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CONSULTANCY CORNER - BENEFIT BREAK-UP

Question.

Our client’s tenant has disappeared and left a woman living in the property. The woman claims to be the tenant’s partner, but she is not named on the tenancy agreement.  No notice has been received to end the tenancy.  The lady living in the property wants to stay in the home but the Department for Work and Pension are saying they cannot pay her local housing allowance because she is unable to produce a tenancy agreement in her name.  Our client says he does not want to accept rent since he does not want to create a new tenancy.

Answer.

This is a difficult case since the couple are not married and the tenancy is just in the partner’s sole name.  If the couple were married she would have an automatic right to stay in the home under s30 Family Law Act 1996.  Similarly if she had had a joint tenancy the presence of just one tenant in the home would have been enough to sustain the tenancy, and she would have the right to pay rent.

However the case is not quite as hopeless as it first appears.  There are two parts to the answer.

Can the person left in the property claim Housing Costs Element (HCE) of Universal Credit?

Yes! Under the Universal Credit Regulation Schedule 2 the following people must be treated as liable to pay rent, (and therefore claim HCE) even when she is not liable:

  • The partner of a liable person
  • The former partner of the liable person who has to make the payments in order to continue to live in the home because the liable person is not doing so.

What is the effect of the partner paying the rent?

Our client is clearly worried that if he accepts rent from the partner who is still in the home he will be creating a new tenancy.  The payment of rent is one major element indicating the creation of a tenancy, the other two being a term certain and exclusive possession.  This is the basis of a famous decision in Street v Mountford.

However there is an additional element to creating a tenancy, namely there has to be an intention to create a tenancy or to whether the agreement confers on the occupation exclusive possession.

In this case there is a fundamental problem, namely how can there be an intention to create a new tenancy when the tenancy of the partner has not been ended.  The mere fact that the tenant has left does not indicate that the tenancy has ended by way of a surrender.

Surrender is another way of ending a tenancy without a formal written notice being given by the tenant.  A surrender is only effective if it is an unequivocal act on the part of both the tenant and the landlord.  Since our client is clearly disputing the ending of the partner’s tenancy there has not been an unequivocal act of surrender and the partner’s tenancy is still in existence.

In addition it has been held that where the occupier remain in the home after the tenant has left but the landlord accepts the money for the remaining occupier the money is not considered rent but rather damages known as mesne profits, or may be referred to as occupation payment or charge.

Landlords

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