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Council entitled to withdraw repairs grant on owner failing to pay share

6 January 2017

A local authority was entitled to make it a condition of payment of a repairs grant for tenement works that a property owner paid their share in full by the tme the final account for the works was issued, a Court of Session judge has ruled.

Lord Mulholland in the Outer House refused a petition for judicial review by Masroor Hussain, seeking a ruling that Glasgow City Council had acted beyond its powers under part 2 of the Housing (Scotland) Act 2006 in imposing the requirement as a condition of grant assistance.

The petitioner and his wife owned a flat in Langside Road, Govanhill. The council had served a notice that it considered the tenement to be substandard and listing necessary repair work. It did not accept a proposed voluntary scheme by the owners and instructed repairs through a statutory contract, advising that grant assistance would be available. The petitioner qualified for the means tested 75% grant, which was approved in November 2012 subject to the condition challenged. His contribution was assessed at £15,884.89. By the time of the final account in May 2015 the petitioner's contribution was £21,360.89. The council refused a request for time to pay and imposed a deadline, breach of which would require the petitioner to pay the full £84,923.56 as his share of the overall works.

For the petitioner it was argued that nothing in part 2 of the Act allowed the council to impose such a condition. It was contrary to the policy objective of part 2 and was not mentioned in the Council's policy statement published in terms of s 72. A decision to award a grant could not be withdrawn on the basis of an ultra vires condition.

Lord Mulholland said that while it was true that a prepayment condition did not appear in part 2 or in the council's s 72 statement, part 2 did not set out the only conditions that could be imposed. The council was given power to impose such conditions as it thought fit, subject to any provision in part 2 or regulations made, which was not consistent with such a limitation.

While conditions had to be reasonable, rational and consistent with the legislation, the prepayment condition was consistent with the underlying purposes of the Act as set out in the Scottish Government’s statutory guidance for local authorities, and with the s 72 statement in respect that the condition was made in relation to the 75% grant: "The imposition of this term is consistent with the desire to encourage owners to accept responsibilities for some of the costs attributable to their property as opposed to their believing that the council would pay the full costs."

Further, it provided the council with some certainty as to payment, allowing the architect and contractor to proceed. "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", Lord Mulholland continued. "I therefore conclude that the pre‑payment term was for a purpose related to part 2 of the Act and was not for an ulterior motive."

The petitioner had known of the condition well in advance of being asked for payment, and its imposition "was reasonable in the circumstances and was for a purpose related to part 2 of the Act".

Click here to view the opinion. 

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