DEPUTY JUDGE GAUNT:
1. On 8th September 1995, Miss Rebecca Richardson, the Claimant in these proceedings, acquired a shared ownership lease of Plot 6, Deer Hill (now called Crondale) Acorn Ridge,
2. The lease was for ninety nine years from 25th March 1995 and Miss Richardson paid a premium of £29,500 for it. That sum represented fifty per cent of the then market value of the house. In addition, the lease reserved a rent of £1,456-odd per annum, subject to annual increase by way of indexation. As shared ownership leases do, the lease contained what are called “staircasing provisions” which enabled the tenant to acquire further shares of the value of the house with consequent rent reductions and, if she so desired, the freehold, once she had acquired a hundred per cent of the shares. Miss Richardson did not take advantage of the staircasing provisions.
3. In May 2003, Winston Robinson, Miss Richardson’s husband, was sentenced to eight years imprisonment. I was told that some of his criminal associates later threatened Miss Richardson and her family and, as a result, she had to leave
4. It seems, however, that the Department of Health and Social Security will only pay benefit for a limited time, namely, fifty two weeks, in respect of premises from which the person claiming benefit is temporarily absent and will only grant an extension in special circumstances. In February 2005 the payment of benefit stopped. Miss Richardson appealed but her appeal was ultimately rejected on the basis that the circumstances had not changed and that she was, in effect, permanently unable to return home to
5. Accordingly, in August 2005, she decided that she would have to sell the house. She got in touch with the Defendant housing association and, on 30th August 2005, wrote to them instructing them, as she put it, to sell Crondale and saying that she could not market the property personally “due to safety issues.”
6. The housing association then had the house valued at £151,000 and sent Miss Richardson a form to indicate her agreement to a sale at that price which she duly returned. Her understanding was that the housing association would put the property on their list and that it would readily find a buyer. Because she was not able to be there so as to show potential buyers round, the housing association suggested she instruct local agents, which she did, but the property apparently did not sell. This may have had something to do with the state of repair and decoration which the housing association later had to attend to because the house had suffered a degree of vandalism in Miss Richardson’s absence. I did not, however, have any evidence about why the house did not sell.
7. The arrears continued to grow and, on 25th October 2005, the housing association issued proceedings for possession. I was told that the arrears amounted to sixteen months’ rent. It was more than sufficient to justify a possession order under Case 8 in Schedule 2 to the Housing Act 1988. It is, of course, a requirement of the making of an application for such an order that the Defendant be first served with a notice under section 8 of the Act in the prescribed form, informing the tenant that the landlord intends to bring proceedings for possession of the dwelling house and the grounds upon which he intends to do so and telling the tenant the time limits within which such action will be brought. This is to give the tenant the opportunity to make arrangements to correct the situation and avoid proceedings and the subsequent consequences. Such a notice was given in this case on 15th September 2005.
8. On 5th January 2006, the case was heard by District Judge Chapman. The claim for possession was based on the mandatory ground in Case 8. The district judge found the case proved and ordered Miss Richardson to pay £3,009 for rent arrears and the Claimant’s costs, assessed at £1,254. He refused Miss Richardson’s request for an adjournment and for a transfer to [location withheld] – I should say her written request because she was not present in person – on the ground that no defence had been filed or served. Miss Richardson had, indeed, written to the court to the effect that it would not be safe for her to come to
9. The present proceedings were begun by Miss Richardson some months later on 5th December 2006. In them she claimed that, as a result of the shared ownership lease and the premium that she had paid, she had acquired a fifty per cent interest in the property. On this basis she asserted that the property (by which I think she meant the freehold) was subject to a trust. She, therefore, asked for a declaration as to the extent of her interest in the property and an order for sale or an account of fifty per cent of the proceeds of any sale.
10. In this court Miss Richardson has been represented by Mr. Paget who has explored every possible legal avenue on her behalf to avoid her losing her valuable leasehold interest.
11. First, he argued that there was a trust. Under judicial pressure, he accepted that Miss Richardson’s leasehold interest was not held on trust by her but he submitted that the freehold was held on trust by the housing association for themselves and her. I am quite satisfied that there is no foundation for that submission. The relationship of the housing association and Miss Richardson was that of landlord and tenant, not that of trustee and beneficiary. It is true that Miss Richardson had the right to lay claim to the freehold but only if she had paid up the other half of the value of the property and exercised her staircasing rights. In effect, she had an option but she did not exercise it. Her proprietary interest was, therefore, simply a leasehold interest. Indeed, she was registered at Her Majesty’s Land Registry as proprietor of that leasehold interest under title number SF356/644.
12. Mr. Paget’s second point, which, to be fair to him, he described as his primary point, depended on the notion that Miss Richardson had two tenancies: an assured tenancy, protected by the Housing Act 1988 and a long leasehold interest vulnerable to forfeiture. He submitted that the order of District Judge Chapman put an end to the assured tenancy but not to the long lease. He also pointed to what he said were procedural defects on the part of the housing association, namely: first, that no notice under section 166 of the Commonhold and Leasehold Reform Act 2002 had been served; secondly, that the box on the claim form labelled “forfeiture” had not been ticked; and, thirdly, that the Practice Direction at CPD 55.2.4 had not been complied with.
13. I must confess to having struggled with the concept that a single lease had created two different but concurrent tenancies of the same premises. Mr. Baker, for the housing association, submitted that it had not and I agree. The lease created a ninety nine year term of years certain. The tenancy thus arising was one to which section 1 of the Housing Act 1988 applied. It was a tenancy of a dwelling house let as a separate dwelling to an individual who occupied it as her only or principal home and it did not fall within any of the exclusions. It was, therefore, an assured tenancy.
14. The consequence was that it became draped by Statute with certain fetters on the exercise of the rights and remedies conferred by the contract. If an assured tenancy expires, the tenant can stay on as an assured periodic tenant. An assured tenancy cannot be determined either by notice to quit or by forfeiture. It can only be determined by a court order. The court is precluded from making an order except on the grounds in Schedule 2. In the case of fixed term tenancies, the court cannot make an order unless:
“(a) the ground for possession is ground 2 or ground 8 in Part 1 of Schedule 2 to this Act or any of the grounds in Part 2 of that Schedule other than ground 9 or ground 16; and, (b) the terms of the tenancy make provision for it to be brought to an end on the ground in question, whether that provision takes the form of a provision for re-entry, for forfeiture or determination by notice or otherwise.”
15. District Judge Chapman, therefore, needed to be satisfied that both those conditions were fulfilled and there is no doubt that he was so satisfied. He had before him both evidence of the arrears and a copy of the shared ownership lease which was appended to the claim form. He also had evidence of service of the section 8 notice on 15th September 2005.
16. I am, therefore, unable to accept Mr. Paget’s suggestion that there were two tenancies, only one of which was determined by the order. There was one tenancy the mode of determination of which was laid down by the Statute and which was duly determined.
17. Nor can I accept Mr. Paget’s three procedural points. As to the first, sections 166 and 167 of the 2002 Act provide that:
“A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment,” which specifies certain things and which is in a prescribed form.
Section 167 provides that:
“A landlord under a long lease of a dwelling may not exercise the right of re-entry or forfeiture for failure by a tenant to pay an amount consisting of rent unless the unpaid amount exceeds the prescribed sum or consists of or includes an amount which has been payable for more than a prescribed period.”
So those sections apply to long leases, as defined in the Act.
18. Mr. Paget very properly referred me to section 76 which defines “long lease”. Section 76 provides:
“A lease is a long lease if it is a shared ownership lease, whether granted in pursuance of the Housing Act 1985 or otherwise, where the tenant’s total share is a hundred per cent.”
There is then a definition of “total share” which is defined to mean:
“In relation to the interests of a tenant under a shared ownership lease, his initial share plus any additional share or shares in the demesne premises which he has acquired.”
19. In this case Miss Richardson’s initial share was fifty per cent. She had not acquired any additional shares and so her share remained fifty per cent and so her total share is not a hundred per cent but only fifty per cent and so she does not fulfil the condition in section 76(2)(e) and her lease is, therefore, not a long lease as defined.
20. There is a second reason why sections 166 and 167 do not help Miss Richardson; namely, that the arrears were too large. They exceeded the prescribed amount under section 167 and, therefore, the fetter, the prohibition in section 167 against forfeiture did not apply anyway, even if the lease had been a long lease.
21. As to the point that the forfeiture box on the claim form had not been ticked, I accept Mr. Baker’s submission that it did not need to be. This was not strictly speaking a claim for forfeiture but rather a claim for possession pursuant to the
Statute and the claim form made that clear.
22. As to the Practice Direction 55.2.4, there were no mortagees or sublessees
here and the name and address of Miss Richardson were stated on
the claim form.
23. That all said, I have found this case troubling. Miss Richardson has had a rough ride in life and has now lost what is probably her only capital asset. Moreover, she lost it in proceedings brought at a time when, to the knowledge
of the housing association, she was actively seeking to sell the house to pay off her debts and the housing association was itself involved in that process. I must say that I find the stance taken by the housing association strange in the circumstances and I have not received any adequate explanation. There may, of course, be many facts and matters in the background that I know not of and so I do not intend to be unduly critical. I simply comment on the timing.
24. I am pleased to record, however, that the housing association have offered to repay Miss Richardson’s original premium, less rent arrears, costs and the cost of effecting repairs out of any sale proceeds and counsel has confirmed to the court that the housing association intend to stand by that offer. But that still means that Miss Richardson will have lost any capital appreciation between 1995 and now, worth about £45,000, which will represent, in turn, a windfall for the housing association.
25. Nevertheless, I have to apply the law. For the reasons given above, in my judgment, Miss Richardson has no interest left in the property since the lease has been determined by order of the court and she is, therefore, not entitled to the relief which she seeks. Her claim must, accordingly, be dismissed.
