New REG 9 prev owner/deed of trust/ transferred ownership

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    Jacqui Fowler

    I have an appeal the scenario is this:

    We received a claim for HB from a Mr A.
    He purchased his council house in May 2002. T
    he land registry shows Restriction added (deed of trust dated 17.3.04 added to land registrty details .
    The he property was transferred to Mr B (his brother on) 18 October 2005) after the period for paying back the discount had expired.
    Mr A wants to claim HB but has been refused on grounds that Reg 9 1(h) applies.
    He said although he bought the property his brother paid cash for it. The intention was that he would then pay his brother the interest and eventualy the capital back. He said a deed of trust has exisited since the purchase but we have not yet got evidence of this. His brother is now charging rent!! from 1 Jan 2006 and a tenancy agreement has been drawn up. The brother said he cannot afford to let MR A stay in the property without paying rent because his circumstances have changed.

    Mr A has not provided evidence to satisfy us tht he could not have continued to live in the property without relinquishing ownership, although it is known that he had an accident at work and wnet onto Incap in Jan 04. He also said he trasferred ownership because he could no longer adhere to his end of the agreement with his brother because he was not working.
    He has no evidence of the money the interest he paid his brother (said he paid cash) no receipts.
    Comments would be appreciated.

    I have asked for sight of the deed of trust

    Kevin D

    In the absence of sufficient evidence, the LA would be perfectly within its rights to decide that there was insufficient evidence / info to assess a claim. Alternatively, the LA could draw an adverse inference.

    Even if all payments were by cash (unlikely, I suggest), it seems reasonable to expect that such cash would be withdrawn from Mr A’s bank account and, on at least some occasions, deposited in Mr B’s bank account. Therefore, in addition to the trust documents, I’d ask for bank statements from both Mr A AND Mr B showing such transactions. Further, I’d ask for a statement from Mr B showing the dates and amounts allegedly paid by Mr A. Although not inconceivable, it would be odd if he did not keep a record of such payments.

    Based on the info given, I’d be taking a very close look at the following:

    1) actual liability

    In the alternative,

    2) long tenancy
    3) non-commercial
    4) (5-yr rule)
    5) contrived

    Without question, the alleged trust agreement will be needed and it should be gone through with a fine toothcomb. In particular, look for terms relating to any rights given to the clmt to occupy the property for life (possible long tenancy), and whether or not the terms allow the clmt to do so without financial cost (i.e. rent).

    It would also be entirely reasonable to ask for evidence of the Mr B’s alleged change(s) of circumstances.

    To head off a possible suggestion that you cannot ask a L/L for info, there are a couple of CDs where Commissioners have directed that L/Ls can and should provide info where that info is relevant to the claim and where such info is held by the L/L. Repost if you need those refs and I’ll try and dig them out.

    Hope the above helps.

    Jacqui Fowler

    Thanks for your reply. it does help. I would like details of the CD’s requiring information from the landlord if possible. My e mail address is


    Can I focus on one narrow point? Lets assume for the sake of argument that you accept there has been a trust in place from the outset (even if it was only written down at a later stage). There are conflicting Commissioners’ decisions on this point.

    CH/1278/2002 says that a trustee, who legally holds the title and has immediate control over the property, is the person who is in a position to dispose of the fee simple (i.e. to sell the freehold). That makes them subject to the former owner rule, even if they had no beneficial stake in the property. This reasoning was endorsed in Burton v New Forest (from CH/0563/2003): [color=blue:55dc2d082c]”There is no escape from the fact that at the date on which the appellant applied for housing benefit he was the registered title-holder and was entitled to dispose of the fee simple of 12 Carvers Lane. The fact that he would have been acting as a trustee, whether in breach or not in breach of trust, is for these purposes irrelevant.” [/color:55dc2d082c]- Lord Gage

    However, in CH/0608/2004, where the facts sound as if they were near enough identical to those of Jacqui’s case, Deputy Commissioner Sir Crispin Agnew of Lochnaw (crazy name, crazy guy) commented: [color=blue:55dc2d082c]”on the basis that the respondent was trustee of the whole property for her son, under a verbal trust, the owner of the property was the “Trust” and not the respondent. Under regulation 2(1), the person entitled to dispose of the fee simple of the property was the trustee [the respondent as trustee], and not the respondent personally. The respondent personally was therefore not the “owner”. For the purposes of regulation 7(1)(h) the respondent personally was not the owner, and if the trust was set up in 1991 when the house was purchased, was never the owner”[/color:55dc2d082c].

    The Court of Appeal case in Burton is obviously higher authority, and it’s not clear whether Dep Com Agnew was aware of it and the other Commissioner’s decision in 1278/02. So I think the argumkent that says the registered owner is the owner, end of, is a stronger one. But if you read the Burton case and 1278/02, then compare with 0608/04, you might feel that the strong similarity between the facts of your case and those of 0608/04 allow you to distinguish it from the other cases. Have to say, though, the registered owner principle seems to me to be a far-reaching one that will apply despite any variation in detailed facts between cases.

    Julian Hobson

    It might be worth having a look at R(SB)1/85 which considered the trust issue in relation to capital, it might be useful given the other references within it to what might happen were the “trust” to be abused.

    Courtesy of rightsnet

    Kevin D

    CDs where Commissioners have requested / directed that LLs should provide info include:

    CH/3458/2002 (Rightsnet)
    CH/1915/2004 (Information Issue 07 04)
    CH/2148/2005 (Information Issue 01 06)

    I’ll e-mail them to you anyway Jacqui.


    Jacqui Fowler

    Thanks for replies

    I have now received sight of the deed of trust.
    House purchased 2002
    deed of trust created 2004
    ownership transferred 2005 rent charged 2006

    Deed of trust says the owner (now the claimant since Jan 2006) could remain in the property rent free for as long as he shall so wish and power of sale shall not be exercised without his consent.

    I agree that the decisoin by Crispin Agnew is similar, but I do not agree that the claimant was never the owner as he was able to dispose of the property at least until the trust was created in 2004.

    Also the existence of this trust proves that it was not the intention that he be made to pay rent for occupying the property. He did not therefoe have to relinquish ownership to remain in the property

    Does this sound right please


    Kevin D

    I haven’t had time to read the CDs already discussed, but a couple of observations come to mind.

    Liability: It appears that there is no good reason for there to be a rent liability. If the trust states that the clmt can remain in the property rent free, any liability being imposed by the L/L would appear to be unenforceable.

    Non-commercial: unenforceability – HBR 9(2)

    5-yr rule: Based on the info now given, it seems clear that there is no entitlement under HBR 9(1)(h).

    Long tenancy: Difficult without seeing the wording, but there seems to be a strong possibility that the clmt has a “life” tenancy (ignoring liability issues for the moment). If so, nil HB per HBR 12(2)(a).

    Contrived: I wonder if the liability would exist if it wasn’t for the (potential) availability of HB……

    There is nothing to stop a “multiple” decision being made – it would be difficult (although not impossible) to justify the addition of additional issues at a later date.


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