In February 2023 Shelter reported on the Court of Appeal decision in Baptie v Kingston upon Thames which concerned homeless applicants who had been evicted from their homes due to the non-payment of rent.
The court concluded that the local authority had to determine whether the rent was one that the applicant could afford. That depended on the tenant's available income that could be paid in rent after the deduction of "reasonable" living expenses. In the context of an affordability assessment, the "reasonable living costs" of an individual or household were the sum they reasonable needed to provide the necessities of life to a minimum standard (see paras 46-47 of judgment - here).
Therefore, if a local authority finds that a homeless applicant’s living expenses went beyond providing the necessities of life to a minimum standard, it might try to argue that this was the reason that they fell into arrears and, as such, they made themselves intentionally homeless.
Why is this important?
Many landlords have used the section 21 procedure to obtain possession of their property as an alternative to using fault-based grounds; whether rent arrears or other fault based grounds. There are two principal reasons for using this route. It is cheaper and, in most of the cases I have dealt with over the last 25 years, the landlord is more concerned with obtaining possession than trying to obtain a CCJ against a tenant. The result is that the tenant, who may not then able to secure other private sector accommodation, is able to approach the local authority to ask to be rehoused because they have been made homeless on non-fault grounds. In other words, the benefit of using section 21 is that a tenant will not be subject to the question of whether they have made themselves intentionally homeless and they can be rehoused by the local authority.
However, once the Renters Rights Bill comes into force as an Act, section 21 will no longer be available and landlords will have to use fault-based grounds. There are two immediate consequences that will, in all likelihood, have a serious adverse effect on tenants. Firstly, with section 21 notices no longer an option, landlords in the private rental sector will undertake far greater due diligence before making an offer to a tenant who has been evicted and private landlords will probably avoid letting to a tenant who has been evicted on fault-based grounds.
Second, this leaves the tenant looking to the local authority for accommodation and if the eviction has been on a fault-based ground, the local authority may say that the tenant has made themselves intentional homeless and as such it has no obligation to rehouse. As Local Authorities come under ever increased pressures, with more applicants and less housing stock, this may be an argument that they choose to raise in order not to be in breach of their statutory obligations. For a tenant that finds themselves in this situation the consequences are likely to be devastating as neither the private nor the public sector will house them.
New laws often have unintended consequences, but this consequence is clearly foreseeable. Unfortunately, these consequences are going to hurt those that are the most vulnerable.