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Forum Home  →  Discussion  →  Housing costs  →  Thread

Life tenancies

Nicola Hersh
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The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006
state that housing benefit will not pay for long term or life tenancies - unless it is shared ownership scheme or social landlord tenancy.

Do these rules still apply?

Secondly, has anyone any suggestions to change the tenancy but still provide lifetime security?

It is a charitable private landlord and the claim will be under LHA.

nevip
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You need to check the paperwork.  Under section 52 of the Law of Property Act 1925 certain written tenancies must be created by deed.  A long tenancy (i.e. a “tenancy granted for a term certain of more than 21 years”) can only be created by deed.  Therefore, just because it is in writing does not necessarily make it a deed and thus trapped by s52.

Changing the tenancy might fall foul of the contrivance rules. 

Jon (CANY)
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An almshouse-type arrangement would normally fall under HB, but if there is a genuine long tenancy that does fall foul of the HB rule, then you’d expect it to be eligible for DWP housing costs instead. E.g. for Pension Credit see Sch 2 para 13(1)(a) and (6)(d):

https://www.legislation.gov.uk/uksi/2002/1792/pdfs/uksi_20021792_310817_en.pdf

Nicola Hersh
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Thank you both for your replies

nevip
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Just to clarify my post.  If it is a long tenancy ( a tenancy granted for a term of more than 21 years) and is not created by deed then it is not a long tenancy for HB purposes and HB is therefore payable.  See R(H) 3/07.

Brian Fletcher
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I’m not sure that your analyses is correct, or whether the case you quote has any application on the facts.

A legal estate is defined at s.1 LPA 1925 as;
(1) The only estates in land which are capable of subsisting or of being conveyed or created at law are
(a) An estate in fee simple absolute in possession (freehold)
(b)A term of years absolute (leasehold)
(3) All other estates, interests, and charges in or over land take effect as equitable interests.

S.52 (2) LPA 1925 does not apply to
(d) leases or tenancies or other assurances not required by law to be made in writing;
(da) flexible tenancies;
(db) assured tenancies of dwelling-houses in England that are granted by private registered providers of social housing and are not long tenancies or shared ownership leases

The problem with your analyses this is that there is a tenancy ‘for life’, which is an indeterminate period of time which could be as little as a week, or a significant amount of time; there is no ‘term of years absolute’; and,

There needs to be more information on what is the instrument creating the tenancy for life as it may fall into an exclusion.

nevip
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Regulation 2 of the HB regulations states that a long tenancy (a tenancy granted for a term certain of more than 21 years) is not eligible for HB.  This must be created by deed.

So, a tenancy purporting to grant a long tenancy which is not made by deed cannot create a long tenancy so HB is not barred from payment on that ground only.  Hence I suggested looking at the document creating the agreement.

With respect to the original poster, it seems that the terms “long tenancy” and “life tenancy” in the OP might be seen as being used interchangeably.  And in real life, they often are.  Only payments under the former and not the latter (if in fact are different) are ineligible for HB as the term “life tenancy” is not contained within 12(2) of the HB regulations

If it is a life tenancy (and the term is not one being used in the OP that is often used to apply to fixed term tenancies) and thus not for a term certain, then it can’t be a long tenancy either.  Thus HB is not excluded on this ground. 

Either way, if the tenancy (legal or equitable) is not one that is specifically excluded by regulation 12(2) of the HB regulations, then it is capable of attracting HB.

ClairemHodgson
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i found this thread confusing - if only because, from a land law perspective, life tenancies normally arise under a trust or settled land settlement and don’t involve paying rent at all (e.g., my trustees to hold the house on trust and allow my widow to live there until death) or similar.  or a settled land act tenant who is in fact the landowner (many dukes, earls, etc with vast estates, nearly all settled land act life tenancies..).  i know that’s no help on the issue, but this is all terminologically confusing.

does the legislation in fact refer to leasehold when referring to long tenancies created by deed?  since someone owning a property on a lease is in fact a tenant although they wouldn’t necessarily think of themselves as being a tenant….

HB Anorak
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Brian: life tenancies and certainty -I think this is covered by s149(6) of the LPA isn’t it?  A life tenancy is treated as a 90-year tenancy.  Thus if it is properly executed it is too long for HB (but would attract DWP benefit/loan instead).

But normally, purported life tenancies are between relatives who will not observe the formalities (no deed, not registered).  So the deemed 90-year lease has not in fact been created after all.  Chances are that whatever it is the parties have created, it will be something that HB Reg 12(1) covers - licence, de facto assured shorthold tenancy.  This was the point made in R(H) 3/07.

If o/p’s client and their landlord are looking to create lifetime security with HB entitlement, the solution is an open-ended assured tenancy (not a shorthold).

Brian Fletcher
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What Claire said, and also, land law and equity and trust are incredibly complex areas of law, developed over hundreds of years, and which require access to all the facts. I disagree on the point on long tenancy and life tenancy being used interchangeably as they both have very different meanings. It is not something I have ever seen or heard being used interchangeably, and again I’m with Claire insofar as the terminology is very confusing in its presentation.

Life tenancies can be created in a few ways, but most commonly when the beneficiaries of a person’s estate have their inheritance deferred until a life tenant dies, or voluntarily surrenders their interest. The point being that there are various ways of creating a life tenancy.

S.1 of the LPA 1925 defines estates in land, while s.52 defines that a deed is required to make a disposition of that land effective; it also provides exceptions to that rule for short tenancies defined at s.54. Technically, any lease for a period of more than three years should be by deed. The point is though that there other ways under which a tenancy could have been created which may not require a deed. Notwithstanding that there is a whole bunch of case law on identifying whether something is, or is not a deed, dependent on whether the document was created before the Law of Property (Miscellaneous Provisions) Act 1989, which first sets out formally what is required of a deed. There is no indication of the date the actual tenancy was created. For example, I have a relative aged over 80, who recently gave up a farm tenancy under which rent was payable at six monthly intervals, and which was granted to his father and any children he may have for their natural lives. The document creating that tenancy pre-dated the 1925 Act and it would not meet the definition of a deed under LPMPA 1989, yet on the evidence, the document was deemed to be a deed at common law. The question of whether HB was payable in respect of the rent was determined on whether the deed created a long tenancy, which it didn’t as it was not ‘granted for a term of years certain’. Just suppose for a moment though that the document had been found not to be a deed, and for the sake of argument, suppose it was for ‘certain term’ of 25 years, with a covenant for perpetual renewal in the event that certain circumstances are in existence. Different circumstances may change the route of the decision, and it may arrive somewhere else.

In the case cited, there was a document creating a tenancy for 25 years. That document was ineffective due to the fact it was not a deed (as per s.1 LPMPA 1989 as the document was created in 2004), and instead the tenure was deemed to be a periodic tenancy for the purposes of HB. Here we do not know whether the tenancy is a long tenancy, or a life tenancy, and we do not know the method by which, (whatever it is) was created. There could be any number of reasons why it does, or does not attract HB, but the fact is that there is insufficient information on the creation of the tenure, or the type of the tenure, to be definitive on the entitlement issue.

Brian Fletcher
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HB Anorak - 21 November 2017 12:04 AM

Brian: life tenancies and certainty -I think this is covered by s149(6) of the LPA isn’t it?  A life tenancy is treated as a 90-year tenancy.  Thus if it is properly executed it is too long for HB (but would attract DWP benefit/loan instead).

But normally, purported life tenancies are between relatives who will not observe the formalities (no deed, not registered).  So the deemed 90-year lease has not in fact been created after all.  Chances are that whatever it is the parties have created, it will be something that HB Reg 12(1) covers - licence, de facto assured shorthold tenancy.  This was the point made in R(H) 3/07.

If o/p’s client and their landlord are looking to create lifetime security with HB entitlement, the solution is an open-ended assured tenancy (not a shorthold).

An instrument creating a life tenancy could be a will, but generally there are only housing costs associated with a tenancy for life; ie I leave my property to X & Y subject to a life tenancy for x providing that X keeps the property in good order and pays all rates and taxes etc.

Or alternatively I make a self-declaration of trust pursuant to s.53 LPA 1925 where I hold my property on trust for my children X.Y, & Z in equal shares, providing that Z can live there for his lifetime, or until such time as Z no longer wishes to live there (rough draft to make the point before anyone pokes holes in it). Z gets to live there under a life tenancy until such time that the trust ends. Tenancy under a trust would be subject to the rule against perpetuities, but not s.149 due to the fact that there isn’t a tenancy for rent. The effect of s.149 from my way of thinking is to put a determinable period on a lease for life, rather than a life tenancy, which is a right to live there created by some instrument other than a lease.

HB Anorak
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Yes, fair enough. I was guilty of the lay person’s error of using tenancy when I meant lease! I think what OP has in mind is an attempt to creste a tenancy by lease with a life term, which would be regarded as 90 years under s149 if properly executed