Managing Fixed- Term Tenancies Housing & Regeneration I - - PowerPoint PPT Presentation

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Managing Fixed- Term Tenancies Housing & Regeneration I - - PowerPoint PPT Presentation

Jan 06, 2024 104 likes •680 views

Managing Fixed- Term Tenancies Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities Aims of today Tenancy types post Localism Act 2011 Housing & Planning Act 2016 Structuring effective tenancy agreements

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Managing Fixed- Term Tenancies

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Aims of today

  • Tenancy types post Localism Act 2011
  • Housing & Planning Act 2016
  • Structuring effective tenancy agreements
  • Understanding Fixed Terms tenancy

requirements

  • Legal challenges to end Fixed Term
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Social housing tenancy types

The ‘old favourites’…

  • Secure tenancy – granted by LA & RPs

before 15/1/1989 (Housing Act 1985)

  • Assured tenancy – granted by RPs from

15/1/1989 (Housing Act 1988)

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Social housing tenancy types

  • Both have significant security of tenure
  • If tenant complies = ‘life-term’ tenancy
  • Rolling period – usually weekly – continues

until steps taken to terminate

  • Valuable commodity
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenure reform

  • Localism Act 2011 – implemented

15/11/2011

  • Sections 150-166 Tenure Reform
  • Radical reform to social housing
  • LAs & RPs option to grant fixed term

tenancies from 1/4/2012

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

The end of tenancy for life?

  • LA – flexible tenancies
  • RPs – fixed term tenancies

No obligation on landlord to use. Can continue with assured/secure tenancies if preferred.

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Fixed term tenancy: tenancy for a fixed length of time. Start date and end date

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

A ‘lukewarm’ response

  • Low uptake of flexible and fixed term
  • CIH research - LA’s and RPs cautious
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act: a game changer?

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

  • Royal Assent 12 May 2016
  • “Generation rent, generation buy”
  • Pay to Stay
  • Extension of Right to Buy
  • Phase out tenancies for life
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

  • Act in force but majority to be enacted
  • Pay to Stay scrapped
  • Extension of RTB delayed

Use of fixed term tenancies in spotlight…

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

  • Awaiting enactment date
  • Secretary of State to announce
  • Until enacted, use of fixed term and

flexible tenancies remain discretionary

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

Amendments to Housing Act 1985

  • Schedule 7: Phasing out of tenancies for

life

  • 81A (1): Secure tenancies for fixed term

that is:

– at least 2 years – no longer than permitted maximum – 10 years

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

81A(3): If landlord has been notified in writing that child aged under 9 the permitted maximum length can be extended so fixed term would end on day that child will reach 19.

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

81B: Landlord can still grant “old-style” secure tenancy in certain circumstances i.e. replacement tenancy/tenant has not made an application to move.

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

81 D: person offered a secure tenancy can request a review to consider length of tenancy offered.

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

86A: Review must be carried out to consider what to do at end of the term. Review must be done whilst fixed term has 6 to 9 months left to run

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

Review could decide:

  • Grant a new secure tenancy of current

property

  • Seek possession of current property but
  • ffer a secure tenancy of another property
  • Seek possession without offering to grant

a secure tenancy of another property

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Housing & Planning Act 2016

86C: Tenant may seek a review of the decision made. 86E: Recovery of possession of secure tenancy at end of fixed term.

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Remember…

  • Until Housing & Planning Act implemented

it’s “business as usual”

  • Options: Secure/Assured/Flexible/Fixed Term
  • Landlords have the choice…
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenancy strategy

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenancy strategy

S150 – 153 Localism Act 2011

  • Local housing authority must prepare and

publish a strategy for the RPs in its district so the RP can write policies relating to:

– Type of tenancies they will grant – Circumstances if fixed term tenancies will be granted – Lengths of proposed fixed term tenancies – Circumstances in which fixed term tenancy will be renewed

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenancy strategy

  • Must be kept under review – s150(5)
  • Can be modified – s150(5)
  • Should only grant tenancies in accordance

with the Tenancy Strategy so consider it!

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenancy strategy

Liverpool City Region Tenancy Strategy

  • Reflective of 100 RPs managing >150,000

properties

  • Adopted by Halton, Knowsley, Liverpool, St

Helens, Sefton & Wirral

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenancy strategy

Liverpool City Region Tenancy Strategy

  • ‘Presumption in favour of lifetime

tenancies’

  • Recognise need for FTT for RPs
  • Reasons not to grant a FTT
  • Minimum of 5 years
  • Guidance on reasons to end/renew a FTT
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Fixed term & flexible tenancies in detail

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

What is a Flexible Tenancy?

  • Local Authority
  • Created by s107A of the Localism Act
  • s107A(2)(a): a ‘secure’ tenancy for a fixed

period, not less than 2 years

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Features of a Flexible Tenancy

  • Specific period of time
  • At end of term landlord doesn’t require a

‘ground for possession’ to obtain it

  • At least 6 months written notice served

before end of term if tenancy not renewed

  • At least 2 months written notice of

intention to apply for possession

  • Apply for possession – mandatory order
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

What is a Fixed Term Tenancy?

  • Registered Providers
  • Assured Shorthold Tenancy for a fixed

period of time

  • Been around since Housing Act 1988
  • Typical of tenancies in the private market
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Features of a Fixed Term Tenancy

  • Specific period of time
  • At end of term landlord doesn’t require a

‘ground for possession’ to obtain it

  • End of term: serve a S21 Notice Requiring

Possession - 2 months’ notice

  • Seek mandatory possession order using

accelerated procedure – usually without court hearing

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Tenancies not for life…

How long should the term be for?

  • Flexible: statute says not <2 years
  • Fixed Term: nothing in statute, but

guidance says…

‘For at least 5 years except in exceptional

  • circumstances. May be less than 5 but more than

2 if exceptional and if housing policy permits’

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Features of a Fixed Term Tenancy

  • Probationary period still available
  • Introductory – LA
  • Starter – RP
  • At end of probationary period (usually 1

year) the fixed term will ‘kick in’

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Get it right: how to end a fixed term tenancy

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a flexible/fixed term tenancy

  • Both have determined start & end date
  • Tenancy breaches resulting in need for

possession prior to the end of the fixed term are pursued by NSP and possession proceedings using grounds under…

– Housing Act 1985 (if secure) – Housing Act 1988 (if assured)

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a flexible/fixed term tenancy

  • At end of term landlord has option to offer

new tenancy or seek possession

  • Consider housing strategy, internal

policies, and guidance as to reasons for either option

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a flexible/fixed term tenancy

  • DCLG published “Lifetime tenancies” –

Equality Impact Assessment in May 2016

  • Policy & service analysis for s.149 Equaliy

Act 2010

  • The “public sector equality duty”
  • Applies to LAs
  • RP’s if conducting “public function”
  • Refer to Equality Duty Flow Chart in packs…
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a flexible/fixed term tenancy

Likely factors influencing decision to renew

  • Rent payment record
  • ASB
  • Under/over occupation
  • Earnings
  • Efforts to secure/keep employment
  • Need for social housing

Likely to be contentious…

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a flexible/fixed term tenancy

  • Household and/or individual plan?
  • Sets out the ambitions and aspirations the

landlord has for that tenant/household.

  • The “household ambition plan” commits

tenants/household to participate in training, employment, education

  • Demonstrate a commitment to be a

responsible member of the community

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Ending a flexible/fixed term tenancy

Some key questions

  • Will tenants who want to ‘better’

themselves be turned off?

  • Should a slight income rise lead to losing

your home?

  • What about sustaining communities?
  • Critics
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a flexible/fixed term tenancy

  • Engage with tenant
  • Start enquiries early
  • Be proactive
  • Diarise review start dates
  • Don’t leave it late
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a FLEXIBLE tenancy

When decision made to end tenancy

  • CONDITION 1 – must serve at least six

months’ written notice that:

– Landlord does not intent to grant another tenancy – Reasons for not granting – Advise of right to review within 21 days (s107e)

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a FLEXIBLE tenancy

No statutory guideline on review except ‘The review must consider whether the decision is in accordance with any policy of the landlord as to the circumstances in which it will grant a further tenancy on the coming to an end of an existing flexible tenancy’

S107E(3)

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Ending a FLEXIBLE tenancy

  • Review procedures likely to be challenged

by tenant lawyers

  • Consider similar procedure as introductory

review

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a FLEXIBLE tenancy

When decision made to end tenancy

  • CONDITION 2 – must serve at least two

months’ written notice stating that possession is required:

  • Notice ‘may be given before or on the day
  • n which the tenancy comes to an end’

s107D(5)

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Ending a FLEXIBLE tenancy

  • Mandatory possession order should be

made if Court is satisfied that

– Notices have been served correctly – Review (if requested) has been carried out

  • Must be immediate - court does not have

discretion to suspend/postpone possession order

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a FIXED TERM tenancy

When decision made to end tenancy

  • CONDITION 1 – must serve at least six

months’ written notice that:

– Landlord does not intent to grant another tenancy – Reasons for not granting – S164 – inform tenant how advice can be

  • btained
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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a FIXED TERM tenancy

When decision made to end tenancy

  • CONDITION 2 – must serve at least two

months’ written notice stating that possession is required (s21 procedure):

– No statutory review mechanism – May want to offer opportunity of a review – Consider adopting similar procedure as Starter Tenancy appeal

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Ending a FIXED TERM tenancy

  • Mandatory possession order should be

made if Court is satisfied that the Notices have been served correctly

  • Must be immediate - court does not have

discretion to suspend/postpone possession order

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Challenges

  • Review procedure
  • Judicial Review if policies/procedures not

followed

  • Human Rights Proportionality arguments

for mandatory possession proceedings would have to be “exceptional”

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Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities

Challenges

  • No legal challenges been brought on

ending flexible or fixed term tenancies post Localism Act… yet

  • Tenant lawyers are waiting for them and

they are likely to be pursued

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Issues with mandatory possession

  • Human Rights challenges
  • Article 8 – right to respect for private life,

family life and home

  • Justification in seeking a mandatory

possession order

– Claim made in accordance with the law – Eviction is in pursuit of a legitimate aim – Eviction is necessary & proportionate response

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Any questions…?

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Tel: 0161 827 7178 Email: melanie.dirom@croftons.co.uk Tweet: @lawyergirluk Full-service firm: www.croftons.co.uk