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Slide background

Capacity to deal with land

Property sale 827489 s 146x219LexisPSL Local Government, in partnership with Rebecca Sharpe of RJR Legal Ltd, examine the options where a legal owner lacks mental capacity to deal with land.

Mental capacity

An individual lacks capacity in relation to a matter if they have an impairment of or a disturbance in the functioning of the mind or brain and the effect of this is that the individual is unable to make a specific decision at the time the decision is to be made (Mental Capacity Act 2005, s 1). See Practice Note: Mental capacity—an introduction.

An individual is unable to make a decision for themselves in relation to a specific matter if, with appropriate assistance, they are unable to understand the information relevant to that decision, retain that information, use or weigh that information as part of the process and communicate that decision (MCA 2005, s 3(1))

The Mental Capacity Act 2005 (MCA 2005) provides that an individual should not be treated as unable to make a decision if they can only retain that information for a short period of time. If they are able to make the decision in that moment, even if they go on to forget, then they should be treated as able to make that decision.

The MCA 2005 also provides that an individual should be given every opportunity to make that decision for themselves which will include taking any necessary practical steps to assist them. This could include explaining the facts to them in a different way, choosing a place where they are most comfortable or even a particular time of day when they are at their best. See Practice Note: Mental capacity—assessments and tests.

When a practitioner may be involved with property

Most commonly practitioners are likely to come into contact with land and mentally incapacitated individuals where they have vacated their property and have gone into residential accommodation and have been assessed as being able to pay for that care. Practitioners may be required to liaise with the individual or their appointed representative (if any) to ensure that funds are made available to pay for that care.

In addition, an individual may be subject to specific statutory powers of the local authority including compulsory purchase orders, building notices and planning notices. Where an individual may lack capacity, enforcement of these powers presents a unique challenge for the practitioner.

Practicalities when dealing with property

Wherever a decision is being made that involves an individual who a practitioner may feel lacks mental capacity, the following steps should be undertaken under the MCA 2005 Code of Practice:

  • ensure that for each decision a capacity assessment is undertaken
  • practitioners should note that they cannot make a blanket decision that an individual lacks capacity and each decision must be considered on its merits
  • a practitioner should take every opportunity to allow the individual to make the decision themselves (MCA 2005, s 3(3)). This can include:

- explaining the issues to them in a different way for example drawing pictures or diagrams

- allowing them additional time to make that decision

- asking them to make that decision at a time of day at which they are most alert.

See Practice Note: Capacity—housing and care.

If a practitioner concludes that an individual lacks the capacity to make the decision in question they need to establish whether or not they have an attorney or deputy appointed to manage their financial affairs.

Practitioners should remember that an individual may have an attorney appointed under a registered or unregistered enduring power of attorney (signed prior to 1 October 2007) or a registered lasting power of attorney or a Court appointed deputy.

The appointed person should then have the appropriate authority to make the decision in question on behalf of the individual and in cases where financial remedial action is required, they should have the appropriate authority to use the individual’s funds.

Where funds are required to pay for the care of an individual, practitioners should be aware that this may be a particularly sensitive time for the attorney and their family. Making a decision to sell the family home to meet the cost of the individual's care is often regarded as unfair and may be met with hostility.

Practitioners should consider the available options with the attorney to include if the individual has sufficient funds without resorting to a sale of the property, whether rental income would cover the fees or perhaps a third party funding arrangement. Practitioners should also be aware of the provisions of the Care Act 2014 and also the Care and Support (Deferred Payments) Regulations 2014, SI 2014/2672 as to whether a deferred payment agreement is available. This new regime, although subject to some criticism, may help individuals who are reluctant to sell their property. See Practice Note: Means testing for local authority assistance with care funding.

As discussed later where an attorney or deputy does not have the appropriate authority or, if they feel they need the protection of the Court, then they may make an application to the Court of Protection to assist them in making the decision. See Practice Note: Powers of the Court of Protection.

If an individual does not have an appointed person or if that person fails to co-operate with the local authority what options are then available to the practitioner?

Unco-operative attorney

Where Practitioners face an unco-operative attorney one of the first questions which should be considered is why they are being unco-operative. It is acknowledged that this can be a difficult time for relatives and if they are also acting as attorney, then they may find this role difficult. Care should be taken to explore the options with the attorney and seek a resolution.

Practitioners should be aware that lack of co-operation could also be an indicator of financial abuse and should consider whether a referral to the Office of the Public Guardian should be made. See Practice Note: The Public Guardian. A practitioner should also consider whether the very specific duties imposed on a local authority by sections 6768 of the Care Act 2014 are engaged in relation to vulnerable adults resident in their area. See Practice Notes: Property and financial affairs lasting power of attorneys for local authority practitioners and Local authority social care duties.

In some circumstances, Practitioners should consider whether an application to have that attorney removed from their position may be required or whether the Court should be asked to make a decision.

Making an application to the Court of Protection

The Court of Protection has the power to make decisions for individuals who lack capacity to manage their own affairs.

The Court can be asked to make a decision on a specific matter, for example whether or not to sell someone’s property or they can be involved in the appointment of a deputy or removal of an attorney and a deputy appointed in their place.

The Court can also assist an attorney who may not consider that they have sufficient power to make the decision regarding property or for example where the property is subject to a specific gift in the individuals will.

Practitioners should be aware that this is by no means an inexpensive process and, unless the matter is urgent, other non-contentious avenues should be considered. See Practice Note: Public Guardian and Court of Protection fees and fixed costs.

Enforcement of statutory powers

Where the decision in question doesn’t relate to providing funds for an individual’s care but relates to the condition of the property or if the property is vacant there are various options open to the practitioner.

It is always open to the practitioner to make an application to the Court of Protection to either be appointed as an individual’s deputy or indeed to make a specific decision on behalf of that person. However a practitioner should have regard both to the wider needs of the individual and whether there is a more cost effective alternative to them.

There are a number of statutory powers available to the local authority when dealing with land and in some circumstances could be an alterative to making an application to the Court. These may be especially useful in cases where an attorney is failing to co-operate with the local authority. Practitioners should however have regard to the possible reasons behind the non-co-operation of an attorney in particular whether this signals potential financial abuse, see Practice Note: Property and financial affairs lasting power of attorneys for local authority practitioners.

When considering the statutory powers listed below, practitioners should always have regard to the provisions of the Equality Act 2010 especially in the context of the MCA 2005 as described above. In particular, local authorities should consider whether there are any circumstances where their practices and procedures could unfairly disadvantage those who have reduced or limited mental capacity:

  • compulsory purchase orders (CPOs)—section 17 of the Housing Act 1985 (HA 1985), section 226 of the Town and Country Planning Act 1990 (TCPA 1990) (as amended by the Planning and Compulsory Act 2004). It is possible to seek a compulsory purchase order where a property is empty. Practitioners should need to demonstrate that steps have been taken to encourage the owner to bring the property into acceptable use and would need to demonstrate that any CPO justifies any interference with the human rights of an individual. This is an extreme option and may be more appropriate where there is lack of co-operation by someone’s attorney
  • powers to take over land—HA 1985, s 17. Local authorities do have the power to take over property to increase the number of houses available. This includes bringing empty properties back into use and making improvements to substandard ones
  • enforced sales procedures—Law of Property Act 1925 and TCPA 1990, s 215. Where debts, for example unpaid council tax are secured on a property by way of a charging order, local authorities may be able to persuade the court to grant an order for sale
  • making a property safe and secure—sections 76, 77 and 78 of the Building Act 1984, section 80 of the Environmental Protection Act 1990 and section 29 of the Local Government (Miscellaneous Provisions) Act 1982
  • there is the power to require an individual to make a property safe and secure or following failure to do so the local authorities has the power to do so
  • empty dwelling management orders (EDMO)—Housing Act 2004. Where a property had been empty for two or more years and not be on the market to let or sell local authorities have the power to apply an EDMO to a property. This allows them to take over and manage a property to ensure occupation. This step brings the property into use but the ownership remains with the individual

Where a property is co-owned

Very often a property will be co-owned, for example between a husband and wife and one requires care. Co-ownership may affect whether or not charges are applicable but this is beyond the scope of this note. See further Practice Note: Means testing for local authority assistance with care funding.

However, where a practitioner requires the authority to deal with co-owned land the following considerations should be taken into account:

  • co-owners hold the property on a trust of land (Trusts of Land and Appointment of Trustees Act 1996) which allows the legal and beneficial titles to a property to be owned by different people. It is very common for the legal and beneficial owners to be the same people but this is not necessarily the case and can prove problematic for practitioners
  • whether the legal title is held as joint tenants which means that the legal title passes to the surviving co-owner or whether as tenants in common which allow each co-owner to dispose of their share how they wish
  • where there is a trust of land, on sale, there must be at least two trustees to ensure that a purchaser can be satisfied that any equitable interests are overreached. This can be a problem where one or more of the trustees is unable to exercise their function as trustee by virtue of their mental incapacity
  • it may be possible for an attorney to act under either an enduring power of attorney or property and financial affairs—LPA 1925, s 22 for the incapacitated trustee but it may also be necessary to replace the incapacitated trustee or appoint an additional one. Practitioners should always be minded of any conditions or restrictions in the attorney itself or in any trust document
  • for attorneys signed after 1 March 2000 an attorney can only exercise their function as a trustee if the individual has a beneficial interest in the property this includes both acting in their capacity as attorney and exercising the power to appoint a new trustee
  • practitioners should note that where there is more than one attorney for an individual they cannot be treated as more than one trustee for the purposes of a trust of land. The individual is one trustee and can delegate their functions to their attorney or attorneys. This should be distinguished from the position were one of the attorneys is also a trustee. In these circumstances, they could act for themselves and their co-attorney could sign on behalf of the incapacitated individual.

Examples

- Husband and wife own a property together as beneficial tenants in common. They have lasting powers of attorney which appoint each other as attorney.

The husband lacks capacity and the wife has decided to downsize and move elsewhere.

In these circumstances, the wife could not sign as both trustee and attorney and would need to appoint a second trustee to act with her.

- Husband and wife own a property together as beneficial tenants in common. They have lasting powers of attorney which appoint each other and their daughter as attorney jointly.

The husband lacks capacity and the wife has decided to downsize and move elsewhere.

In these circumstances, the wife and daughter could not sign as both trustee and attorney due to their joint appointment and would need to appoint a second trustee to act with them.

- Husband and wife own a property together as beneficial tenants in common. They have lasting powers of attorney which appoint each other and their daughter as attorney jointly and severally.

The husband lacks capacity and the wife has decided to downsize and move elsewhere.

In these circumstances, the wife could for herself as trustee and her daughter by virtue of the joint and several appointment could act for the husband.

Finally, where there is a deputy appointed they do not have the power to take over trustee functions unless they are specifically authorised by the Court of Protection. In these circumstances the court very often prefers that the incapacitated individual is replaced rather than their functions being performed by another person and would usually make an order to replace rather than allow delegation to the deputy.

This article was originally published in LexisPSL Local Government. If you would like to read more quality content like this, then register for a free 1 week trial of LexisPSL.

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‘Funding crisis’ - a detailed look at the funding shortage in UK schools

According to campaigners, more than 200 schools in England are cutting their school weeks short due to funding shortages. This raises questions over legal ramifications and the responsibility of the government. Jean Tsang, associate at Bates Wells and governor of a maintained primary school, addresses these questions and looks at the worrying effects of this ‘funding crisis’ on the ‘most vulnerable children’ in the educational system.
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August 16, 2019

Judicial review challenge over closure of children’s centres defeated by local authority

The case R (on the application of L, an infant (by his mother and litigation friend)) v Buckinghamshire County Council represents the first time when the High Court considered in detail the meaning of the ‘sufficiency duty’ in section 5A of the Childcare Act 2006 (ChA 2006) in the context of whether a council’s consultation on the closure of a number of children’s centres was unlawful or not. James Goudie QC examines the background to and the practical implications of the judgment.
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August 09, 2019

How does a local authority establish a market?

The LexisPSL team outline the powers available to local authorities looking to establish a new market.
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August 02, 2019

Forced academisation of schools - is resistance futile?

What are the circumstances which lead to a school being forced to become an academy, and is there anything that can be done to stop it happening? Katie Michelon provides an overview of the forced academisation process, and explains the options available to schools, parents and local authorities when faced with the possibility of an Academy Order.
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June 13, 2019

Home or away?

Katherine Illsley outlines how a local authority should approach the situation where a parent to be assessed for the purposes of public children care lives in another jurisdiction.
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June 07, 2019

Tenant Fees Act 2019 - government guidance

The government recently published guidance on the Tenant Fees Act 2019 (TFA 2019). Robin Stewart and David Smith of Anthony Gold Solicitors look at some of the key questions relating to the guidance, including enforcement, penalties and some controversial aspects such as guidance pertaining to payment of damages.
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June 07, 2019

How should the courts approach cases with an ‘open’ pool of possible perpetrators?

Chris Stevenson, barrister at Fourteen, examines the Court of Appeal’s decision in Re B (children: uncertain perpetrator) to allow a father’s appeal against a Family Court judge’s finding that he was within a pool of possible perpetrators responsible for sexually transmitting gonorrhoea to three of his children (registration required).
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May 24, 2019

Court of Appeal finds permissive housing policies can restrict development elsewhere

In Gladman Developments Ltd v Canterbury City Council [2019] EWCA Civ 669, the Court of Appeal dismissed an appeal by developer Gladman against the decision of the High Court to quash planning permission granted on appeal for a residential development on a site not allocated for development, not on previously developed land, and outside the existing built-up area.
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May 24, 2019

Safety first?

Daljit Kaur looks at the implications for disability discrimination of a case concerning a nursery-age child prevented from accessing provision over 15 hours.
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May 17, 2019

The changing landscape of local authority Trading Standards prosecutions?

Richard Heller considers the potential impact of Qualter and others v Crown Court at Preston [2019] EWHC 906 (Admin) could have on the way regional Trading Standards services investigate and prosecute criminal offences (registration required).
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May 17, 2019

Wish they weren't here?

Can a parent with parental responsibility object to their child, who is subject to an interim care order, being taken on holiday by their foster parents?
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May 10, 2019

Exploring the new guidance on greater protections from rogue landlords

Jason Hobday, associate at Womble Bond Dickinson, discusses the implications of recent government guidance documents which intend to enforce greater protections from rogue landlords (registration required).
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May 09, 2019

Court finds judge in Uber licensing case was not biased

Philip Kolvin QC examines the High Court’s decision in R (United Cabbies Group) v Westminster Magistrates’ Court to dismiss the claimant’s application for judicial review of a district judge’s grant of an operator’s licence for London private hire vehicles to the third interested party, Uber.
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May 03, 2019

End of the road?

Morayo Fagborun Bennett looks at the Court of Appeal's decision on waiving offers of alternative accommodation and the lawfulness of an earlier review decision on a subsequent homelessness appplication in Godson v London Borough of Enfield [2019] EWCA Civ 486.
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May 03, 2019

Court rejects implied duty to report change of address for council tax purposes (R v D)

Samuel Genen, solicitor at Steel & Shamash, comments on the case of R v D [2019] EWCA Crim 209 where the Court of Appeal ruled that a failure to notify the local council of a change of address for the purpose of council tax did not constitute a criminal offence under the Fraud Act 2006 (FrA 2006). (Registration required)
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March 22, 2019

Is it in the best interests of a child to give evidence in a foreign trial?

Katherine Duncan explains how the court, in Re X, carried out a balancing exercise in determining whether a child, who was ward of the court, should be permitted to travel out of the jurisdiction to give evidence at a foreign criminal trial.
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March 15, 2019

High Court’s inherent jurisdiction for the protection of vulnerable adults

The case of Southend-on-Sea Borough Council v Meyers [2019] EWHC 399 (Fam) highlights the wide and largely unfettered nature of the power to grant injunctive relief under the High Court’s inherent jurisdiction for the protection of vulnerable adults and the difficulty surrounding the issue of how the balance should be struck between protection of a person on grounds of vulnerability and respect for their autonomy, writes Bethan Harris.