Under the spotlight
Housing associations should review their policies before exercising the new flexible tenancies, say Suzanne Gregson and Alison Oldfield, partners at Eversheds
The government’s consultation on social housing reform, Local decisions: a fairer future for social housing, has some interesting implications for housing associations.
Underpinning the consultation, which closed this week, is the principle that registered social housing providers should have greater flexibility to determine the type (and terms) of tenancies they can grant to new tenants, against the backdrop of the local housing strategy.
New terms and tenures
Following the end of the consultation process, the government and the Homes and Communities Agency will subsequently detail these powers to housing associations. Going forward, associations will be able to offer fixed-term tenancies (in appropriate circumstances) at either affordable or social rent levels, in accordance with investment settlements agreed with the HCA.
The government’s stated desire that ‘social landlords should respond creatively and sensibly to the particular needs of local communities and particular circumstances’, is coupled with the principle that decisions made under these new flexibilities should be based upon the proper operation of transparent policies.
Whatever reform emerges from this consultation, clearly defined and demonstrably applied policies will be critical to the proper provision of social housing in future if the government’s hopes are to be realised.
The existence and application of tailored housing policies is, however, currently coming under the spotlight. Evershed’s specialist Judicial Review team has noticed an increase in the number of pre-action protocol letters for Judicial Review applications that has followed the recent case of Weaver v London and Quadrant Housing Trust. This is causing unease amongst housing association advisers that a concerted effort will be made by tenant lawyers to focus their attention on housing associations and the policies that they administer.
Rightly or wrongly, recent cases have shown that persistent tenants can, and do, obtain the sympathy of the courts when they challenge the performance and / or policies of housing associations. If they were being honest, most organisations within the sector would take the view that there are many operational decisions that they make with regard to which such a challenge could be made.
There are two main concerns for housing associations contemplating the exercise of their new flexibilities in the decision to allocate or renew the new affordable tenancies, and the key terms that those tenancies will contain. These are:
- does the association have a suitable, transparent policy that makes its decision process clear and proportionate to the circumstances of each case?
- will it be able to demonstrate that this policy has been followed in practice?
With costs for judicial review cases potentially reaching as much as £50,000 if a case is fully contested, several claims within one financial year could have serious implications on legal budgets, and possibly even the reputation and financial viability of the organisations themselves.
Housing associations that want to be ahead of the game are well advised to learn the lessons of these recent cases and prepare for a potential new lettings policy by carrying out organisation-wide reviews of key policies. Questions include:
- are there appropriate, regularly updated and comprehensive policies in place to cover the new tenure flexibilities?
- will complaints be processed and progressed transparently and methodically under these policies?
- can there be confidence that policies and procedures will be demonstrably followed in practice?
Such reviews should be undertaken in conjunction with legal advisors with specialist judicial review experience, who will be able to assist with the review of such policies and advise on steps to minimise exposure to litigation.
There is sufficient time to undertake this task, but if housing associations fail to do so, they risk exposing themselves to aggrieved applicants and tenants being encouraged by claims lawyers to bring high-profile court proceedings, with the resultant cost and damage to their reputation.
While there is an opportunity to do something, we strongly advise shutting the stable door before the horse bolts.
Suzanne Gregson is head of Eversheds’ social housing litigation team, email@example.com
Alison Oldfield is head of Eversheds’ specialist judicial review team, firstname.lastname@example.org