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High Court Clarifies Law on Public Acts of Housing Associations

The High Court recently announced its decision in R (Macleod) v Governors of the Peabody Trust, setting limits on which actions of a housing association are ‘of a public nature’.

In this case, Macleod occupied a property that had been purchased from the Crown estate in 2011 by Peabody, a housing association, by means of a bond issue. Subsequently, Macleod had applied to Peabody to exchange properties with another social housing tenant in Scotland. Peabody signalled agreement to this but later refused the transfer. Macleod then initiated judicial review proceedings against Peabody, arguing that it had unlawfully fettered its discretion.

The leading case on this issue was R (on the application of Weaver) v London and Quadrant Housing Trust [2009] (Weaver), where the court found that providers of social housing were under certain circumstances carrying out functions of a public nature and therefore subject to judicial review under the Human Rights Act (HRA). While the court in Weaver specifically clarified that this did not necessarily include all actions of housing associations, it was not clear where the boundaries of the ruling were. Indeed, prior to Peabody, commentators had noted a distinct lack of cases where housing associations were not found to be exercising a public function.

In this case however, the court dismissed the claim for judicial review, deciding that Peabody’s actions regarding the housing were not of a public nature for three key reasons:

  1. The housing was not “pure” social housing as, though it was offered at discounted rates, some of its tenants were of an income bracket that was well served by the private market.

  2. The houses were purchased on the free market, without the use of public funds.

  3. The court did not find the existence of sufficient statutory regulation or the existence of an allocation agreement to show that the Trust’s work achieved a statutory objective.

While the law in Weaver remains ostensibly unchanged, this judgement is still important for a number of reasons. Firstly it clarifies the limits of the precedent in Wheeler. Secondly, by separating the arrangements surrounding these particular properties from Peabody’s broader role as a social housing provider, the ruling suggests that tenants of the same housing provider could potentially be subject to different standards of protection under the HRA, raising serious questions over fairness.

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