The recent Court of Appeal decision in Saxon Weald Homes Limited v Dayne Richard Chadwick highlights once again that in the affordable sector, effective policies and procedures are key.

The Facts in Brief

Saxon Weald Homes Limited ("SWHL") granted an assured shorthold tenancy to Mr Chadwick on 11 August 2008 on the usual terms that the tenancy would convert into an assured tenancy after 12 months unless SWHL had served a Notice Requiring Possession or commenced proceedings for possession.

Due to unresolved issues with anti-social behaviour, in early August 2009 SWHL's solicitors sent Mr Chadwick a Notice Requiring Possession under Section 21 of the Housing Act 1988 (as amended).  A few days later, a Housing Assistant for SWHL sent out the landlord's standard letter informing Mr Chadwick that the tenancy had converted into an assured tenancy.

SWHL subsequently commenced accelerated possession proceedings, asserting that Mr Chadwick continued to occupy under an assured shorthold tenancy and relying upon the Notice Requiring Possession that had been served.  Mr Chadwick argued that the tenancy had converted into an assured tenancy under the terms of the Housing Assistant's letter and SWHL therefore had no right to possession.

The Deputy District Judge at first instance granted possession to SWHL on the basis that the Housing Assistant's letter had been "sent clearly in error" and was of no effect.  This decision was reversed on the tenant's appeal on the ground that the Housing Assistant's letter amounted to a notice complying with the purposes of paragraph 2 to Schedule 2A of the Housing Act 1988 (as amended) and that it was "quite plain on its face" that the tenancy had been converted into an assured tenancy, thereby preventing SWHL from relying upon the Notice Requiring Possession.

SWHL appealed arguing that Mr Chadwick ought to have appreciated that the Housing Assistant's letter was sent in error.  The appeal was dismissed by the Court of Appeal in late October this year.  In his judgment, Lord Justice Davis stated that a tenant cannot ordinarily be expected to think about a landlord's reasons for serving a notice which is clearly worded.  The Court held that where a notice is quite clear to a reasonable tenant reading it, its terms will take effect.

Lessons to be Learned

The overriding message for RPs/local authorities is to make sure that "the left hand knows what the right hand is doing".  Two minutes spent communicating an update to the rest of the organisation could save up to two years (and maybe more) of litigation.

In addition and perhaps more importantly, RPs/local authorities must ensure that they have robust policies on tenancy conversion and that their staff have a sound understanding of those policies.  Where, for example, a landlord's policy states that it will send out a conversion notice to a tenant and it fails to do so, the tenant may have a valid case for judicial review should the landlord subsequently serve a Section 21 Notice and institute possession proceedings.  All too often the terms of the tenancy agreement will contradict with the relevant policy, again giving rise to a potential challenge by a disgruntled tenant.  As RPs/local authorities should be aware following last year's London and Quadrant Housing Trust case, the risk of judicial review is very real and the implications are significant.

Protect Yourself

Putting in place robust policies and procedures will go a long way to protecting your organisation against challenges by tenants.

Alongside a careful review of your policies and procedures, you should provide your staff with the knowledge and understanding that they need to follow your procedures and policies successfully.