Client builds granny annex for elderly mum. Charges mum rent. HB refused under Reg 7(1)(a). Case appealed. Included in bundle is copy of planning permission which contains condition that the annex should not be occupied or used other than incidental & ancillary to the original dwelling. Appeal heard. Chair concerned that if appeal were to be decided favourably, client would fall foul of the planning office (Town & Country Planning Act 1990) and very kindly agreed adjournment for us to obtain counsel's opinion, which I am in process of doing. However, it would be most helpful if anyone out there has encountered anything similar. Basically, the issues are:

If under the Planning Act the annex is not a seperate dwelling could a HB decision effectively 'override' this (bearing in mind that the Valuation Officer has designated the annex as a seperate dwelling for Council Tax purposes)?

What action could the Planning Department potentially take against the client were the appeal to succeed and how likely are they to do so (bearing in mind that the client discussed the situation with both departments prior to building the annex and was misled by the LA that his mum would be eligible for HB)?

Any pointers or suggestions gratefully recieved...

I'll have a go at answering this but please bear in mind it is only a personal view.

I think much depends on the reasoning under Reg (7)(1)(a) - i.e. why the LA thinks that the agreement is not on a commercial basis. If, as it seems, it has a lot to do with the separateness of the dwelling or otherwise, then I would say the benefit entitlement should be decided on its own merits and on its facts, irrespective of what the planning authority thinks, which is what the Valuation Officer appears to have done. The implications in planning law are a matter for the claimant and the planning dept. But I note that the Tribunal Chair thinks otherwise! I am a bit surprised that the LA has not gone for 7(1)(b).

I do not know what enforcement action the planning authority might take in this case, but I am aware that it can force the alteration or demolition od unauthorised developments.

I suppose it revolves around the question of whether a genuine tenancy can exist if its existence conflicts with some legal provision. A similar issue has arisen in my LA in the past with HB claims from sub-tenants of council tenants who have not had permission to sub-let.

Thanks- all contributions gratefully recieved!

Yes- I agree with you about 7(1)(b, which the LA has so far ignored. They did at one point refuse benefit under 7 (1)(g) but revised their decision in favour of a refusal under 7(1)(a). As you say, I think the crux of the matter is whether a genuine tenancy can exist under these circumstances.

Just a couple of points to consider.

With regard to the validity of the tenancy: - see Bruton v London and Quadrant Housing Trust 1999 where the House of Lords decided that the facts of Mr Bruton's occupation (exclusive possession, liability to pay rent) created a tenancy in this case even where the landlord (Quadrant Housing) had no right to do so under its contract with the LA. Quadrant had a license to occupy from the LA and thus no proprietary interest in the land out of which to create tenancies. However, the tenancy agreement between Quadrant and Mr Bruton did not bind third parties, such as the LA. So if the LA determined the head lease (with Quadrant) then the sub-lease between Quadrant and Mr Bruton would also be determined.

I would think that the LA would have to come up with other reasons for arguing non-commerciality and not rely solely on the alleged breach of planning permission.

Second, a court or tribunal is not estopped from making its own finding of fact on an issue, by any finding of fact on the same issue by a different court/tribunal dealing with a different aspect of that issue.

Thus a HB (tribunal) decision does not bind a court hearing the alleged breach of planning permission, and, vice versa. However, the tribunal's concern seems entirely justified in that a favourable HB decision would seem to entail a breach of planning permission as it would be predicated on the accommodation being classed as a separate dwelling and thus not ancillary to the main building.

I think counsel's opinion on this would be absolutely crucial.

Regards
Paul