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Bedroom tax and social landlords
I’ve sent the following to my briefing subscribers as a suggestion on the way social landlords ought to respond to the bedroom tax. Comments appreciated..
“It seems to me that a lot of our jobs have rested on the (sometimes unclear) joint interest in landlords and tenants in maximising benefit entitlement so that tenants have enough income to pay the rent.
The bedroom tax is a major breach of that joint interest- potentially setting landlords against tenants. As someone who works freelance I have more power than most, and I’ve told my clients that I will not work for organisations that do mass evictions, but the position of those in employed posts is more difficult.
Here is an article I have sent to my briefing subscribers. I would be interested in your comments, by email or otherwise.
RESPONDING TO THE BEDROOM TAX
There has been a lot of focus in the housing trade press about the hapless One Vision Housing Association, who sent out a legal looking notice for tenants to sign which said “I understand that One Vision Housing can take legal action against me if I fail to pay my rent including any shortfalls as a result of these changes.” Few organisations would be quite so blunt or honest about their intentions.
Amazingly One Vision took this action even though its web site admits that it cannot rehouse all those people affected by the bedroom tax, even if they want to move. One vision is a transfer landlord in Sefton, where the council has added to the agony (and the likely rent arrears) by cutting council tax benefit so that even the very poorest have to pay 20% of their council tax.
But it is clear that the beginning of April, which marks a clear step up in the war against the poor, with the cuts in council tax benefit complimenting cuts in housing benefit, represents a point at which housing organisations have to decide whose side they are on. Is it your problem or a problem for all of us?
One Vision and others have made their decision. The organisation intends to survive and thrive at whatever cost to tenants. They are not alone. The same edition of Inside Housing that reported this contains an article by a solicitor on how to effectively use ground 8, which results in mandatory repossession for rent arrears which is obviously prompted by the tax.
But there are other responses. Just down the road from One Vision’s base, Jon Lord, CEO of ALMO Bolton at Home, is quoted as saying “I know my unease is shared by others in the housing world, but where is the protest? Where is the anger?”
Well, perhaps it’s time we created some. Here are some ideas to get you started.
• In England, you can join the English National Housing Federation’s campaign. Email .(JavaScript must be enabled to view this email address). In Wales and Scotland support any action by your national organisation.
• Put out press releases about how your organisation is being affected by the tax.
• All councils run by the SNP and the Green Party have said that they will not evict tenants whose arrears are solely down to the bedroom tax. See if you can persuade your organisation to make a similar commitment.
• Support individual residents who want to tell their story by sending out press releases about their situation. The media always likes personal stories. Local media will rarely do a hatchet job on individuals, although the national media need watching. Send copies of these stories to the MP’s who represent the affected tenants.
• Support and fund tenants associations and other organisations that are opposing the tax. If you do not have a tenant’s association perhaps now is the time to promote one. If you are in Scotland the Scottish Parliament has voted money which can be used to fund this sort of activity.
• If no one else is starting a local campaign maybe you can convene a meeting to start one.
• Consider reclassifying your properties, although be aware that what you say is not definitive- since the regulations refer to the actual number of bedrooms rather than the definition by the landlord.
• Consider locking off any “spare” bedrooms, with the agreement of the tenant, so that the tenant cannot use them. It seems to me that they cannot be counted as bedrooms. The tenancy agreement would obviously have to be amended.
• Although you have to chase rent arrears and cannot have a blanket policy of writing them off, you can avoid mass ground 8 evictions. You do have a degree of discretion over how far you pursue rent arrears. I’m not going to work for any organisation that goes for mass ground 8 evictions. You may not be in a position to do the same, but I think you can announce your clear opposition.
The bedroom tax is so manifestly unfair that it could turn into this government’s poll tax. There is an election coming up comparatively shortly and there is a history of getting measures like this repealed after they are implemented.
As the downgrading in of a number of association’s credit ratings in the light of welfare reform suggests that either landlords and tenants hang together or they all hang separately.”
[ Edited: 4 Apr 2013 at 12:49 pm by chris smith ]There are no problems that I can see from a housing law point of view. Parties to a contract are free to vary its terms with mutual consent as long as those terms are fair. However, apart from the occupancy point that Tony raises, there is also the danger that varying a tenancy in the way described, if it creates a new liability, could be seen as attempting to take advantage of the Housing Benefit regime.
I’m not sure about these…:
- Consider reclassifying your properties, although be aware that what you say is not definitive- since the regulations refer to the actual number of bedrooms rather than the definition by the landlord.
Steve Webb to parliament: “The removal of the spare room subsidy will take account of the number of bedrooms as designated by the landlord. The number of bedrooms within a property is a matter between the landlord and tenant” (Hansard HC 11/03/13 Col 100W).
I’m a landlord with a four rooms, plus a kitchen and bathroom. Depending on where I’m letting it (affluent or poor areas) and on how much rent I might get for it, I could chose to either let as a three-bedroom house or a 2-bedroom house with study. Therefore, what Steve Webb says is absolutely correct.
However, by saying this he has effectively given an open invitation to landlords to redesignate bedrooms as other rooms if they want. But if they do, I fail to see how the govenment can NOT do anything about it. It would make an even bigger mockery of the whole principle of introducing the rent restriction and if LA’s don’t pursue successful appeals about the definition of a bedroom then I would certainly expect the rules to be eventually changed to match LHA.
- Consider locking off any “spare” bedrooms, with the agreement of the tenant, so that the tenant cannot use them. It seems to me that they cannot be counted as bedrooms. The tenancy agreement would obviously have to be amended.
On the face of it it seems a nice idea, but…
1) Presumably, the amendment of the tenancy agreement would include a reduction in the amount of rent payable for the loss of occupation of that room. In which case the HA is no better off and would probably do better to write off the bedroom tax loss rather than incure the expenditure of bricking up a doorway (‘locking’ a room will not stop the use of it - unless it’s permanent).If the rent is not reduced then it’s a backdoor rent increase. In which, the sharp local authority may decide to restrict the rent under general powers (reg B13(4)) and again, that leaves the HA and the tenant no better off.
2) From the perspective of the ‘under occupany’ aspect of the social sector rent restriction, this would create a rather bizarre situation. The client is not penalised for under-occupying, but the under-occupation remains and is in fact cemented in to the building.
I know nothing about housing law, but my gut is saying this is a really bad suggestion.
Tony-
When you say that locking a door will not stop the use of it, where does this suggestion come from? It seems to me that legally the tenant has no use of the room. In practice it could well be that the tenant would break the door down, but landlords would make clear to the tenant that if they did this then the bedroom tax would apply.
Why would a local authority use its discretion to use the general powers, especially if they themselves were the landlord? Most HB offices hate the bedroom tax.