Registered Provider - Public Body, Or Not?

Introduction

The latest decision on whether or not a registered provider (RP) should be subject to judicial review, Macleod v The Governors of the Peabody Trust, sits in harmony with the most significant case on this issue, Weaver v London & Quadrant Housing Trust but reaches a different conclusion on its facts. In this instance Peabody was not amenable to a judicial review and by extension not susceptible to a human rights challenge.

Background

Weaver did not make a blanket decision that all RPs are public bodies in all circumstances of the provision of housing, rather, a distinction was made for the provision of social housing. The court highlighted the following factors which, when considered cumulatively, establish sufficient public flavour to bring the provision of housing within the concept of a public function, ie. social housing:

• a significant reliance on public finance through grants
• working closely with local government assisting it to achieve the authority's statutory duties and objectives;
• the provision of subsidised housing rather than the provision of housing itself;
• acting in the public interest with charitable objectives;
• subject to intrusive regulation on allocation and management

The facts

Mr Macleod was the assured tenant of the Crown Estate Commissioners (CEC). The accommodation was reserved for "key workers", being those employed in the public sector. The rental charge was not a social housing rent but an intermediate sum at no more than 60% of market rent.

It was a term of the tenancy relating to assignment that Mr Macleod would not assign, sublet or part with possession of whole of any part of the premises.

In February 2011 CEC transferred a number of properties to Peabody. The transfer was subject to a Nominations Agreement which restricted Peabody to letting the properties to key workers at a sub-market rent and to accept nomination rights from CEC on any vacant property to provide accommodation to key workers.

In July 2015 Mr Macleod applied to exchange his tenancy with a tenant of another landlord in Edinburgh. Peabody declined the application on the basis that Mr Macleod was not a social tenant and had no contractual entitlement to a mutual exchange.

Mr Macleod sought judicial review of Peabody's decision in declining his application. Among other things Mr Macleod was required to show that Peabody was exercising a public function when it refused to approve the mutual exchange and that the decision itself was not a private law decision. The issue then, was whether Mr Macleod occupied social housing.

Mr Macleod argued that:

• as CEC was and is a public body, Peabody was in the same position as any RP which takes a large-scale transfer of public housing stock;
• Peabody is regulated as private registered provider of social housing and has statutory powers over and above the powers available to private landlords;
• Peabody received state subsidy by way of grants and to separate the properties transferred from CEC is to ignore the realities of the situation;
• Peabody has a charitable status.

The decision

The court rejected the above arguments and in applying the principals in Weaver, found that the cumulative effect of the following factors did not have the sufficiency of public flavour for social housing

• Peabody purchased the properties from CEC using funds raised on the open market, not through grants;
• Although the properties were not at full market rent, the provision of below market rent properties for key workers does not fall within the definition of social housing in the Housing and Regeneration Act 2008;
• Peabody had no allocation relationship with any local authority and was not assisting local government in carryout its public functions;
• Rents for the properties transferred from CEC are not subject to the same level of statutory regulation as social housing in general.

Commentary

Given the finding in Weaver that not all tenants of an RP are social housing tenants and will not have human rights protection this decision is not surprising. However, it does highlight the permeations of circumstances where an RP may or may not be acting as a public body and reinforces the position that this issue is fact specific. Tenants whose landlords are RPs but are not in social housing may now more often fall at the first hurdle.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.