The validity of tenancies granted by fraudulent employees
Clare Jones examines the outcome of a recent case where housing trust employees had fraudulently granted tenancies to new tenants without following the landlord's usual allocation policies.
In London & Quadrant Housing Trust Ltd v Stokes, heard in the High Court by Mr Justice Marcus Smith on 23 March 2022, the court considered whether possession could be claimed where tenancies had been granted by employees of the landlord who were not following the landlord’s usual allocation policies.
Background
Two employees of London & Quadrant Housing Trust (the “Trust”) had been fraudulently identifying properties where the tenant had died and then offering and letting these properties to new tenants, without following the Trust’s allocation policies. Ms Stokes had been granted a tenancy as a result of the fraudulent actions of the Trust’s employees.
When the actions of their employees came to light, the Trust asked Ms Stokes to surrender her tenancy and, when she would not do so, they brought possession proceedings against her. It was the Trust’s position that their employees did not have authority to grant the tenancy and that Ms Stokes had conspired with the fraudulent employees.
The county court
The county court dismissed the possession claim and found that the employees had ostensible authority to let properties and that Ms Stokes was not aware that the proper processes had not been followed – for example, her tenancy was in a standard form used by the Trust and correspondence had been on official letter-headed paper. There was no evidence to suggest that Ms Stokes had conspired with the employees of the Trust.
The High Court
The Trust appealed the decision, but the appeal was dismissed. The judge had been correct for the reasons he had given.
This case is a warning to social landlords of the consequences of their employees’ actions going unchecked and highlights that a tenant cannot be penalised for irregularities caused by the landlord.
Clare Jones is an Associate in the property litigation team at Weightmans.
