Tenants facing possession proceedings may be granted a stay of execution if stock transfer intervenes before a court has the chance to grant an order.
In a joint test case on Wednesday, the Court of Appeal ruled that post-transfer registered social landlords could not simply inherit active court proceedings from councils. The cases – Knowsley Housing Trust v Revell and Helena Housing Ltd v Curtis – arose after tenants challenged the right of a transfer RSL to "step into the shoes" of a council that had a list of active proceedings at the time of transfer.

The court held that, because transfer converts secure tenancies to assured tenancies that provide different degrees of protection to tenants, RSLs could not expect to be substituted for the council in possession proceedings. Judges also dismissed an argument from the claimants that housing associations could be trusted to continue with only those proceedings where tenants faced no risk of prejudice.

A spokesperson for the National Housing Federation said: "Both cases are clearly unique and it would be prudent not to generalise from these specific cases. The implications of the ruling will need to be examined to assess its implications."

But according to legal sources, the decision will force RSLs to choose whether proceedings should be continued with following transfer.

Sources added that RSLs will now be forced to "pause for reflection", knowing that they can no longer cash in on the legal work done by councils before transfer.

Source

Housing Today