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Localism Bill
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1. The Localism Bill and tenure reform – the new ‘flexible’ tenancies Nick Billingham
Partner and Head of Housing Management
Devonshires Solicitors
2. Localism Bill – the Tenure Provisions Flexible tenancies – local authorities
Fixed term assured shorthold tenancies - RPs
Tenancy strategies
Drafting points for fixed term ASTs
What happens at end of fixed term?
Transfers
Reaction from the sector
3. Flexible Tenancies From April 2012 – for local authorities
Type of secure tenancy
Fixed term of not less than 2 years
Pre-tenancy notice either before tenancy entered into or before introductory tenancy granted
Right to review of landlord’s decision about length of tenancy
Tenant’s right to terminate but only if no arrears and no breach
4. Flexible tenancies – recovery of possession End of fixed term Court must make order for possession if:
(1) fixed term at end
(2) 6 months “minded to” notice given
(3) 2 months notice requiring possession given
Tenant’s statutory right to review
During the fixed term usual grounds for possession apply
5. Flexible tenancies – other matters Succession restricted to spouse/civil partner/partner unless express term (all secure tenancies)
No right to make improvements or obtain compensation for improvements
Flexible tenancy => demoted tenancy => flexible tenancy
Flexible tenancy => FIT => flexible tenancy
Pinnock/Powell (see later)
6. Registered Providers – the Fixed Term AST (1) Builds on existing legislation (ss20 and 21 HA 1988)
ASTs always fixed terms prior to Housing Act 1996
S137 - additional notice requirements on termination
If fixed term AST for not less than 2 years and landlord is RP => landlord must have given 6 months notice that not intending to grant new tenancy at end of term and informing tenant how to obtain advice about the notice (“minded to” notice)
In addition to requirement to serve 2 months notice under s21 (the Notice Requiring Possession) to end the tenancy on expiry of the term
7. Fixed Term AST (2) Right to Acquire extended to cover fixed term ASTs subject to Regulations yet to be published
Succession (s17 HA 198) extended to cover fixed term ASTs (only to spouse and civil partner/partner – unless tenancy extends expressly)
Section 11 (landlord’s statutory repairing obligations) extended to cover fixed term LA secure tenancies and assured tenancies granted by PRPs of 7 years or more
Shared ownership leases (oops!)
8. Do RPs have to grant flexible tenancies/fixed term ASTs? No
RPs (and LAs in relation to flexible tenancies) retain option to continue using lifetime tenancies
NB – on grant of new secure tenancies (internal transfers) check succession terms because s134 will restrict succession to exclude members of family for new secure tenants unless tenancy includes an express term
9. Section 126 “Tenancy Strategies” S126: LHAs obliged to publish a strategy setting out matters which RPs in its district are to have regard to in formulating policies relating to…
Kinds of tenancy
Circumstances when particular tenancy will be granted
Lengths of term
Circs in which further tenancy will be granted at end of existing tenancy
10. Section 126 “Tenancy Strategies” “…have regard to”
LHAs cannot prohibit RPs using fixed term ASTs but RPs must have considered LHA’s Tenancy Strategy in drafting own tenancy management policy for 2011-2015
Affordable Rent Grant Framework: “…ultimately for RPs to decide what their own tenancy management policy should be and what types of tenancy they will offer.”
Consultation with RPs
11. Drafting the fixed term tenancy –some issues to consider (1) Restricted grounds for possession with fixed term assured tenancies (including ASTs): no Grounds 6 (redevelopment) and 9 (suitable alternative accommodation)
If for a term of more than 3 years => must be drawn up and executed as a deed
If term for more than 7 years => must be registered at Land Registry
12. Drafting the fixed term AST –some issues to consider (2) Abandonment/non-occupation : because fixed term => cannot use notice to quit
Forfeiture instead (NOSP plus s146 notice in practice)
Repairing obligations – s11 extended (see back)
Early termination by tenant – flexible tenancy => statutory intervention. Fixed term AST => none so include surrender clause
13. What happens at end of fixed term? Ss107D and 137 – Court may not make an order for possession unless (inter alia):
6 month “minded to” notice given stating not intending to grant new tenancy
Article 8 Human Rights Act 1998: Pinnock (and now Powell)…
Not what Grant Shapps would have wanted
14. Transfers Coalition drive for mobility
Problem of mutual exchanges between fixed term tenants and lifetime tenants (assured/secure)
Section 132 ensures that tenants keep highest level of security
Surrender and re-grant of tenancy at new property
Only protects lifetime tenancies predating Act
Landlord can only refuse on same grounds as apply to mutual exchanges (Sch 3 HA 1985)
15. Reaction from the sector Summary of Responses to “Local decisions: a fairer future for social housing” (Feb 2011)