Three appeals were heard together at the Administrative Court – LB of Ealing v Notting Hill Housing Trust; Royal Borough of Kensington & Chelsea v Notting Hill Housing Trust and LB of Hammersmith & Fulham v A2 Dominion Housing Group Limited on 23 January 2015. The cases concerned whether a charitable housing association is entitled to council tax exemption for the void periods between lettings.
The position prior to 1 April 2013
Prior to 1 April 2013 Housing Associations could claim exemption under Class C, as prescribed by the Council Tax (Exempt Dwellings) Order 1992 which merely required “a vacant dwelling which has been such for a continuous period of less than six months ending immediately before the day in question”. After the repeal of this Class, Associations such as A2 Dominion and Notting Hill Housing Trust had to seek exemption under Class B:
“Class B: a dwelling owned by a body established for charitable purposes only, which is unoccupied and has been so for a period of less than 6 months and was last occupied in furtherance of the objects of the charity.”
The Appeal to the Tribunal in March 2014 by A2 Dominion and Notting Hill Housing Trust
Both A2 Dominion and Notting Hill Housing Trust are private registered providers of social housing and exempt charities. In March 2014 they had appealed against refusals by the local authorities to grant them Class B exemptions in 3 cases. The President of the Valuation Tribunal for England had allowed the appeals, finding that the contentious requirement that the last occupation was “in furtherance of the objects of the charity” could be presumed by the fact that A2 Dominion and Notting Hill Housing Trust were charitable providers of social housing.
The Appeal by the Local Authorities to the High Court
The Local Authorities appealed this decision. In allowing one appeal, but dismissing the other two, Mr Justice Mostyn held that the President was wrong in holding that a presumption existed (though he could see the need for one). However he said that the evidence required to satisfy the requirement that the last occupation was in furtherance of the objects of the charity was limited (referred to in the judgment as condition (iv)):
“19. In my judgment a short written representation by the applicant (which might usefully be done on some kind of standard form) which states (a) that based on the material held by the applicant the conditions are met and (b) that the statement is true to the belief of the representor should normally be enough.”
He concluded his judgment as follows:
“35. In the first and third appeals the evidence (regarding the last tenant’s occupation) was only just sufficient to satisfy condition (iv). It would have been better if a little more detail was provided.
36. I repeat that it would be a good idea if a standard form could be devised for Class B applications which would conclude with a declaration of truth akin to that in CPR PD22 para 2.1.
37. I also repeat my view that the Secretary of State should consider promulgating a revision to the Class B exemption which provides for a presumption in relation to condition (iv) where the application is made by a charitable social housing provider.”
In the A2 Dominion matter, the Judge was satisfied that the Tribunal had evidence before it showing that the property was allocated pursuant to the local authority’s duties to homeless people in need and that housing benefit was paid to the last occupier and this was sufficient to satisfy the condition of showing the last occupation was in furtherance of the objects of the charity.
Although the Court declined to uphold the President’s view that a presumption of entitlement arose, the evidence required to be submitted by such associations is limited and does not need to be highly detailed.
Practical considerations of the Judgment
The Judgment does raise practical considerations, namely:
1. When a property becomes void, a Registered Provider is required to provide some evidence about the last occupier of the property. The applicant should consider using a pro-forma document which covers all the requirements to satisfy the Class B exemption criteria which can be used every time there is a void.
2. The rent being paid by the last occupier is key. The Judge accepted in the Notting Hill Housing Trust appeal that confirmation that the tenant was paying a social rent was sufficient evidence.
3. In cases where the tenant is the tenant to whom the property was originally let in furtherance of the objects of the charity but their circumstances have now changed which shows that their occupation is no longer in furtherance of the objects of the charity, the Registered Provider will not be able to apply for the Class B exemption for that void property.
4. Registered Providers should consider lobbying CLG (with the help from the NHF and G15) concerning a revision to the Class B exemption which provides for a presumption in relation showing that the last occupation was in furtherance of the objects of the charity where the application is made by a charitable social housing provider.
For more information, please contact:
Hetal Ruparelia, Solicitor
0207 880 4254
hetal.ruparelia@devonshires.co.uk
