Westminster City Council in court to protect affordable housing
Planning and Environment, Property, Local Government
On 30 October 2024, Mr Justice Edwin Johnson granted an interim injunction requiring 15 flats in W1 to be used as affordable housing until trial.
The case concerns a mixed-use development at 74 – 76 Chiltern Street and 22 – 28 Paddington Street, Marylebone, London W1.
On 11 April 2013, Westminster City Council granted planning permission for the development subject to an agreement under s. 106 of the Town and Country Planning Act 1990. The s.106 agreement required 16 flats within the development to be used as affordable housing, comprising 10 social rented units and 6 intermediate rented units (“AHUs”).
The AHUs were used as affordable housing until the provider, Kinsman Housing Limited, was de-registered by the Regulator of Social Housing on 7 September 2023. On 16 February 2024, Kinsman’s mortgagee sold the AHUs on the open market, in purported exercise of its power of sale under the legal charge. The AHUs were bought by a real estate investment company registered in Cyprus. The new owners’
managing agent quickly served s. 21 notices on all the social tenants requiring possession.
On 30 April 2024, Westminster City Council brought a claim in the High Court, Chancery Division, seeking a declaration that the new owners were bound by, and an injunction to enforce, the affordable housing obligations in the s. 106 agreement. The new owners defended the claim but did not proceed with the threatened evictions. In August, they let one of the AHUs, which was vacant, at a market rent.
The key issue in the claim is the interpretation of the mortgagee exemption clause, which exempts from the affordable housing obligations any mortgagee of a registered provider and persons claiming through them. By the time the AHUs were sold, Kinsman was no longer a registered provider. Westminster City Council’s case is that the mortgagee exemption clause had ceased to apply. The legal argument concerns contractual interpretation in the context of the statutory moratorium on the disposal of social housing assets under s. 145 of the Housing and Regeneration Act 2008.
At the hearing on 30 October 2024, Mr Justice Edwin Johnson delivered a judgment finding that Westminster City Council had discharged the onus of showing that they had a real prospect of success on the interpretation issue and granted an interim injunction until trial.
Matt Hutchings KC is leading Michael Feeney of Francis Taylor Building, instructed by Kim Painter and Kirsten Chohan, of Bi-Borough Legal Services, Kensington and Chelsea Council and Westminster City Council.
