How to challenge decisions — liability to pay rent for Housing Benefit and Universal Credit Housing Element
A how-to guide looking at how to challenge a decision regarding liability to pay rent for Housing Benefit and Universal Credit Housing Element
Main issues
To be entitled to Housing Benefit (HB) or the housing costs element of Universal Credit (UCHE) a claimant must be liable or treated as liable to pay rent (reg 8 HB regs 2008/reg 25(3) UC regs 2013). In many cases this is a straightforward issue. However, where living arrangements are unusual or there is difficulty in providing evidence of rental liability the Department for Work and Pensions (DWP) or local authority (LA) (decision makers) may refuse a claim on the grounds that a claimant does not have a legally enforceable agreement to pay rent. Issues concerning liability are frequently a subject of benefit appeals. This article provides tactical advice for establishing that a claimant has a liability to pay rent.
This article does not cover situations where a decision maker refuses HB or UCHE because they regard the agreement as not commercial or contrived. A second article provides help with this. As appeals concerning rental liability often raise further issues about commerciality and contrivance it may be helpful to use both articles when preparing appeals.
Liability to pay housing costs
A claimant has a liability to pay rent if they or their partner have a legal obligation to pay rent (R v Rugby BC HBRB ex p Harrison (1994) 28 HLR 36). This can include unusual living arrangements. In R v Stratford-upon-Avon DC HBRB ex p White [1998] it was accepted that a relationship based on a spiritual basis could have legally enforceable aspects to it. In this case the claimants lived in a commune, but made regular rental payments. In R v Woking BC ex p Crawley [1996] unreported, 19 June QBD the judge outlined that a distinction should be drawn between living arrangements made between friends and family and legally enforceable arrangements. Regulation 25(3) universal credit (UC) regs 2013 specify that the liability to make payments must be on a commercial basis.
Even if a claimant provides evidence of an agreement to pay rent, no payments will be made if the decision maker decides that the agreement is a sham. The onus of proof is on the decision maker to establish this (see CH/1618/2002).
Evidence of liability
Providing evidence of a legal obligation to pay rent is often a problem for claimants. Decision makers routinely ask for documentary proof of rental agreements and will refuse claims if these are not provided promptly. Claimants can struggle to obtain this evidence if their landlord is uncooperative.
Claimants should challenge decisions where claims are refused on the basis of a failure to satisfy evidence requirements, particularly if they have attempted to satisfy these and the information is not available. An agreement to pay rent does not have to be in writing for it to be legally enforceable. In R v Sutton LBC HBRB ex p Keegan [1992] 27 HLR 92 the court found that where the agreement is oral and the evidence is sparse, the decision maker should give weight to the claimant’s declaration on the claim form that they have a liability to pay rent.
To prevent difficulties with claims, claimants should present as much evidence as they can regarding their liability to pay rent. This might include bank statements — showing evidence of regular rental payments, receipts for rent paid or a letter from the landlord.
Treated as liable to pay rent
There is provision within the HB regs to treat a claimant as liable to pay rent (reg 8(1)(a) HB regs 2008). The partner of the liable person is automatically deemed to be liable (reg 8(1)(b) HB regs 2008).
Under reg 8(1)(c-e) HB regs 2008 a person will also be treated as liable in the following circumstances:
- A person who has to make payments if they are to continue to live in the home because the person liable to make them is not doing so and either-
(i) they were formerly the partner of the person who is liable; or
(ii) they are some other person whom it is reasonable to treat as liable to make the payments (reg 8(1)©(ii) HB regs)
- A person whose liability to make such payments is waived by his landlord as reasonable compensation in return for works actually carried out by the tenant in carrying out reasonable repairs or redecoration which the landlord would otherwise have carried out or be required to carry out (this provision is restricted to 8 benefit weeks)
- A person who is a partner of a student to whom regulation 56(1) HB regs applies (circumstances in which certain students are treated as not liable to make payments in respect of a dwelling)
Reasonable under reg 8(1)©(ii) means reasonable in all the circumstances and in light of the overall purpose of the HB scheme (FK v Wandsworth BC (HB) [2016] UKUT 570 (AAC)) and Babergh DC v GW (HB) [2017] UKUT 40 (AAC).
There are also provisions to treat a claimant as liable to make payments for housing costs (para 1–4 part 1 schedule 2 part 1 UC regs 2013). A claimant is treated as liable to make payments where:
- The liable person is a child or qualifying young person for whom the claimant or their partner are responsible
- The liable person is failing to make payments and the following conditions are met:
(i) the person who is liable to make payments is not doing so;
(ii) the claimant has to make the payments in order to continue occupation of the accommodation;
(iii) the claimant’s circumstances are such that it would be unreasonable to expect
them to make other arrangements
- It is otherwise reasonable in all the circumstances to treat the claimant as liable to make the payments
- The liability to pay rent is waived by the person to whom liability is owed and this is reasonable compensation for repair or re-decoration works carried out by the claimant which the person to whom liability is owed would otherwise have been required to carry out this work;
- The claimant has rent free periods. The claimant is treated as liable to pay rent or service charges throughout this period.
Problems when the liable person moves out
Both UC and HB contain provisions that allow a claim for rental costs if the liable person is not meeting this liability (reg 8(1)© HB reg 2008; schedule 2 para 2 UC regs 2013). These provisions are similar with the added condition under UC that it must be unreasonable to expect the claimant to make other arrangements. HB case law defining reasonableness in this context should also be applicable to schedule 2 para 2 UC regs 2013. An emerging issue under UC is when a relationship breaks down and the partner who is liable to pay rent moves out of the property. In some cases UC are refusing to accept that the remaining partner has a liability to pay rent. A claimant should challenge this decision on the grounds that the provisions in schedule 2 para 2 UC regs 2013 should apply to their circumstances. See article here on ‘untidy tenancies’ for problems relating to joint tenants.
Treated as not liable to pay rent
Even if a claimant is liable to pay rent, under reg 9(1) HB regs 2008 regs a claimant can be treated as not liable to pay rent. For HB a claimant is treated as not liable to pay rent if:
- The tenancy or agreement to occupy the accommodation is not on a commercial basis
- The claimant pays rent to someone who also lives with them and is a close relative of them or their partner
- The claimant is renting from a former partner and the home is their former joint home. Or, the claimant is renting from their partner’s former partner and the home was the partner’s home with their former partner;
- The claimant, or their partner, is responsible for a child of the person to whom they are liable under the tenancy
- The claimant, their partner, former partner, partner’s former partner or a close relative (who lives with them) is a director or employee of a company which is their landlord or trustee or beneficiary of a trust which is the landlord. This will not apply if the claimant can show that the liability was not intended to take advantage of the HB scheme
- The claimant’s liability is to a trustee of a trust of which their or their partner’s child is a beneficiary
- The claimant was previously the non-dependent of someone who lived and continues to live in the accommodation; although this will not apply if the claimant can show the arrangement was not created to take advantage of the HB scheme
- The claimant or their partner previously owned, or had a long tenancy (i.e a lease of over 21 years) for the accommodation and less than five years have passed since they last owned it or the tenancy ceased. This does not apply if the claimant can show that they could not have continued to occupy the accommodation without giving up ownership or the tenancy
- The claimant or their partner are employed by the landlord and are occupying the accommodation as a condition of their employment. This does not apply if the employment comes to an end
- They are a member of and are fully maintained by a religious order
- They are in residential accommodation
- The local authority consider that the liability has been created to take advantage of the HB scheme
Under para 5–7 part 2 schedule 2 UC regs 2013 a claimant is treated as not liable to make payments towards housing cost if:
- The liability is to a close relative of the claimant or their partner or of a child or qualifying young person that the claimant or their partner are responsible for and that person lives with them
- The landlord is a trustee of a trust or a company and the trustees of the trust or the owners or directors of the company include the claimant, their partner, child or a qualifying young person or a close relative of these (if they live in the same accommodation)
- The DWP consider that the liability was contrived in order to get or increase the UC(HE).
The list of exclusions is smaller for UC. In reality, however, most of the additional categories of claimant listed under reg 9 HB regs 2006 will also be ineligible for UCHE on the grounds that the tenancy is not commercial, is contrived or not legally enforceable. The need for an agreement to be on a commercial basis is not listed under the exclusions in schedule 2 UC regs 2013, but is a requirement under reg 25(3) UC regs 2013 which states that the liability to make payments must be on a commercial basis.
Meaning of close relative
Close relative within the meaning of the legislation is a parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, siblings, stepparent and stepchildren. In-laws and stepchildren include those created by a civil partnership. Relationships created by a marriage and civil partnerships are severed on divorce / dissolution.
HB case law and liability issues
Where UC provisions relating to rental liability are the same as for HB, case law relating to HB can be used in these cases. This would apply, amongst others, to cases involving the following:
- Disputes about what having a legal liability means;
- What reasonable means in the context of assuming liability for rental payments;
- Evidence requirements for demonstrating a legal liability for housing costs.
Summary of useful case law and resources
Prior to 2 July 2001 housing benefit appeals were heard by Housing Benefit Review Boards and appeals were via judicial review to the High Court. This means that it can be hard to obtain a copy of HB case law prior to 2001. Decision makers should be familiar with most of the decisions referred to here and using the case name to establish a point of law will be sufficient for most appeals. Rightsnet also has a case law archive that contains some older HB case law. Bailii can also obtain copies of unreported decisions.
Another useful source is the Housing Benefit Guidance Manual and Chapter F2 of Advice for Decisions Making. Decision makers use this guidance to help them to make decisions on housing costs. If they fail to follow their own guidance pointing this out can often assist in an appeal. It is always worth checking this guidance when preparing an appeal.
Summary of helpful case law
Unlicensed and unregistered arrangements
Just because a claimant is living in a property that is unregistered or unlicensed, that alone does not mean that the landlord cannot charge rent. In the case of tenancies that are unlawful a claimant can still claim housing benefit if the tenancy is unlawful rather than illegal (see Gov of Peabody Donation Fund v Higgins CA 1983) 1 WLR 1091, 10 HLR 82).
A tenancy can exist without a rent book — R v Warrington BC ex p Williams (1997) 29 HLR 872.
‘Sham’ agreements — CH 1618/2002 contains helpful guidance on what might constitute a sham agreement for decision makers and tribunal to refer to. Confirms onus of proof is on the decision maker to show that an agreement is a sham.
Legal liability to pay rent — R v Rugby BC HBRB ex p Harrison (1994) 28 HLR 36.
Unusual living arrangements — R v Stratford-upon-Avon DC HBRB ex p White [1998].
Legally enforceable agreement — R v Woking BC ex p Crawley [1996] unreported, 19 June QBD.
Evidence requirements — R v Sutton LBC HBRB ex p Keegan [1992] 27 HLR 92 — claimant’s statement on claim form regarding liability should be given weight (decision available on rightsnet).
‘Reasonable’ in the context of receiving HB if the liable person is not paying — FK v Wandsworth BC (HB) [2016] UKUT 570 (AAC) and Babergh DC v GW (HB) [2017] UKUT 40 (AAC).
Rachel Ingleby is a Benefits Expert in the Expert Advice Team at Citizens Advice.
