Monica Carter became a secure tenant of Broadland District Council in 1987, but shortly afterwards, the property was transferred to Wherry Housing Association by way of a large-scale voluntary stock and she became instead an assured tenant under the Housing Act 1988.
The freehold title was subsequently transferred to another housing association, which then merged with other RPs to form Clarion.
In 2004, Ms Carter moved into the property to look after her ailing mother, who sadly passed away in 2017. At this point, Ms Carter approached Clarion to purchase the property but was refused. Furthermore, Clarion took the view that Ms Carter should not be allowed to stay at the property and served an NTQ. As a result, Ms Carter applied to succeed to the tenancy instead, but Clarion rejected the application on the basis that there was no statutory right of succession, that Ms Carter did not fulfil the criteria for succession under the terms of the assured tenancy, and that even if she did, she could not rely on those terms because she was not a party to the tenancy agreement (privity of contract doctrine).
A second and third NTQ and also a Notice of Seeking Possession (NOSP) on Ground 7 Schedule 2 Housing Act 1988 were served by Clarion and possession proceedings were eventually issued.
In defending those proceedings, Ms Carter successfully argued before the County Court that:
- she became an assured tenant of the property in equity on her mother's death in 2017. As her mother died intestate, Ms Carter argued that she was the beneficiary under a trust arising from the rules of intestacy and had an inchoate right to establish title to the tenancy pending her appointment as a personal representative of her mother. Furthermore, she argued that her interest was sufficient to bring her within the wide definition of a tenant under s45(1) Housing Act 1988, which includes “a sub-tenant is any person deriving title under the original tenant or sub-tenant”.
- the NTQ relied upon by Clarion was invalid and did not terminate the tenancy. The County Court was not convinced, on the evidence available from Clarion, that the NTQ was served on the Public Trustee before it expired and criticised Clarion for its poor evidence on this point.
- the possession claim should be dismissed on the basis that the NTQ and Clarion’s decision to claim possession were unlawful on public law grounds.
- granting possession would violate her rights under Article 8 European Convention on Human Rights.
Although the High Court held that Ms Carter’s first argument was a moot point (“whether it is called an inchoate right or a chose in action or a putative or nascent equitable interest, is too weak to count as a tenancy in equity”) and that she did not enjoy any statutory rights of succession, it nonetheless found in her favour and dismissed the appeal.
The High Court held that Ms Carter had in fact acquired the right to enforce the contractual succession provisions contained in the tenancy agreement on her mother’s death. It went on to determine that Ms Carter was the beneficiary of a trust of the promise made by Clarion’s predecessor in title to her mother that it would observe the terms of the tenancy agreement relating to succession after the original tenant’s death. It held that:
“The case is one where the equitable exception to the doctrine of privity of contract is made out. I reach that conclusion with no regrets or misgivings. The qualifying successors' equitable right to enforce the succession terms provides an antidote to what would otherwise be an unjust lacuna during the "limbo" period while the Public Trustee holds the legal title to the tenancy.”
The High Court then went on to consider whether Ms Carter complied with the contractual conditions necessary to succeed to the tenancy and found that she had, because she made a written application to succeed to the tenancy, she complied with all requirements imposed by Clarion in making the application and she provided sufficient evidence that the property was her main or principal home at the time of her mother’s death.
The High Court also found that her public law defence had merit as Clarion’s decision that she could not succeed to the tenancy was vitiated by unlawfulness and procedural unfairness. The High Court upheld the findings of the County Court in this regard, stating, "much of the delay arose from Clarion unreasonably refusing to accept that the property was Ms Carter's home and had been for many years, just because she owned another property. Clarion had clearly closed its mind, failed to apply its own policy, failed to consider the application to extend time and fixated on its irrelevant allocation policy".
This case serves as a reminder for local authorities and social landlords, who exercise a public function, to comply with their own internal policies and processes and assess tenancy succession claims on each case’s merits and available evidence and with an open mind. Any decision vitiated by unlawfulness and procedural unfairness is likely to be defended and it will all come down to the strength of the evidence provided by each party. In this case, Clarion did not keep a clear record of how their decision was made and did not always provide a clear reasoning to Ms Carter as to why it was rejecting her application.
Regarding the ability to succeed as a tenant in equity under the intestacy rules, such a situation is unlikely to arise very often. The amendments made by the Localism Act 2011 to the assured tenancy regime only affects tenancies granted post 1 April 2012, in that anyone other than the tenant’s spouse/civil partner/cohabitee can succeed if the terms of the tenancy specifically allow it and there can only be one statutory succession.
The Localism Act provisions does not apply to assured tenancies granted before 1 April 2021, therefore a right of succession for anyone other than a spouse/civil partner/cohabitee will be conditional upon the potential successor complying with various conditions such as living at the property as their only or principal home for a specific period of time.
For more information on tenancies and general asset management, please contact Clive Adams or another member of the Social Housing Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at November 2021.