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 • Understanding Fixed Terms tenancy requirements • Legal challenges to end Fixed Term 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) 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 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 Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
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. 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 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 Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
Housing & Planning Act: a game changer? 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 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… Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
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 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 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. 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. 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. 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 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 offer a secure tenancy of another property • Seek possession without offering to grant a secure tenancy of another property 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. 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… Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
Tenancy strategy 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 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! 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 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 Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
Fixed term & flexible tenancies in detail 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 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 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 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 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’ 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’ Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
Get it right: how to end a fixed term tenancy 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) Housing & Regeneration I Commercial Real Estate I Conveyancing I Charities
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