Judicial Review of allocations to transfer applicants

A recent Northern Ireland High Court decision provided important judicial interpretation on the Housing Selection Scheme rules and the allocation of housing to transfer applicants. The decision has already affected a number of our clients and impacted on how social landlords manage allocations.  Solicitor Chris McGrath outlines the case.

Background to case

The Applicant (JT) brought judicial review proceedings when St Matthews Housing Association (SMHA) and NIHE failed to offer him accommodation at newly constructed properties at Mountpottinger Police Station.

JT had been awarded full duty applicant status in December 2012 and was on the housing waiting list with 330 points, including 200 intimidation points. In January 2013 JT was the highest pointed applicant for a 2 bedroom property in the area. On 29 January 2013, JT was offered accommodation at Perry Court. The offer was rejected that evening as being unsuitable.  On the same day, allocations were made in respect of the properties at Mountpottinger Police Station. Due to the earlier offer of accommodation, the applicant was not on the waiting list at this time, pending his decision to accept or reject that offer.

The three applicants who were allocated properties at Mountpottinger were all transfer applicants.  They were:

• K, a SMHA board member with 112 points,
• Mrs McG, with 90 points and
• Mrs X, a niece of another SMHA board member, with 34 points.

Justice Horner stated: “The points system under the Scheme is intended to measure need. The Applicant, with approximately three times the number of points as K, four times the number of points as Mrs McG and ten times the number of points as Ms X, could reasonably have anticipated a successful application for a two bedroom apartment at the PS.”

The judgment criticised SMHA for their failure to declare apparent conflicts of interest, and found the allocation was “not fair or equitable.”

However, SMHA’s apparent intention to prioritise transfer applicants in the allocation of properties at Mountpottinger received the greatest judicial scrutiny and has resulted in changes to the Housing Selection Scheme Rules.

The Housing Selection Scheme

The selection scheme has been in effect since November 2000.  It comprises the rules which govern all housing assessments and allocations.  SMHA was a landlord participating in this scheme.

Rule 46 (The General Rule) of the Scheme states: “All applicants will be assessed and placed on a Waiting List which is used by all Participating Landlords. As a general rule each dwelling will be offered to the relevant Applicant with the highest points.”

Rules 71 and 72  deal with transfers and the general principles to be considered when making allocations to transfer applicants.

SMHA's interpretation and implementation of the Rules was the key ambit of the judicial review.

Issues considered by the Court

Two aspects of the Scheme received detailed consideration by the Court:

1. Sequential or Simultaneous Approach? Should the person with the highest points be entitled to be offered one vacant property at a time or should he be offered a selection of various vacant properties at the same time to consider?
2. How does the General Rule, (that the highest number of points should determine who is offered a vacant property), fit with the right of the landlord to consider transfer tenants who are in occupation of other dwellings. The Court referred to this as the ‘transfer applicant issue.’

Sequential or simultaneous approach?

NIHE operates a sequential approach when offering accommodation. This means the applicant is temporarily removed from the waiting list while he considers the offer made.

NIHE submit that this approach is “more practical, less wasteful and fairer.” The Court agreed and rejected the claim that the sequential approach was unlawful or unfair.  The Court felt that a simultaneous approach would produce an “unworkable, impracticable and inconvenient system.” SMHA did not err in this aspect of the procedure.

Transfer applicant issue

This issue was much more contentious. Social landlords can depart from the general rule under Rule 48 of the Scheme, when an applicant has “special and specific needs”. A social landlord may also rely on Rules 71 and 72 to transfer tenants who have Management Transfer status without reference to their points’ level.  Management Transfer status can only be given to Full Duty Applicants.

Mrs X was not a management transfer; she was not even a full duty applicant. As the Court stated, “Mrs X’s selection can only be justified on the basis of a policy of prioritising transfer applicants.” SMHA’s internal correspondence evidenced that their policy for allocating units at Mountpottinger was to prefer transfer applicants.       

Justice Horner was unequivocal in stating that the process by which the properties at Mountpottinger were allocated was “not fair” and “unlawful.”

“The decision to prioritise transfer applicants was not in accordance with the Rules of the Scheme. It was also not in accordance with the Guidance Manual. Such a policy unlawfully fettered the discretion of SMHA. Each application should have been considered on the basis of the Rules of the Scheme and not by having a blanket policy of giving preference or priority to one type of candidate.”

In granting relief, it was noted that Mrs X had not taken up residence in the Mountpottinger property or signed a tenancy agreement. The Court remitted the matter back for consideration to SMHA, so that the decision could be reconsidered and a decision reached in accordance with the ruling of the Court.

Consequences of decision and Impact on Social Tenants

NIHE issued guidance to all housing providers to suspend new allocations and not to proceed with outstanding transfer allocations, unless the applicant had the highest points on the waiting list, or they were an exceptional case under Rule 48. NIHE appeared to believe a review of the Rules and their practices was required to take account of the judicial review decision.

This meant that some social tenants, who had been offered specific properties but had not yet moved in or signed a tenancy agreement, had to remain in unsuitable accommodation.  This caused great concern and uncertainty among these applicants who were told that their offers may be withdrawn. The period of suspension seemed to result in a slower turnover of housing stock.

As a consequence of Justice Horner’s decision NIHE has now implemented additional Selection Scheme Rules.

Rule 56A has been added to deal with the issue of sequential offers. It states:

“The entitlement to receive a maximum of three reasonable offers or any offer of accommodation does not confer an entitlement to receive simultaneous offers. For the avoidance of doubt, the Applicant will not be considered for accommodation while they are under an offer of accommodation.”

This additional Rule is simply ratification of a long established principle, which the Court confirmed was the only practicable and workable way of implementing housing allocation.

Rule 46A has now been implemented in addition to the General Rule:

“Offers of accommodation made to Transfer Applicants under and pursuant to Rules 71 and 72 are an exception to the general rule set out in Rule 46.

For the purpose of this Rule and Rules 71 and 72 Transfer applicants mean ordinary transfer applicants and management transfer applicants.”

The rule change meant that any allocations which have been started but not completed were reviewed to ensure they met the amended rules.  As a result, a number of preliminary offers of accommodation were withdrawn from transfer tenants.  

Reaction to this judgment

Questions have been asked in response to this judgment:

• Was it fair to implement the new rules retrospectively?
• Will the new rules make it harder for transfer applicants to move out of unsuitable accommodation?

While the issue of fairness may need to be investigated more thoroughly, it does not appear to be NIHE’s intention to make the transfer process more difficult.  Rule 46A appears to clarify how the Selection Scheme allows them to allocate a property to transfer applicants under Rules 71 and 72 in parallel with offers to housing applicants.

The Selection Scheme continues to emphasise that the points’ level alone should not be the only determining factor when considering a transfer allocation. Allocations through the transfer process remain essential for good housing management, particular as transfers can free up social accommodation for other applicants.

The new rules are an affirmation of previous practice. The existing Rules were not deemed by the Court to be unlawful.  Rather, the Court found they had been wrongly and unfairly applied.

The Court’s decision has provided judicial clarity as to how the Selection Scheme should be implemented. The allocations at Mountpottinger showed, at the very least, a misinterpretation of the Rules.  The necessary checks and balances had failed.

We hope that this decision and the subsequent clarification by Rule 46A and 57A will result in a renewed focus on fairness when allocating housing.