IN THE UPPER TRIBUNAL Case No. CH/662/2010
ADMINISTRATIVE APPEALS CHAMBER
Decision: The appeal is dismissed. The local authority must determine the claimant’s entitlement to housing benefit from 30 March 2009 on the basis that she satisfies the proviso in regulation 9(1)(h) of the Housing Benefit Regulations 2006
REASONS FOR DECISION
1. The claimant bought the property in respect of which she is claiming housing benefit, with the assistance of a mortgage, under the right to buy legislation in 2006. Unfortunately, in 2007 she lost her job, which she had held since 1993, and fell into arrears under her mortgage. She tried to avoid repossession by the mortgagee by moving in with her sister in June 2008, and letting the property to a tenant. She intended to use the rent to pay the mortgage instalments.
2. The tenant failed to pay the rent regularly, seriously damaged the property, and moved out in March 2009. By 5 March 2009, the mortgagee had obtained a court order for possession of the property because of the arrears and had instructed their solicitors to obtain a warrant for possession (see p.26 of the file). By that time the arrears amounted to nearly £3000. The tribunal found that the claimant wanted to move back in, but because of the state of disrepair (various windows were broken and the central heating did not work) she could not do so.
3. She saw a newspaper advertisement that a company, H Ltd, could purchase properties where the mortgagee was in arrears, and she contacted them. Contracts for the sale of the property by the claimant to H Ltd were exchanged on 17 March 2009, and by a tenancy agreement dated 18 March 2009 the claimant agreed to take a tenancy of the property from H Ltd for 12 months from 30 March 2009 at a rent of £450 per month.
4. The sale price appears to have been £53,000 and the sale was completed on 30 March 2009. There was unchallenged evidence both from the claimant and from the managing director of H Ltd that the claimant retained a key to the property throughout, as he put it at p.64 of the file, for decorating and cleaning purposes and to get her belongings into the house. The managing director of H Ltd also confirmed in his written statement that extensive repairs were made to the property and that he and his colleagues visited it on several occasions between 16 and 30 March 2009. He stated that when he visited on 26 March 2010 there was furniture in the property, including couches, a TV, a bed and kitchen accessories.
5. On about 23 March 2009, the claimant went to stay with her daughter. She stated to the tribunal that she had gone there because some of her possessions were there and she had to be there to see to their removal to the property. She had booked the removals van for 25 March, and the furniture was moved into the property that day. In her subsequent claim for housing benefit, she had stated that she had stayed at her daughter’s address until 30 March but in evidence to the tribunal she stated that she started sleeping at the property on 25 March.
6. The tribunal found that the claimant moved into the property on or about 25 March, but did not make any clear finding as to when she began sleeping there. As stated in paragraph 14 of the statement of reasons, it was not disputed that the claimant moved her possessions into the property from at least 25 March. No one else could have occupied the property from 18 March. Her intention was to make the property her permanent home and if there was a delay to the precise commencement of her full time occupation of the property that was caused only by the state of repair. The tribunal therefore concluded that she occupied the property from at least 25 March. It also accepted the evidence of the claimant that the physical move from the daughter’s home to the property took place over a period of time.
7. A few days after completion of the sale on 30 March, and the commencement of the tenancy period on that date, the claimant applied for housing benefit. In that application the claimant stated that she had moved into the property on 30 March 2010, and had previously been living at her daughter’s. In giving further information (file, p.27, she stated that she had been living at her daughter’s address from 23 to 30 March, and had previously been living at another address, which has since been identified as that of her sister.
8. The application was rejected by the local authority on the ground that the claimant fell foul of regulation 9(1)(h) of the Housing Benefit Regulations 2006 because she had previously owned the property being rented, and less than 5 years had elapsed since she used to own it. This was clearly the case, but the claimant contended that she fell within the exception to that provision as it went on to provide that “this sub-paragraph shall not apply where [the claimant] satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership”.
9. The tribunal concluded that in order to fall within this exception the claimant “needed to demonstrate that she was in occupation in the sense that she had physical control of the premises and that on the evidence in this case she had demonstrated that she did have physical control. The only period during which she did not have physical control during the course of her ownership of this property was when she had rented it to tenants.”
10. In seeking permission to appeal, the local authority set out its grounds as being that the statement of reasons does not explain why the tribunal preferred the new evidence regarding the date that the claimant recommenced occupation of the property as opposed to that declared on the original application. It drew attention to the discrepancy between her statement when applying for housing benefit that she had been living with her daughter between 23 and 30 March and her statement in evidence to the tribunal that she had slept at the property from 25 March. It pointed out that there was no evidence from the director of H Ltd that she had been seen at the property.
11. The local authority also contended that occupation for the purposes of the exception to regulation 9(1)(h) meant occupation as a home, bearing in mind that that is a requirement for the receipt of benefit under the sections 130 and 131 of the Social Security Contributions and Benefits Act 1992 and the Housing Benefit and Council Tax Benefit Regulations. It pointed out that there was no claim for council tax benefit for the period from 25 to 30 March (although equally I note that there is no evidence that it was ever charged to the claimant during that period). It contended that the test of occupation applied by the tribunal was incorrect, and that in addition there was a question of what period of occupancy was sufficient. Its submissions were further elaborated on very helpfully and fully at pp.124 to 126 of the file.
12. I can find nothing in the decision of the tribunal to indicate any finding by it as to the issue whether the claimant had slept at the flat between 25 and 30 March. On the basis of its decision that she was in occupation from the time her tenants left, there was no need for such a finding.
13. I have been referred at some length to CH/3616/2003 (recently re-affirmed in [2009] UKUT 60 (AAC)). That case confirms that the claimant could only become entitled to housing benefit on renting a property which she has owned in the preceding 5 years if she could show that she had continued in occupation following the sale, which required that she should have remained in occupation both before and after that sale. It does not deal with the question of what would be sufficient to amount to occupation for this purpose either with regard to the quality of the occupation or, if the claimant was in occupation immediately prior to the transfer and remained in occupation thereafter, the period prior to the cessation of ownership for which it had to continue.
14. The tribunal considered at some length observations of Commissioner Jacobs in CH/0716/2002, cited by him in CH/3616/2003, in which he considered in relation to the differently worded provisions of the Housing Benefit Regulations 1987 whether there could be exceptional circumstances where there could be a break in continuity without the claimant being excluded from benefit. It may be that such circumstances could exist without involving any abuse of the housing benefit system if benefit were then to be payable. For example, if a mortgagee with a warrant of possession had in fact evicted the claimant before the sale and leaseback could be arranged, so that she was not in occupation for a few days or weeks, I see no reason why the word “continued” in the proviso to regulation 9(1)(h) should not still apply to her. That, however, is not the present case. She had voluntarily given up occupation when the property was let, and unless she had resumed occupation before the completion of the sale to H Ltd, she could not fall within the proviso.
15. Although the tribunal appears to have spent some time considering in its reasons the issue of exceptional circumstances, it did not in the end base its decision on this point. In the present case, either the claimant was in occupation before and at the time that she relinquished ownership, or she could not benefit from the proviso to regulation 9(1)(h). If she was in occupation, then plainly she could not continue in occupation without relinquishing ownership, as the mortgagee were applying for a warrant for possession and she had no means of paying them sufficient to stave off its execution or saving her property from being sold by the mortgagee.
16. It is also plain that for this purpose she remained the owner up to the date of completion, as she was the registered proprietor and entitled in that capacity to dispose of the fee simple of the property (cf R(H) 7/05). There is nothing in CH/3616/2003 to suggest otherwise. At the time of the sale in that case, the claimant had moved out of the property.
17. The proviso to regulation 9(1)(h) does not state that the occupation of the property by the claimant or the claimant’s partner had to be as their home prior to the claim for housing benefit. In this respect it is unlike section 130 of the Social Security Contributions and Benefits Act, which entitles a person to housing benefit and which requires that the claimant should be occupying the dwelling as their home, and regulation 7 of the 2006 Regulations, which sets out circumstances in which a person is not to be treated as occupying a dwelling as their home. Nevertheless, the local authority has contended that it is to be implied into the proviso that the occupation should be as the home of the claimant or partner.
18. Further, if all that is required is occupation of the dwelling by the claimant, and not occupation of it as her home, then there would also seem to me to be a question whether her re-taking possession of the property after the tenancy determined, while leaving it empty, could amount to occupying it for the purpose of the proviso to regulation 9(1)(h).
19. It is unnecessary for me to determine either of these issues in the present case. The property was clearly occupied by the claimant at least from the time on 25 March when she moved her furniture and other belongings into it. Furthermore, it appears to me that it was occupied by her as her home from that time. As I stated in paragraph 21 of R(H) 9/05,
“(3) Once the claimant had given up her previous home, and had moved her furniture into the flat, the flat was occupied by her and had become her normal home – ie the place she would normally live in.
(4) I conclude that the claimant occupied the flat as her home in the ordinary use of that expression at latest when her agents moved her furniture in. In that she had no other home, by that time the flat had become her normal home.”
20. The local authority has sought to distinguish R(H) 9/05 on the basis that in that case the claimant was in hospital and was not resident elsewhere. It contends that here the claimant had declared that she was occupying her daughter’s house up to 30 March. In fact what the claimant stated at p.27 was that she was living there from 23 to 30 March. She did not describe it as her home, and it was plainly a temporary address to which she had moved for a few days while repairs were done to the property to make it habitable. She was not, in my judgment, occupying her daughter’s house as her home but as her daughter’s temporary guest. Insofar as her previous address had been her home, she had given it up. By moving her furniture into the property to use it as her home in those circumstances, she was occupying it as her home. On 26 March, if she was asked where her home was, the answer would have been the property.
21. I therefore conclude that the tribunal came to a correct conclusion, although the correctness of the precise route taken by it may be open to question. It is unnecessary for me to decide that question or the hypothetical question raised by the local authority, whether, if the sale was completed at 09.48 on 30 March, the claimant’s presence at 09.47 would be sufficient to satisfy the “continued to occupy” requirement. In the present case, the occupation was at least 5 days before completion and the claimant could not have continued to occupy the dwelling without relinquishing ownership because she would have lost possession of it to the mortgagee had she failed to complete.
22. The appeal is therefore dismissed. The tribunal made no finding as to whether the claimant slept at the property rather than at her daughter’s home between 25 and 30 March, and for the reasons I have given, it did not need to make any such findings.
(signed) Michael Mark
Judge of the Upper Tribunal