Council’s pre-payment condition for housing repairs grants ‘not unreasonable’

A judge in the Court of Session refused a petition for judicial review by Masroor Hussain, who argued that the respondent Glasgow City Council, in imposing a pre-payment condition as a term of grant assistance, was “ultra vires” of its powers in terms of Part 2 of the Housing (Scotland) Act 2006.

Lord Mulholland heard that the petitioner co-owned a flat in Govanhill, Glasgow, with his wife.

Following a survey of properties in the area the council served a notice listing certain works which required to be carried out to the fabric of the tenement building in Langside Road, which it considered to be “substandard” and “in disrepair”.

The petitioner, together with the other owners of the flats, submitted a proposed voluntary scheme of repairs to the respondent in March 2012 with a view to obtaining a grant for part of the costs of the repairs, but the council decided it was not suitable for grant purposes and instructed repairs through a statutory contract.

However, the respondent advised the petitioner that it would be prepared to offer grant assistance for the cost of the repairs.

The petitioner qualified for the means tested 75% grant, which was approved in November 2012, subject to the condition that failure by to pay his 25% share of the cost of repairs by the time the final account was agreed would result in the grant being removed and he would be liable for the full share of the costs of the repairs.

A letter from the respondent to the petitioner advising him of the likely costs stated that his contribution would be £15,884.89, but following the completion of the works the final account issued by the contractors in May 2015 stated that the petitioner’s contribution was £21,360.89.

The council refused a request for time to pay and imposed a deadline, warning that failure to pay the contribution by that date would result in the respondent issuing an account for the full cost of the works and therefore the petitioner would be liable for his full share of the cost amounting to £84,923.56.

For the petitioner it was submitted that while Part 2 of the 2006 Act made reference to certain conditions which may be imposed by a local authority when issuing a grant or loan for housing repair assistance, nothing in Part 2 allowed the council to impose a “pre-payment condition” for a grant.

Such a condition was “contrary to the policy objective” of part 2 and was not mentioned in the council’s policy statement on assistance.

It was argued that as the respondent had made a decision to award the petitioner a 75% grant for the cost of repairs, it could not be withdrawn on the basis of the imposition of a condition which was ultra vires.

The council submitted that the pre-payment condition of the grant was intra vires, being permitted in terms of sections 74(4) and 81(1)(d) of the Act and that its purpose was consistent with Scottish Government guidance for local authorities.

The judge observed that while it was “certainly the case” that the conditions referred to in Part 2 of the Act did not include a pre-payment condition, nor was such a condition referred to in respondent’s policy statement, Part 2 did not prescribe the only conditions that could be imposed by the local authority.

Lord Mulholland said: “Section 71(4) expressly states that assistance may be provided on such terms as the authority thinks fit. This wide power is qualified only by reference to it being subject to any provision about such terms made by or under this part of the Act. I read this as meaning that where the local authority considers it appropriate to provide assistance on terms which are covered by Part 2 of the Act then those terms are subject to the provisions on such conditions set out in the Act.”

The judge added that a local authority could not impose any condition it thinks fit.

“Conditions must be reasonable, rational and consistent with the legislation,” he said.

Lord Mulholland’s written opinion stated: “In the present case it seems to me clear that the pre-payment condition is consistent with the underlying purposes of the Act as set out in the Scottish Government’s statutory guidance for local authorities. It is also consistent with the respondent’s statement of assistance in respect that the pre-payment condition is made in relation to the 75% grant covering the cost of the petitioner’s share of the housing repairs.

“Without the respondent underwriting the costs the repairs would not have been carried out. This certainty allows the architect and contractor to proceed and the term ensures that at the time of payment for the works the respondent was in receipt of the full cost of repairs. This in turn ensures that the respondent was not financially liable out of its own limited budget for housing repairs for the owners’ shares with no certainty as to when the money would be repaid to it.

“Given that the petitioner, having been means tested, had been awarded the maximum grant available, subject to the pre-payment condition, he has had two years prior to the final account being agreed to pay his 25% of his share of the cost of repairs. It is also the case that he cannot be unaware of the pre payment condition well in advance of the date on which payment was due.

“I therefore hold that the imposition of the pre-payment condition was reasonable in the circumstances and was for a purpose related to Part 2 of the Act.”