Housing Association Benefit & Burden Principle

rm01lp

I’m seeking advice on the following situation we have with our Housing Association:

 

o We live on an estate (all houses, no flats) with a mixture of freehold, shared ownership and housing association properties. 

o For the freehold and shared ownership properties, there is a covenant in the Title Deeds that a “reasonable service charge” is payable for the upkeep of the communal grounds.

o Some years ago the original Housing Association sold the freehold to part of the estate to another Housing Association.

o The sale of this area did not contain a covenant/agreement for the second Housing Association and/or residents to contribute to the service charge.

o Therefore the residents of the sold area benefit from the services paid for by us through the service charge, but don’t contribute towards it.

 

So in summary we have one Housing Association’s residents paying for the upkeep and another not.

Could it be argued our Housing Association have acted against our financial interest by omitting to include a requirement for a contribution from the other Housing Association? Or is there another angle we’ve missed, or perhaps another means of recourse? 

Would the “benefit and burden principle” apply in that a contribution from the other Housing Association should/could be sought?

theartfullodger

And when you asked the new Housing Association to please kindly explain, what reply did you get?  I'd get their view first before starting to argue about it (otherwise you may end up fighting the wrong battle).

The covenant says EXACTLY who to pay the fees to please?  E g. "The freeholder" or "old housing association"?

How much is CEO of new housing association paid? (I'm nosey).  Suspect HA's solicitors will be better qualified and experienced than your solicitor.

rm01lp

It’s more a case of whether the “Benefit and Burden principle”can be applied. 

We don’t have a solicitor. We need to know in the absence of a covenant whether our Housing Association can use the “principle” to obtain a contribution from the other Housing Association. Our Housing Association are not forthcoming on anything and we wish to force the issue but want to know our ground first. 

We have no business in contacting the other Housing Association, they aren’t our problem. 

We need informal advice from someone familiar with the Benefit and Burden Principle. A tough ask but we live in hope!

Alderbank

The precedent set in 1957 in the case of Halsall v Brizell, often referred to as the Benefit and Burden principle, depends very much on the facts of the case.

The prima facie position is that the grantee does not have any obligation to contribute to maintenance. However, this may be rebutted if the facts and circumstances indicate an implied agreement by the user to contribute. For example, if contributions (monetary or physical work) have been made in the past that might suggest an obligation to contribute is implied into the arrangement. However, it will depend very much on the facts.

Imagine that when the estate was built that the HA set up a contract with a window cleaner paid for by all the residents. Most people would agree that after the split the residents of the new HA should have to continue to pay for that window cleaning service because that is a service which they uniquely benefit from, it is not something provided to locals outside the estate.

Estate management is not so clear cut.
Is the Estate a 'gated' community, ie can it only be accessed by residents and their guests?
Are there playing fields, children's playgrounds?
A well known issue is that of children's play areas in the estate. Are they open to anyone or are they restricted to specific residents and their children and guests? By 'restricted' I don't mean just a notice, I mean a secure fence and locked gates.

Where the estate's landscaping, dog walking areas, playgrounds etc. are open to the public it has historically been very difficult to argue that the residents of the new HA have been transferred any specific benefits above those available to anyone else in the locality and therefore very difficult to argue that they should pay for amenities which others who live nearby can use freely.

tl:dr - maybe, maybe not.

rm01lp

The estate isn’t gated and we have no playground areas. The estate wasn’t adopted by Council so the whole landscape is maintained by our Housing Association. There isn’t a dispute that the other Housing Association benefit. 

The other Housing Association have the Freehold to their land. So the situation is that some Freeholders (shared ownership residents who staircased to 100%) pay, yet the other Housing Association who have the same benefit don’t.

rm01lp

I should add the estate has no through traffic and the areas benefited are the shrubbery and grassed areas leading to the various cul-de-sacs - so imagine one Road with a dead end and lots of offshoots.

Alderbank

I don't doubt that residents of the other HA benefit, such as seeing nicely mown grass verges near where they live.
But do they have an exclusive benefit, ie something more than other local people don't have?

When that part of your estate was transferred did your ground maintenance charge increase in proportion since there were fewer householders sharing the same charge or did it stay more or less the same, allowing for inflation?

There is a similar situation on the estate where my daughter lives. The houses were built by a few different builders, about 15 years ago. After they were all sold and occupied it turned out that one builder had not committed to the grounds maintenance scheme so their buyers did not receive quarterly landscaping bills. No-one knew why. There was a little bit of grumbling but nothing has actually happened to change the status quo.

rm01lp

The the other HA had no exclusive benefit but nor do we. It is simply to maintain the communal land on the estate.

From the outset I believe the fee for some reason has just been paid by residents from our HA, It seems that whoever did the sale forgot to include the requirement for a contribution. We just get a letter telling us what the monthly direct debit is. It has only recently come to light that the other HA don’t pay a penny. This was confirmed by our HA after checking the paperwork etc.

eddddy

Presumably...

• The freehold house owners have signed a deed of covenant which determines what service charge they must pay

• The shared ownership leaseholders have a lease which determines what service charge they must pay

Are you (or others) being asked to pay more than their deed or lease allows?  If so, that would be a basis for challenging the amount.

But, if you're essentially saying something like:

• "My deed/lease says I have to pay 5% of the cost of mowing the grass verges. I don't think that's fair because some others pay 0%"

.... then I don't think you've got much of a case.

The legal response is likely to be "When you bought your property, you agreed to pay that 5%. If you didn't like that condition, you shouldn't have bought the property".

Or is there another term in the deed/lease that you think changes the situation?


So I'm not sure how the “Benefit and Burden principle” would be relevant to you.

rm01lp

The deeds just say a “reasonable charge” and not a specific amount. 

Case law etc I’ve subsequently seen would suggest there might be case. Here are a few extracts…

“However, in circumstances where a Deed of Covenant has been missed, all is not lost. The estate management company has the option to either:

1. Pursue the previous owner under their covenant; or
2. Seek to establish the “benefit and burden” principle.”

“The case reinforces the earlier landmark case of Halsall v Brizell (1957), in which the judge stated: “it is ancient law that a man cannot take benefit under a deed without subscribing to the obligations thereunder”.

In modern conveyancing, positive covenants are often enforced by contractual obligations in the transfer and the use of restrictions at the Land Registry. However, where this is not practicable, or where (as is often the case) in older conveyances there is no such mechanism to enforce positive covenants, Goodman and others v Elwood shows the court’s readiness to apply the benefit and burden principle to successors in title if the rights granted are proportionate to the obligation imposed.”

eddddy

rm01lp said:

The deeds just say a “reasonable charge” and not a specific amount. 

So presumably that should be the basis of your claim/complaint.

Your deed says you have to pay a "reasonable charge" - but you believe that you are being asked to pay an "unreasonable charge".  (Does the deed really not say anything about how that "reasonable charge" is assessed or calculated?)


For example, if there are 50 houses on the estate, perhaps your argument would be that it's reasonable that you pay 1/50th of the maintenance charges. 

Maybe get a report from a RICS surveyor to confirm that 1/50th (or whatever) is a reasonable charge.



The other things you mention aren't really anything to do with you. Service charge covenants/agreements between the 2 HAs (and/or other property owners) aren't really any of your business. If your HA want's legal advice on those, they'll probably ask their solicitor.

The only thing that's really relevant to you is the deed you signed, and whether the bill you have to pay matches the deed you signed.