Terms & Conditions

[Anonymous]

I should probably know the answer to this but have got myself in a pickle.

Okay here’s the senario:

Rent was referred to the rent service in August 2005.

In December 2005 the claimant notified the Local Authority that her rent had in fact increased back in July 05 – prior to the rent officer referral.

So where does this leave the claimant – I can see two possible interpretations:

Request a substitute decision and – assuming the decision comes back higher – take the increased eligible rent into account from the Monday following the date of notification of the rent increase.

Or alternatively should we treat the rent increase as taking effect from the monday following the date of notification. Therefore, since effectively we are dealing with a situation where the rent has increased since the last decision – in december – we would not be able to refer the rent to the rent service until 52 weeks from the last referral has lapsed.

The latter option seems rather mean, since if we were dealing with a late notified housing association rent increase we would take it into account from the monday following the date of notification. Whereas if a private tenant notifies late of a rent increase (that would otherwise have been taken into account when the rent was referred if notified on time) they will continue to be penalised until the rent is due for re-referral.

I hope that’s not a total load of gibberish and if anyone could shed any light (and point me in the direction of the relevant regs) I’d be most grateful.

[JamesPickering]

I am going to give my very humble opinion but assume that the rent officer hasn’t already restricted the rent as significantly high in his August 05 decision and also that the claimant hasn’t shown good cause for not informing us within 1 month.

I would refer the contractual rent increase from July 05 and then assuming it comes back higher) apply the decision from December 05.

As far as I am aware (and I must confess to a history of being spectaularly wrong about this sort of thing in the past…) the 52 week referral rules are still overidden by the LA’s duty to refer contractual rent increases, changes in the number of occupiers etc.

Hope this backs up what you were thinking,

J

[Anonymous]

Thanks J,

I feel bad now as I have already opted for the mean decision 😳

My thinking is that the DAR regs provide that we treat the rent increase as occuring on the date it is notified and it cannot therefore be the subject of a substitute referral on the same basis that a rent increase that did in fact occur after the referral could not be taken into account.

Just to clarify, my understanding is that a rent increase could only be referred before the rent was due to be re-referred if the rent increase was provided for in the original tenancy that was in force prior to the ROR (is this what you mean by contracual rent increase?) – which is not the case in the claim I’m dealing with.

I’ve turned down the DHP too as the rent is due to be re-referred next month and we’ve sent the claimant countless DHP applications, none of which have been returned until now.

[Anonymous]

Charlie, I assume you made a decision some time around August 2005, perhaps early September, which adopted the latest RO valuation? Apart from a week or two before then, when the previous HB decision was still in force, most of the HB paid since then has been under the new decision.

I think the D&A issue here is whether that decision can be revised. As I see it the possibilities are:

1. Treat the late rent increase notification as being, in substance, an application for revision out of time and consider whether to accept it (doesn’t sound like you will) – Reg 4(1)(a)(ii)
2. Consider revision for ignorance of a material fact, on the basis that you didn’t know about the rent increase at the time when you made your decision. Assuming the revision is advantageous (see below) that seems to be a non-starter because the new rent did not come to your attention within a calendar month of the decision – Reg 4(1)(b) or, possibly but not likely, Reg 4(2)(b)
3. Ask for a substitute determination and revise accordingly – there is no obvious time limit. – Reg 4(3)

If you go with 1. or 2. the correct action is a superseding decision from the start of the week in which you heard about the rent increase (not the following week) – see Reg 8(4).

OPtion 3 is an interesting one and I am not sure that the D&A Regs has a clear mechanism to penalise late reporting where an RO valuation is engaged. I see nothing in Reg 4 that makes para (3) dependant on or subordinate to para (1): quite the opposite, para (3) begins with the words “notwithstanding the provisions in paragraph 1…” That seems to me to be saying that time limit considerations do not apply to substitute determinations.

I do not think that the deeming fiction of Reg 8(3) (treating the rent as if it increased in December) is relevant when you are considering whether to revise a decision: Reg 8(3) only applies when you are making a superseding decision on the change of circumstance ground, and in this case you clearly cannot be doing that because there has been no change of circumstance since your August decision. You only “pretend” the rent increased in December for the limited purpose of fixing the effective date of a Reg 7(2)(a) supersession, and I don’t see how a Reg 7(2)(a) supersession could get off first base in your case.

A further complicating factor is that you do not know until after you have a new RO vaulation whether the revision would be advantageous or not … and once you have the substitute determination, you kind of have to revise under Reg 4 if it comes back higher, because Reg 4 does not contain any time limit for revision on that particular ground (indeed, it seems to make itself expressly exempt from any time limits).

So I am going with substitute determination and revision or, in the unlikely even it comes back lower, supersession from the date of the new valuation.

Any alternative ideas?

[Anonymous]

Thanks Peter,

I had considered that option, but I was thinking that unless there were grounds for requesting a substitute decision, Reg 4(3) wasn’t engaged.

My view was that since the referral was correct on the basis of the information we had at the time there was no ‘error’ warranting a re-referral. If it had been intended that a substitute decision could be requested in these circumstances, the regulations would have been phrased in terms of permitting a substitute decision where a referral had been made in ignorance of a material fact.

What do you think?

[JamesPickering]

I am easily swayed by all arguments so far however, Schedule 2 states that a claim should be referred to the “where there has been a rent increase under the terms of the tenancy…”

If the increase was notified within 1 calendar month we would refer to the RO and apply from the week of the rent increase. However, because you were not notified the date of the rent increase for our purposes becomes December 05 and determines the effective date of the RO decision.

I do not think a substitute referral applies as in August 05 the information supplied was correct.

I therefore think the claim should have been referred to the RO in December 05 when notified of the rent increase and I would therefore supersede from December 05.

[chrisb]

My thought process in a similar case has been:

1) a substitute referral is necessary, as original referral contained “an error in the terms of the tenancy”, HBR17

2) the original decision was made in ignorance of a material fact (the correct rent being charged, but cannot be revised as this information was not obtained within one month of the notification. DAR4

3) this means that the only thing which can be done is supersession, so the new decision should be applied from the Monday of the week you are told of the rent increase. DAR8(4)

[Anonymous]

I like the sound of Chris’s inyterpretation of Reg 17: an “error” relating to the terms of the tenancy simply means that the information referred was not correct – I don’t think it means that the error has to be the fault of the Council making the referral. I think it means that the details referred were in some way corrupt.

In this case it was the claimant’s fault. And so you would think that the claimant would be penalised by the D&A Regs: you would expect revision to be impossible in these circumstances, with supersession from the week the information came to light being the only alternative. But the problem is, if you have got a substitute determination, that is your ground for revision and it does not carry the same time limit as revision following a claimant’s application or revision to put right an irregularity in the material facts. It is a separate ground for revision, not an adjunct to claimant’s app and material facts.

To jpickering: what you say there is correct when you are making a superseding decision under Reg 7(2)(a) & 8(3) on the ground that there has been a change of circumstance. But I don’t think that’s what we are doing here – we are looking at the possibility of revising the decision made in August. The mechanism of treating the rent increase as if it happened in December does not apply to revision, and it doesn’t apply to supersession under D&A Reg 7(2)(b) & 8(4). Reg 8(4) penalises the claimant for late reporting, but only where it has not been possible to revise under Reg 4(1)(a) or (b). If you can revise under Reg 4(3), you don’t need to worry about supersession from a later date. And if you are going to get a substitute redetermination, I don’t see how you can avoid revision under Reg 4(3).

[JamesPickering]

Peter,

I agree with you that we are trying to revise the RO decision made in August 05 by sending a substitute referral to the RO, however, as you have said I read reg 17 the same as you and to me it seems that an LA can request a substitute if the referral sent in August 05 was incorrect based on a error made by the LA.

But I do not think that the LA has made an error in this case on the referral as the claimant has a duty to report the change of circumstances i.e. his rent increase so the referral to the RO by the LA was correct.

So even though a material fact is wrong on the referral, the referral is still correct and the option of revision is removed because of this.

[Anonymous]

Bring on LHA I say!

I think I may be persuaded by a mix of the above approaches – “an error” as to the terms of the tenancy constituting grounds for a substitute referral.

But if we do a substitute referral, I think we’d have to follow Reg 4(3) and revise the decision applying the last ROD, unless this can be considered to be qualified in some way by the Reg 8(3).

Perhaps the ROD and the rent increased could be considered as seperate changes in circs. The ROD could be applied from Aug 05 – but the rent increase from the Monday of the week it was notified – thereby capping the amount that is paid. Are we obliged to award the full sum agreed by the rent service?

jpickering,

Reading the analysis in CPAG “rent increase under the terms of the tenancy” only applies where the rent increase was provided for by a term of the tenancy in place when the last referral was made – my understanding is that such a term would be something along the lines of “the rental liability shall be increased to X on such and such a date” – there was no such provision in the tenancy agreement so I don’t think this provision applies.

[JamesPickering]

Charlie,

I think that’s a great plan – wait for LHA then pay it all plus an extra £15.00 on top 😀

I still feel it should go from December but I am not sure on whether you are obliged to apply the full RO decision, I believe there was a thread about that not long ago though.

With regard to the rent increases, all tenancies under the Housing Act 1988 have a clause under sections 13 or maybe 14 which allows a landlord to increase the rent once every 12 months. Therefore to me that seems contractual if the tenancy falls under the Act (which most do especially my personal one 👿

[Author]

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