DECISION OF THE SOCIAL SECURITY COMMISSIONER
1.	My decision is as follows. It is given under paragraph 8(4) and (5)(c) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000.
1.1.	The decision of the Ipswich appeal tribunal under reference U/42/134/2001/00788, held on 25th April 2002, is erroneous in point of law.
1.2.	I set it aside and remit the case to a differently constituted appeal tribunal.
1.3.	I direct that appeal tribunal to conduct a complete rehearing of the issues that arise for decision in accordance with the analysis of the law in this decision.
	The local authority has not presented its case in the terms of my analysis. The district chairman may wish to direct the local authority to make a new submission presenting its case in those terms before this case is listed for rehearing.
The appeal to the Commissioner
2.	The case concerns an alleged overpayment of housing benefit. The appellant is the housing benefit claimant. The respondent is Ipswich Borough Council.
3.	This is an appeal to a Commissioner against the decision of the appeal tribunal brought by the claimant with my leave. The local authority supports the appeal to some extent, but not in a way that is to the claimant’s advantage.
The lesson
4.	This case contains a valuable lesson for appeal tribunals. The housing benefit legislation is written in general terms that do not depend on the legal basis of a claimant’s occupation of a dwelling or liability for payments in respect of that dwelling. However, there are cases in which the legal basis is essential to a proper analysis of the case. This case is an example. The appeal tribunal went wrong in law by ignoring the landlord and tenant issues that were essential to a proper consideration of the appeal. Instead of continually emphasising the shortcomings of the tribunal’s decision, I set out my decision in the form of guidance for the rehearing.
The legislation
5.	The legislation relevant to this case is contained in regulation 7 of the Housing Benefit (General) Regulations 1987:
‘(1)	A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where-
	(a)	the tenancy or other arrangement pursuant to which he occupies the dwelling is not on a commercial basis;
	(l)	in a case to which the preceding subparagraphs do not apply, the appropriate authority is satisfied that the liability was created to take advantage of the housing benefit scheme established under Part VII of the Contributions and Benefits Act’.
The claimant’s occupation of the dwelling
6.	The claimant entered into a tenancy agreement on 4th July 1994. As far as I can tell, the tenancy was an assured tenancy under the Housing Act 1988. It was created as a fixed term tenancy for 12 months from 16th July 1994. Rent was payable each calendar month. The tenancy provided for 2 months notice by either party to terminate the agreement. There is no evidence that notice was ever given. Even if notice had been given by the landlord, possession could only be obtained on limited grounds: see section 7(6) of the 1988 Act.
7.	By the time the tenancy came to an end, the ownership of the dwelling had been transferred to the claimant’s sister. No formal steps were taken by the landlord to obtain possession at the end of the contractual tenancy. The claimant remained in occupation. So, from 16th July 1995, she held under a statutory periodic (monthly) tenancy, unless she surrendered the tenancy or took other action to terminate it: see section 5(2) of the 1988 Act. Its terms were imposed by section 5(3). They were liable to be varied in accordance with section 13 (rent) and section 6 (other terms). As far as I know, no steps have been taken to bring the tenancy to an end, recover possession or to vary the rent or other terms.
The appeal tribunal’s decision
8.	The tribunal dismissed the appeal. It relied on regulation 7(1)(a) and (l) in the alternative as supporting the local authority’s decision.
Regulation 7(1)(a)
9.	The local authority maintains that this head applies to the claimant. Its case is based on the way in which the tenancy has been operated by the sisters. However, what matters is whether ‘the tenancy or other arrangement pursuant to which [the claimant] occupies the dwelling’ is on a commercial basis. 
10.	The key question is: under what tenancy or arrangement does the claimant occupy the dwelling? There are two possibilities. 
11.	One possibility is that she did not surrender her assured contractual tenancy or take other action to terminate it. If this is what happened, the claimant’s tenancy became a statutory periodic tenancy. I cannot understand how a tenancy that is created by law cannot be on a commercial basis. However, the failure by the claimant’s sister to take advantage of the provisions allowing for an increase in rent under the tenancy or for recovery of possession for failure to pay rent may be relevant. The landlord has power to seek increases in rent under section 13 of the 1988 Act. It is possible that the failure by the landlord to avail herself of this possibility had the effect that the tenancy ceased to be on a commercial basis. Also, the landlord could seek possession for failure to pay rent or for persistent delay in paying rent under section 7(3) and (4) of, and Grounds 10 and 11 in Schedule 2 to, the 1988 Act. Again, the failure to make use of these provisions may have had the effect that the tenancy ceased to be on a commercial basis. 
12.	The other possibility is that the arrangements between the sisters around the time when the assured contractual tenancy came to an end may have had the effect of bringing the tenancy to an end by the action of the tenant/claimant. If the tribunal finds that this was what happened, it must decide what tenancy or arrangement was put in its place. It must apply regulation 7(1)(a) to that.
Regulation 7(1)(l)
13.	As with regulation 7(1)(a), the application of this head depends on the question: under what tenancy or arrangement does the claimant occupy the dwelling? 
14.	If the claimant’s contractual tenancy became a statutory periodic tenancy, the position is this. This head only applies if ‘the liability was created to take advantage of the housing benefit scheme’. When the claimant’s sister bought the dwelling, the claimant’s assured tenancy already existed. That could not have been created to take advantage of the housing benefit scheme. But what about the statutory protected tenancy? The claimant’s liability for rent has arisen under that tenancy since 16th July 1995. That tenancy was created by operation of law. How can a tenancy that exists by operation of law have been created with the necessary purpose? One answer may be this. If the sisters allowed the tenancy to come into existence when it could have been prevented, then it may be possible to find that the liability arising under the tenancy was created to take advantage of the scheme. 
15.	If the claimant’s contractual tenancy was replaced by some other tenancy or arrangement, and not by a statutory periodic tenancy, it is possible that the new tenancy or arrangement was created to take advantage of the scheme.
Summary
16.	I allow the appeal. The tribunal went wrong in law by overlooking the nature and significance of the legal relationship between the claimant and her sister. I direct a rehearing so that a differently constituted tribunal can investigate and consider the facts in accordance with my analysis of the law. 

Signed on original	Edward Jacobs
Commissioner
23rd October 2002