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Pre-payment condition for housing repairs grant “not unreasonable”

A homeowner who claimed that Glasgow City Council had acted beyond its authority by imposing a condition that a home owner was required to pay their share of the cost of repairs to a tenement by the time the final account for the works was issued or be liable for the full costs has had his legal challenge dismissed.

Masroor Hussein (“the petitioner”) had argued in a petition presented to the Court of Session  for judicial review that the Council, in imposing a pre-payment condition as part of grant assistance was acting  ultra vires  of its powers in terms of Part 2 of the Housing (Scotland) Act 2006.

The petitioner owned a flat in Govanhill, Glasgow with his wife.  Following a survey the Council served a notice listing certain works that required to be carried out to the fabric of the tenement in Langside Road which it considered to be “substandard” and “in disrepair.”

The petitioner submitted a proposed voluntary scheme of repairs to the Council in March 2012 with a view to obtaining a grant for part of the costs of the repairs but the Council decided the voluntary scheme was not suitable for grant purposes and instructed the repairs through a statutory contract but 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 to pay his 25% by the time the final account was agreed would result in the removable of the grant thus making him liable for the full share of the costs of the repairs.

The Council advised of the likely costs and advised the contribution would be £15,884.89 but following completion of the works, the contractors’ final account showed the petitioner’s contribution would be £21,360.89.

The Council refused a request for time to pay from the petitioner and imposed a deadline on him to pay his contribution and warned him that failure to comply timeously would result in the petitioner being liable for the full amount of his share of the costs -  a sum of £84,923.56.

In his petition, the petitioner submitted that while Part 2 of the 2006 Act referred to certain conditions which may be imposed by a local authority when issuing a grant for housing repair assistance nothing in Part 2 allowed the Council to impose a pre-payment condition for a grant.  He argued that same was contrary to the policy objective of Part 2 and not mentioned in the Council’s policy statement on assistance and as the Council had made a decision to award the 75% grant, it could not be withdrawn on the basis of a condition that was ultra vires.

The Council argued that the pre-payment condition of the grant was permitted in terms of sections 71(4) and 81(1)(d) of the Act and that its purpose was consistent with Scottish Government guidance for local authorities.

The judge, 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.”

However,  the judge added that the local authority could not impose any condition it thought fit and same had to be “reasonable, rational and consistent with the legislation.”

In Lord Mulholland’s written opinion he 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 (i.e the Council’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 certainly allows the architect and contractor to proceed and the terms ensures that at the time of payment for the works the respondent was in receipt of the full cost of the 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 the 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.”

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