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 Cheltenham appeal tribunal under reference U/03/189/2002/01136, held on 5 March 2003, 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 are raised by the appeal and, subject to the tribunal’s discretion under paragraph 6(9)(a) of Schedule 7 to the 2000 Act, any other issues that merit consideration. 

The appeal to the Commissioner
2.	The case concerns the valuation of the assets owned by a claimant for housing benefit. 
3.	The case comes before me on appeal to a Commissioner against the decision of the appeal tribunal brought by the claimant with the leave of a district chairman of tribunals. The other party is the claimant’s local authority, Cheltenham Borough Council. The local authority does not support the appeal. 
The factual background
4.	This case concerns a claim for housing benefit made by the claimant. He has been convicted of and imprisoned for an offence. I do not know the details, other than that it involved family members. He has been released on licence. It is a condition of the licence that he does not live in a number of places, including the place where he and his wife own the house in which they lived before his conviction. In effect, the licence prevents him from living in that home. His wife has applied for and been granted a decree of judicial separation. So far, the facts cannot be disputed. 
5.	The claimant makes further assertions. I have no reason to doubt what he says, but I bear in mind that I have only his word for them and that I have no evidence from his wife about her motives or wishes. The claimant says that his wife was forced to obtain a judicial separation because of the feelings of family members and that she has no wish to divorce him. He also says that he feels responsible for hurting his wife and wishes her to have his share in their former matrimonial home. He has told the local authority that and has been advised that if he transferred his share in the home to her, he would be treated as having done so for the purpose of securing entitlement to housing benefit. 
6.	The local authority refused the claim on the ground that the claimant possessed capital in excess of the limit of £16,000 prescribed by regulation 37 of the Housing Benefit (General) Regulations 1987.
The identification and valuation of the claimant’s interest in the matrimonial home
7.	This is the only issue with which I need to deal on this appeal. 
8.	The local authority provided a valuation of the claimant’s interest. It had been undertaken on the factual basis of information provided by the claimant and without access to the premises. The valuer’s approach had been to value the property as a whole and then divide by two to obtain the value of the claimant’s interest. The tribunal accepted that valuation. On that basis, the tribunal confirmed the local authority’s decision to refuse the claim.
9.	The issue for me is this: did the appeal tribunal go wrong in the way in dealt with the valuation of the claimant’s interest in the former matrimonial home? The answer is that it did.
10.	The tribunal did not consider whether regulation 44 of the Housing Benefit (General) Regulations 1987 applied. In the circumstances of this case, it applies if the claimant and his wife ‘are beneficially entitled in possession to any capital asset’. If that condition is satisfied, they are ‘treated as if each of them were entitled in possession to the whole beneficial interest in an equal share’.
11.	This is in the same terms as regulation 52 of the Income Support (General) Regulations 1987. That regulation, and therefore this, applies if the property is held on joint tenancy, but not if it is held as tenants in common. That was the decision of the Court of Appeal in Hourigan v Secretary of State for Work and Pensions [2003] 3 All England Law Reports 924. The tribunal should have investigated the form of ownership of the property. It did not do that. 
12.	Even if the property was held on joint tenancy, so that regulation 44 applied, the tribunal had to evaluate the local authority’s evidence of valuation.
13.	First, the tribunal had to identify the claimant’s interest that had to be valued. I assume for this purpose that he and his wife are joint tenants, not tenants in common. On that basis, the correct approach was to value his half interest, not to value half of the whole interest. See the Court of Appeal decision in Chief Adjudication Officer v Palfrey, cited in Hourigan at paragraph 14.
14.	Second, the tribunal had to ensure that the valuer had acted on an accurate factual basis. The claimant had stated that his wife would be prepared to buy his interest. The valuer valued on that basis. On appeal to the appeal tribunal, the claimant’s representative argued that that information was incorrect and that his wife would not be able to buy his share. The tribunal did not deal with that argument. It should have. It raised an issue that was relevant to the valuation. Without the wife’s evidence, it could not inquire into her willingness to buy the claimant’s share. However, the tribunal could have inquired from the claimant about his knowledge of his wife’s financial circumstances. That would have allowed the tribunal to make an assessment of whether she was in a position to be able to buy it. The tribunal could, and should, also have considered the realities of the matter. The wife, having obtained a decree of judicial separation, was entitled to seek financial relief in the form of a property adjustment order under the Matrimonial Causes Act 1973. In those circumstances, why would she need, or would she want, to spend money to buy her husband’s share in their property?
15.	Third, the tribunal had to ensure that the valuer had correctly taken into account the risks affecting the value of the property. If the claimant’s wife was not prepared to purchase her husband’s interest in the property, a purchaser would only be able to secure a sale of the property on the order of a court. Even if she was prepared to purchase his interest, she would almost certainly obtain legal advice on the sale and would be advised of her rights to a property adjustment order. Either way (on an application for an order for sale or on property adjustment order), the sale of the property would probably be postponed during the life of the claimant’s wife. On actuarial tables, she has a life expectancy of over 20 years. And there is the risk that, under a property adjustment order, the claimant’s interest could not just be postponed, but might be transferred in whole or in part to his wife.  
16.	Finally, the tribunal had to ensure that there was, for the purposes of regulation 41(a) of the Housing Benefit (General) Regulations 1987, a market for the claimant’s share in those circumstances. Housing benefit is an income-related benefit. It is subject to capital limits. No doubt, the purpose behind that provision is that the claimant should use capital above that limit rather than rely on support from public funds. That suggests that the claimant’s capital should be valued on the basis of what it could actually realise at the time of the sale. A claimant cannot pay rent on the basis of a theoretical value. That involves investigating whether there is a real market for the interest that is available for sale and then valuing the interest in that market. For myself, I would need evidence of the existence of a real market for the claimant’s interest in his former home.
Is a rehearing necessary?
17.	I have considered whether there is sufficient information to allow me to decide that the value of the claimant’s interest in his former home is so low that it falls below the capital limit. On reflection, I have decided not to do that for two reasons. First, the claimant may be able to give evidence on some of the matters that affect the value of his interest. Second, the local authority should have a chance to obtain valuation evidence on the basis I have indicated. Third, there is now available evidence of a joint bank account (page 108). Even if the value of the claimant’s interest in his former home is below the capital limit, it may that his capital as a whole is still above that limit when his interest in the bank account is taken into account. I do not know if that bank account has been frozen. If it has, the tribunal must apply my decision in CIS/0982/2002.
18.	So, a rehearing is necessary.

Signed on original	Edward Jacobs
Commissioner
26 August 2003