Decision Summary Information

Back to Results | Search Again | Most Recent Decisions

Neutral Citation Number:	2010 UKUT 262 AAC
Reported Number:
File Number:	CJSA 2746 2008
Appellant:	Secretary of State for Work and Pensions
Respondent:	UP
Judge/Commissioner:	Judge J. Mesher
Date Of Decision:	26/07/2010
Date Added:	16/08/2010
Main Category:	Jobseekers allowance
Main Subcategory:	housing costs
Secondary Category:	Income support and state pension credit
Secondary Subcategory:	housing costs
Notes:	Reported as [2011] AACR 12. Housing costs – long tenancy – rent payable under Ijarah method of financing house purchase – whether qualifies for housing costs The claimant became entitled to income-based jobseeker’s allowance and at the end of the statutory waiting period of 39 weeks asked for housing costs to be taken into account in the calculation. He was making payments under the Shari’a-compliant Ijarah method, by which the bank had purchased the property and granted him a 25-year tenancy while he was obliged to pay rent and “payments on account” with the right to acquire ownership once “on account” payments equalled the purchase price. In March 2007 the decision-maker refused on the ground that no interest was payable. The claimant appealed on the ground that he was making rental payments that were equivalent to mortgage interest. The appeal tribunal in May 2008 allowed the claimant’s appeal and decided that there were housing costs in the form of rent relating to a long tenancy, defined as “a tenancy granted for a term of years certain exceeding 21 years” (Jobseeker’s Allowance Regulations 1996, Schedule 2, paragraph 16(1)(a), and regulation 1(3)). The Secretary of State appealed to the Upper Tribunal, arguing that the arrangement as a whole did not have the characteristic of a long tenancy, but of the acquisition of freehold ownership and that the payments made by the claimant were not rent but mesne profits as in paragraphs 6 and 7 of CIS/14483/1996, and also referring to paragraph 25 of R(H) 3/07, where it was suggested that a lease for more than seven years of registered or unregistered land, even if made by deed, could not come within the definition of a long tenancy (and so payments under it would qualify for housing benefit). It had not been established in the present case what interest, if any, had been registered, but it eventually transpired that the leasehold interest had been entered on the Land Registry property register on 29 June 2009. Section 27(1) of the Land Registration Act 2002 provides that if a disposition of a registered estate or registered charge is required to be completed by registration, it does not operate at law until the relevant registration requirements are met and section (2)(b)(i) includes in the category of dispositions of a registered estate required to be completed by registration “the grant of a term of years absolute for a term of more than seven years from the date of the grant”. Held, allowing the appeal and re-making the decision on the appeal before the appeal tribunal, that: 1. a tenancy that has not been registered as required cannot meet the definition for the purpose of paragraph 16(1)(a) as a “tenancy granted” since the terms of the Land Registration Act 2002 are completely unqualified in providing that a tenancy for more than seven years does not operate at law until the relevant registration requirements are met but will, at most, take effect in equity only: observations in R(H) 3/07 approved (paragraphs 18 to 22); 2. registration has effect only from the date of the application in pursuance of which the entry in the register was made (Land Registration Act 2002, section 74(b)) and so the effect does not relate back to the date of the disposition itself and for both housing costs and housing benefit a payment made at any date can only relate to a long tenancy if one exists at that date (paragraph 23); 3. for the period before registration took effect the tenancy agreement could not have effect as a grant of a long tenancy even if it had been validly executed, but, following the entry in the register, the claimant was deemed by virtue of section 58 of the Land Registration Act 2002 to have the legal leasehold estate, regardless of whether the tenancy agreement was properly executed as a deed or not (paragraph 25); 4. it was quite impossible to say that the entry on the register on 29 June 2009 was made in pursuance of any application earlier than that received on that date and so a long tenancy as defined in the legislation did not exist until 29 June 2009 and the appeal tribunal erred in law in concluding that as at 15 March 2007 the claimant was paying rent relating to a long tenancy (paragraphs 24 and 33); 5. at all times from whenever housing costs could otherwise have become part of his applicable amount down to 15 March 2007 the claimant was not making payments relating to a long tenancy or any other payments that qualified as housing costs for the purposes of jobseeker’s allowance and the existing decision under which his jobseeker’s allowance was calculated therefore did not fall to be superseded (paragraphs 33 and 34).
Decision(s) to Download:	[2011] AACR 12 ws.doc