a happy tail end to the week hello all

have a cl. :
on 26/02/09 they moved in to accomm. ownrd by father / 3 uncles.
the tenancy agreement stated the monthly rent is £600.00.
however, when cl. father found out that h.b would only meet £121.15 pw, lha rate, he reduced rent to £484.60 per month (pm) which is £121.15 x 4, and less than £525.00 pm had he charged him the lha rate.
cl. / father were called in to local authority (la) for meeting and subsequently :
cl. appears not to have even paid father the full h.b he received toward rent for the period 22/02/09 - 08/05/09, ie : cl. received £1.248.11 h.b and father showed evidence of £1.096.00 rent paid.
father stated it was no concern of la's what he would do if cl. failed to pay rent.
cl. has appealed h.b decision re : non commercial agreement / contrived tenancy, and i cannot see how this can succeed given the above facts, ie : there didn't appear to be a legally enforceable term in the tenancy agreement because cl. father was not asking for the rent to be paid, and reduced this to less than the lha rate.

any ideas or thoughts greatly appreciated ...

pete

I don't think there ought to be a problem with a landlord accepting lower rent that the original contractual amount, to keep a good reliable tenant in financial difficulty. That could be make perfectly good sense commercially.
However this almost looks as if the father is conniving in a plan to enrich his son by non-payment of HB. The council would be looking at whether the landlord would take steps to evict the son if the rent wasn't paid. At the moment it is not a lot in arrears and he wouldn't automatically get possession, so again a commercial landlord might take the view that it's early days yet.
It does all look a bit iffy - but is if iffy enough?

See Mr Commissioner Jacobs at paras 15-16 of CH/1076/2002:

"15. The law recognises that parties do not always operate their agreements in accordance with their legal terms. As I wrote in CH/1618/2002, paragraph 18:
‘It is common experience that contracts are often not implemented to the letter in all circumstances. There is much give and take in the operation of contracts.’
The law has a variety of concepts that allow the parties’ practice to override their legal agreement. Waiver and estoppel are but too examples. These concepts may operate either permanently or merely in relation to particular facts. So, the fact that the parties have chosen not to act in accordance with their legal agreement is not necessarily inconsistent with their arrangement being on a commercial basis. But nor is it irrelevant. The tribunal had to analyse the significance of the landlord’s conduct in this case.

16. The tribunal’s reasons for rejecting the landlord’s argument do not accord with my experience. That experience, albeit now some years out of date, was that landlords of properties let to housing benefit claimants were willing to accept the rent fixed by the Rent Officer or the amount paid by way of benefit. That experience is confirmed by evidence produced by the landlord for the appeal to the Commissioner. The evidence comes from the owner of a London firm Estate Agents and Letting Agents. It reads:
‘I understand that my duty is to the tribunal and I have complied and will continue to comply with that duty.
‘I have been an estate agent since 1978 and have been a proprietor of my own business since 1984. I am a fellow of the National Association of Estate Agents.
‘In 1990 I established the letting department of my business and we currently manage over 150 properties, the majority of which are let to tenants who claim Housing Benefit. Therefore I have an extensive knowledge of the Housing Benefit system and landlords attitudes and responses to rent paid in this manner.
‘In my experience it is not unusual for a landlord to accept the amount of rent paid by Housing Benefit as payment of full rent even if it is lower than the contractual rent. In fact I would say this practice almost becomes the norm when such a tenant is behaving well and caring for the property. It should be remembered that people who qualify for Housing Benefit have very limited personal funds and most reasonable landlords are happy to write off a small amount of potential rent in return for an easy and regular tenancy.
‘I confirm that in so far as the facts stated in my report are within my own knowledge I have made clear which they are and I believe them to be true, and that the opinions I have expressed represent my true and complete professional opinion

hello good fellows
and thanx for your replies and thoughts re : this matter.
i will advise cl. to proceed with appeal but i do still think this is a long shot given the facts of the matter ... but we shall see ???
will let you know the outcome ...

pete

Very interesting, just what I was looking for. I have a client in the exact same situtaion.... in fact, Sayo, I think it's the exact same client!!!

I've told him the same thing and advised that he needs to argue the commercial reasons for reducing the rent. I was not made aware, however, that not all the Housing Benefit had been passed on.