Think Tank

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Cracked rent restructuring

I am a council tenant who has occupied the same property for 30 years. It was a new house but, shortly after we moved in, cracks began appearing in the walls, floors and ceilings. The council undertook some underpinning of the foundations but, because of subsidence, the cracks are still opening and closing. My walls have glass "tell-tales" [which measure whether cracks are widening] and surveyors' masonry nails sticking out of them.
Since rent restructuring in April 2003, 30% of my rent is based on the value of the home but, because the defects were not reflected in the assessment, I am charged the same as tenants on my estate who live in non-defective houses.

The council has finally agreed to revalue the house but I would be bound by any revaluation – even if it results in my rent staying the same or increasing. Is it right that I get forced into this financial gamble?

The tenant should ask for compensation for the loss and inconvenience, and for ongoing compensation (a rent rebate) as long as the problem lasts. Much will depend on surveying evidence but, assuming subsidence is affecting the structure, the council will be in breach of its repair obligations if the problem is not addressed.

Even though extensive monitoring may be needed before a decision is made on whether to underpin foundations, these long periods of monitoring sound unreasonable. Tell-tales and masonry nails should not be permanent features of any home.

Any claim for compensation would be subject to the Limitation Act, which means the tenant could only claim for six years up to the date of issue of any claim. However, the tenant could also make a claim for a court order for works to resolve the problem. As long as the problem remains unresolved, the tenant would be entitled to compensation.

A properly formulated claim might have more of an impact than an attack on rent restructuring.

Nick Billingham, Partner and head of housing management litigation at law firm Devonshires

The tenant can appeal against the valuation but there would be no guarantee that the valuation would be decreased. The rent restructuring valuations are set at a 1999 value so any deterioration or improvements made after this date cannot be reflected.

Valuations for rent restructuring are relatively broad-brush – and are more affected by location than the condition of the property. In this case, it would depend on how serious the subsidence was in 1999. The valuation has to alter considerably to have any significant effect on the rent charged.

Given that the restructured rent calculation is to a set formula, the tenant could work out what risk he was taking and how much the valuation would have to change to significantly affect his rent.

Nick Murphy, Executive director, of housing, communities and regeneration at Southampton council

A Charity Commission reply

In response to the recent question "Crisis of faith for RSL" (18 June, page 39), charities must abide by their objects. If a provision appears discriminatory, the charity should take legal advice on whether it would be unlawful to comply with it. If it was lawful but the trustees still felt it discriminatory, we may be able to remove it if it operates against the charity's interests.

Under current law, a charity can be established to provide housing only for aged and distressed Roman Catholics. A charity can also be established to provide housing only for aged and distressed people who are not Roman Catholics. Either way, trustees must take reasonable steps to comply.

On the issue of checking whether beneficiaries continue to be eligible, much depends on the circumstances. If a beneficiary has an assured tenancy, that can be taken as a sign of continued eligibility. In many cases, it may be sufficient to tell beneficiaries they need to report a relevant change to the charity. Trustees need to ensure, as far as reasonably practical, the charity is not continuing to provide housing to individuals who are not entitled to benefit.

If the trustees are dissatisfied, details of our complaint procedure are available at www.charity-commission.gov.uk.

Rosie Chapman, director of policy and strategy, Charity Commission for England and Wales