The Court of Appeal's decision in the case Alexander-David -v- London Borough of Hammersmith and Fulham (2009) EWCA Civ 259, provides local housing authorities (LHA) with some practical and approved suggestions for dealing with the conflict which arises between the statutory duty under Part 7 of the Housing Act 1996 to accommodate 16 or 17 year olds, and possession of a property let to a homeless 16 or 17 year old on its standard tenancy agreement.
Under the Law of Property Act 1925 ("the 1925 Act"), minors are not capable of holding a legal estate in land. Therefore, by virtue of paragraph 1(1) of Schedule 1 to the Trusts of Land and Appointment of Trustees Act 1996 ("the TOLATA"), any purported grant of legal estate to a minor will not effectively pass the legal estate but will instead operate as a declaration that the premises will be held in trust by the local housing authority (LHA) for the applicant.
In this case, the problem arose because the LHA's standard form of tenancy agreement does not expressly address the appellant's inability to hold a legal estate, and consequently, does not purport to do anything other than grant her such an estate.
The court held that the LHA held the premises in trust for the appellant and therefore could not lawfully destroy the subject matter of the trust by serving a notice to quit on the appellant.
The service of a notice to quit by a trustee who is also a beneficiary under a trust and who conceives it to be in his/her best interests to serve the notice, is not to be equated with the service of a notice to quit by a trustee who holds the property on trust for another person.
Therefore, allowing the appeal and quashing the possession order granted to the LHA in this case, the court held that service of a notice to quit only on the minor beneficiary of the trust was not sufficient to terminate the tenancy that was being held by the LHA as trustee on her behalf.
The court acknowledged the practical consequences for LHAs following this decision and made some practical suggestions:
- it is not enough to describe an agreement as an agreement in order to grant a licence to avoid the creation of a tenancy if the LHA allows an applicant to have exclusive possession of residential premises for a term, and does not provide any attention or services. On this point, the court referred to the case Street v Mountford (1985) AC 809, where it held where residential accommodation had been granted for a term at a rent with exclusive possession, the grantor providing neither attendance nor services, the consequence was the creation of a tenancy. Accordingly, on its true construction, the agreement between the parties, notwithstanding the use of the word "licence", had the effect of creating a tenancy.
Therefore, a LHA may wish to consider, based on the fact the minors are likely to require support and assistance going beyond simply accommodating them, coordinating its housing duties and social services duties. This could be done by making provision in the agreement for some attention or services, or by permitting inspection of the premises by those charged with the child's welfare, and thereby preventing the grant of exclusive possession. Any agreement with a 16-17 year old should not merely be expressed to be a grant of licence but should be an actual grant of licence rather than a tenancy.
- to enter an agreement to grant a lease for the period until the applicant turns 18, rather than the grant of a lease, and;
- in any agreement to provide accommodation to a minor, the inability of that minor to hold a legal estate must be expressly recognised within the agreement, clearly stating that as the applicant is a minor, the LHA is not granting a legal estate but is instead securing that accommodation by granting something other than such an estate.