The federation, advised by solicitor Trowers & Hamlins, has urged its housing association members to send a set-text letter to all tenants on the vexed issue of rent increase notices.
But lawyers at Devonshires criticised the letter, which informs tenants: "We may have increased your rent without complying fully with the rules that regulate rent increases".
Last year it emerged that some rent increase notices unknowingly deviated from the official version, rendering them illegal. The news sent shock waves through the sector at the thought of losing hundreds of millions in rental income, and sparked a test case involving Network and East Thames housing associations.
The letter informs tenants they can pursue litigation, but it warns their landlord has "good grounds for defending claims". The federation explained that it hoped to "contain the problem without litigation" by getting its members to act honestly and inform tenants of any potential wrongdoing.
But Devonshires partner Nick Billingham disagreed. The firm has obtained advice from leading counsel that the dishonesty issue was not a problem, he explained.
"Claims are almost bound to follow if tenants are written to in this way and we do not believe this to be in the best interests of the sector," he warned. "We are also rather surprised that there has not been wider consultation on this advice with the lawyers' group that was previously working with the NHF on this issue."
David Golten of Trowers & Hamlins said: "While not solving the historical problem of whether or not rents have to be repaid, associations can eliminate any possibility of criminal liability and will start limitation on civil claims running by sending the letter."
One housing association insider said he was "braced for a lot of enquiries".
Source
Housing Today
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