in the rent under a tenancy to which this section applies, the landlord may serve on the tenant a notice in the prescribed form proposing a new rent to take effect at the beginning of a new period of the tenancy specified in the notice, being a period beginning not earlier than—
    (a) the minimum period after the date of the service of the notice; and
    (b) except in the case of a statutory periodic tenancy, the first anniversary of the date on which the first period of the tenancy began; and
    (c) if the rent under the tenancy has previously been increased by virtue of a notice under this subsection or a determination under section 14 below, the first anniversary of the date on which the increased rent took effect.

    (3) [b:9a70a63357]The minimum period referred to in subsection (2) above is[/b:9a70a63357]—
    (a) in the case of a yearly tenancy, six months;
    (b) [b:9a70a63357]in the case of a tenancy where the period is less than a month, one month;[/b:9a70a63357] and
    (c) in any other case, a period equal to the period of the tenancy. [/quote:9a70a63357]

    It seems to me that one week’s notice would not be sufficient, even for a weekly tenancy.

    #96560
    Anonymous
    Guest

    [quote:f5f4507e6a=”mwigg1″]I’m no expert on housing law, but:

    [quote:f5f4507e6a]Housing Act 1988
    13 Increases of rent under assured periodic tenancies

    (1) This section applies to—
    (a) a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part I of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and
    (b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period.

    (2) For the purpose of securing an increase in the rent under a tenancy to which this section applies, the landlord may serve on the tenant a notice in the prescribed form proposing a new rent to take effect at the beginning of a new period of the tenancy specified in the notice, being a period beginning not earlier than—
    (a) the minimum period after the date of the service of the notice; and
    (b) except in the case of a statutory periodic tenancy, the first anniversary of the date on which the first period of the tenancy began; and
    (c) if the rent under the tenancy has previously been increased by virtue of a notice under this subsection or a determination under section 14 below, the first anniversary of the date on which the increased rent took effect.

    (3) [b:f5f4507e6a]The minimum period referred to in subsection (2) above is[/b:f5f4507e6a]—
    (a) in the case of a yearly tenancy, six months;
    (b) [b:f5f4507e6a]in the case of a tenancy where the period is less than a month, one month;[/b:f5f4507e6a] and
    (c) in any other case, a period equal to the period of the tenancy. [/quote:f5f4507e6a]

    It seems to me that one week’s notice would not be sufficient, even for a weekly tenancy.[/quote:f5f4507e6a]

    Thanks for this, i am awaiting a call from the landlord to discuss, i will cover this in the conversation.

    [quote:f5f4507e6a=”seanosul”]I am assuming that the property is 5 bed? In which case it seems to me that the rent charged was initially too low. An increase in the level of rent charged to levels more akin to that for similar properties, as confirmed and advertised by the Local Authority and the Rent Service can not therefore be considered unreasonably high.

    There is an issue over required levels of notice and whether the rent increase is lawful, however if the liability is weekly and not monthly then the notice may well have been sufficient.[/quote:f5f4507e6a]

    The property is only a 4 bedroom property but the household would receive a 5 bed rate.

    To confirm, the rent of £90 per week that i put above is actually £390 pcm. The new rent is £254.76 per week, so they have changed the frequency of the rent too.

    #96561
    Chris Robbins
    Participant

    Just come back from leave and have seen this post for the first time. I am currently dealing with an appeal on precisely this scenario. We had a claimant whose rent was £135.00 per week and under the old rules she was awarded HB based on a CRR of £110.00.
    Landlord (allegedly) terminated tenancy on the grounds of rent arrears, but then let her move back in 9 days later when she managed to clear £900 rent arrears. Gave her a new agreement with a rent of £1000 per month. Under LHA she gets the 5 bedroom rate which was about £206 per week.
    We sought advice from Adelphi on whether or not they thought Reg 12(B)(6) was in play in this scenario. I reproduce the response I got which indicates they do think it applies to LHA cases.

    “As you are aware, local authorities are required to determine questions of fact and law in individual cases as part of their overall responsibility for the day‑to‑day administration of the Housing Benefit and Council Tax Benefit schemes, taking account of relevant caselaw and consulting their own advisors where appropriate. This Department can only give general advice and guidance on the interpretation of the law. You should bear in mind that my comments are based on the information you have provided in your email and might not apply in different circumstances. However, I hope you will find them helpful.

    New Regulation 12B(6) allows a local authority to restrict the eligible rent if it feels that the rent is greater than it is reasonable to meet by way of housing benefit.

    HB Reg 12B(6) can be applied to the cap rent as it is made subject to it through the definition of the cap rent in HB Reg 13D(12) being made subject to HB Reg 12B(6). HB Reg 12B(1) determines by which route the eligible rent is to be determined. However, there is nothing here to prevent the definition of the cap rent in HB Reg 13D(12) being subject to HB Reg 12B(6).

    This is a broad provision that would allow you to make a restriction on the rent to what you think is more appropriate. However, a problem arises because you would have to make a valid argument for restricting the rent when the rent officer has determined the appropriate LHA rate for an area. Without a valid argument you would be unable to make any restrictions under this regulation.

    The policy intention behind this regulation is that is should be used in exceptional cases for example, where a private landlord is providing supported accommodation but the support element of the rent is already being paid by the county council. I such cases, you could reasonably make the decision that the rent including the support element is greater than it is reasonable to meet by way of housing benefit and you could therefore reduce the cap rent by the support element.

    We are aware that some local authorities are using this regulation to restrict the eligible rent where a landlord appears to have engineered an increase in rent in order to take advantage of the benefit rules. It has also been used where families, entitled to a larger property LHA rate, have been accommodated in a smaller property but still been charged rent up to their personal LHA entitlement. As ever, such decisions are a matter for local interpretation and may be subject to appeal.

    I’ve also attached a Commissioner’s Decision which you may find helpful when making your decision.

    I hope this is of some help but please let me know if you need anything further.

    Regards

    Richard Metcalfe

    DWP Housing Benefit Strategy Division”

    #96562
    Anonymous
    Guest

    I think a better use of Reg 12B(6) in an LHA case would be where the LHA for the BRMA far exceeds what used to be the CRR in pockets of sub-standard accommodation.

    For example, a house in a cheap, run-down street previously attracted a CRR of, say, £100 a week – actually less than the LRR of £120. Now the LHA is £250. That might be a suitable candidate for Reg 12B(6).

    It’s funny isn’t it that the effect Councils most feared about a year ago was that the LHA would drag down eligible rents in all but the grottiest neighbourhoods and put the nice areas off limits to claimants. Most of us suspected that to some extent that was the policy intention – bigger BRMAs would act to suppress the average. But what seems to have happened predominantly is the exact opposite: extremely high rents in small pockets of exclusive accommodation have dragged up the LHA everywhere else, which means that rents far in excess of the highly localised market rent are being increased to the LHA for the wider area.

    Careful what you wish for!

    #96563
    seanosul
    Participant

    Which Commissioners decision Chris?

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