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                             9.1              As we made clear in Part III a principal objective of our project is to develop a scheme of regulation that is considerably simpler than the current law. Much of complexity of the present law arises from the rules about the scope of the schemes currently on the statute book. The Housing Act 1988, the Housing Act 1985 and the Rent Act 1977 detail categories of tenancy that fall within the schemes they create and those that fall outside. Arrangements falling outside the schemes may still come within the scope of theand Protection from Eviction Act 1977, unless theyare classified as “excluded tenancies and licences”. And even these may be subject to indirect regulation resulting from the provisions of the Criminal Law Act 1977.[1]  

                             9.2              and we examine the consequences of exclusion from statutory regulation. If we are to achievethis successobjective it is important that the scope of the scheme be extended as widely as is practicable and that the number of categories of agreement that fall outside the scheme be reduced. But this will require some significant rethinking of matters found in the current law. These issues are considered in this Part.

                             9.3              The topics discussed here are

                             9.4              In general we have taken the view that categories of tenancy covered by other statutory schemes should be excluded from our proposals. On this basis we envisage that the following categories of tenancy should remain excluded from our proposed scheme.[2]

                                                        (1)      Business tenancies.

                                                        (2)      Licensed premises.

                                                        (3)      Tenancies of agricultural holdings.

                                                        (4)      Long leases.

The relationship with other statutory schemes

Business tenancies

                             9.5              We anticipate there will be little controversy that our proposals should not attempt to cover business tenancies.[3] There are potential difficulties where premises are subject to mixed residential and business use.

                             9.6              The evolution of the regulation of agreements with mixed residential and business use is as complex as the evolution of the rest of housing law.[4] Initially business use was irrelevant. The Increase of Rent and Mortgage Interest (Restrictions) Act 1920 s 12(2)(c)(ii) provided.

the application of this Act to any house or part of a house shall not be excluded by reason only that part of the premises is used as a shop or office or for business, trade, or professional purposes.[5]

                             9.7              Part II of the Landlord and Tenant Act 1954 provides business tenants with some statutory protections. With the decontrol of residential tenancies under the Rent Act 1957, tenancies with joint residential and business use became protected by the 1954 Act. The Rent Act 1965, which restored statutory protection for residential tenants, excluded business tenancies.[6] This exclusion has been maintained through subsequent statutory regimes.

                             9.8              If the whole of the premises is used for business purposes the Landlord and Tenant Act 1954 Part II clearly applies. Where there is partial business use together with residential use the position is less clear. A series of cases culminating in the joint appeals Cheryl Investments Ltd v Saldanha and Royal Life Saving Society v Page[7] held that the 1954 Act applies to tenancies with mixed residential and business uses if the degree of business use is significant.

                             9.9              Two points may be made. First both the statutory framework and the cases are based upon conceptions of business used when the dividing line between home and work was more clearly drawn. It was certainly devised prior to the expansion of working from home deriving from self-employment, consultancy arrangements, portfolio working and internet and e-mail business use. Secondly the cases were argued at a time when the degree of security enjoyed by residential tenants was much greater than business tenants’ security.

                          9.10              Currently a residential tenant seeking some security of tenure who runs a web design company from home may gain greater protection from Part II of the Landlord and Tenant Act 1954 than the Housing Acts, particularly where he or she rents from a private sector landlord. This may suggest that the interface between business and residential use should be revisited. However, we are not aware of significant problems in practice.

                          9.11              We provisionally propose that our proposed statutory regime should exclude business tenancies, including those tenancies where there is mixed residential and business use where the business use is significant.

                          9.12              Under the present system, a tenancy is not a secure tenancy if a dwelling house consists of or comprises premises licensed for the sale of intoxicating liquors for consumption on the premises. Nor can such a dwelling house be the subject of an assured tenancy. As a result of the Landlord and Tenant (Licensed Premises) Act 1990 such a tenancy will be a business tenancy within Part II of the Landlord and Tenant Act 1954.

                          9.13              We provisionally propose that licensed premises be excluded from our scheme even when such premises include residential premises.

                          9.14              Tenancies of agricultural holdings are covered by the Agricultural Holdings Act 1986 and farm business tenancies by the Agricultural Tenancies Act 1995. The law governing agricultural tenancies is complex and driven by quite different policy considerations from housing law.

                          9.15              We provisionally propose that our proposals should not affect property subject to the Agricultural Tenancies Act 1995 or the Agricultural Holdings Act 1986.

                          9.16              Nevertheless if an agreement for renting a home includes agricultural or other land which is not subject to the Agricultural Holdings Act 1986, or the Agricultural Tenancies Act 1995, we consider that it should be subject to our proposed statutory scheme. This would change the current law that a tenancy of a dwelling let with agricultural land exceeding two acres is excluded from the assured tenancy scheme.[8] This should be so, regardless of the purpose of the letting.[9]

                          9.17              We provisionally propose that agreements for renting homes that include agricultural or other land not subject to the Agricultural Holdings Act 1986 or the Agricultural Tenancies Act 1995 should come within the statutory scheme we propose.

                          9.18              Long leases are clearly excluded from the secure tenancy regime.[10] They are indirectly excluded – by the low rent rule[11] – from the assured tenancy regime. We do not consider that long leases should fall within the scope of our proposed statutory scheme. Long leaseholders are akin to owner-occupiers and are subject to a range of other statutory provisions. [12]

                          9.19              We prefer the straightforward approach of the Housing Act 1985, section 115 which defines a long lease as one “granted for a term certain exceeding 21 years, whether or not it is (or may become) terminable before the end of that term by notice given by the tenant or by re-entry or forfeiture.” The definition of a fixed term exceeding 21 years[13] is useful as it conforms to a number of statutory provisions governing long leases. It makes the purpose of the exclusion very clear, and does not require updating in the way that references to rent levels inevitably do.

                          9.20              We provisionally propose that leases granted for a term certain exceeding 21 years should be excluded from our proposed statutory scheme.

                          9.21              In Part VI, we provisionally proposed that, subject to the discussion in this Part, our scheme should apply to all contracts for rent which conferred the right to occupy premises as a home.[14] This provisional proposal raises a number of issues that fall to be considered in determining the overall scope of our scheme. Here we discuss the question of retaining the lease-licence distinction as a test for determining the scope of the scheme. Other issues, such as the requirement for “rent”, and the requirement for the premises to be a person’s home, are discussed in the next section.

                          9.22              The issue considered here is whether the distinction between the lease and the licence should be retained as a test for deciding which agreements should come within the scope of our scheme, and those which should not.

                          9.23              We stress that we are not proposing to abolish the lease-licence distinction. It will retain its significance for distinguishing between types of agreement which create interests in land, which are therefore binding on third parties, and those which do not.

                          9.24              Historically the distinction between a lease and a licence has largely been a matter affecting the private rented sector. Following the model of the Rent Acts, section 1 of the Housing Act 1988 only applies to a “tenancy under which a dwelling-house is let…”. An early case[15] held that use of the word “let” signified that for the legislation to apply, a valid tenancy had to exist. Where there was a genuine licence, the protective legislation did not bite.

                          9.25              A series of cases in the 1980s established that the courts should decide that licences, which were in reality tenancies, were shams.[16] A consequence of the case law, however, is that landlords can never be entirely certain – unless a legal challenge is made in court – whether a purported licence will be found to be genuine, or a sham.

                          9.26              In Street v Mountford[17]the House of Lords made it clear that the three hallmarks of a tenancy were (a) exclusive possession, (b) for a term, (c) at a rent. The nature of the agreement was not to be determined by the label the parties give to it but by what the agreement signifies in law. The distinction between exclusive possession and exclusive occupation was that whilst exclusive occupation signified the sole right to use the premises, exclusive possession allowed the tenant to use the premises let to him to the exclusion of all others. As Lord Templeman put it in Street v Mountford the tenant can “keep out strangers and keep out the landlord”.[18]

                          9.27              The assured shorthold tenancy substantially changed landlord practice. Since landlords are able to charge market rents, and since tenants have relatively limited security of tenure, this has become the preferred form of letting.[19]

                          9.28              Section 79(3) of the Housing Act 1985 includes licences within the scope of secure tenancy, whether or not granted for a consideration. However, in Westminster City Council v Clark[20]the House of Lords heldthat a licensee could only qualify as a secure tenant if he or she had been granted exclusive possession of a separate dwelling house. This had the effect of making the lease-licence distinction more significant for the secure tenancy regime than perhaps Parliament had intended.[21]

The continuing significance of the lease-licence distinction

                          9.29              There are certain arrangements, generally regarded as exceptions to Street v Mountford,[22] where exclusive occupancy is granted, but which have been construed by the courts as not granting the exclusive possession essential for the creation of a tenancy, thereby ensuring they did not attract statutory protection. One key characteristic of exclusive possession is control of the property that is the subject of the agreement. The exceptions to Street v Mountford in essence involve acceptance of the idea that the landlord should retain control over the property despite granting exclusive occupation.

Almshouses

                          9.30              Rights to occupy almshouses[23] have been construed as providing personal rights to the occupiers rather than property rights. An almsperson occupies an almshouse as a beneficiary of a trust. Accordingly, although an almsperson may make periodic payments for accommodation, he or she is not a tenant and is not entitled to security of tenure under the Housing Act 1988.[24] For the purposes of the Housing Act 1985 (which includes within its ambit licences which grant exclusive possession[25]) there is a specific exclusion of almshouse licences from the secure tenancy regime.[26]

Housing for the elderly

                          9.31              Another example where the purpose of the accommodation involves a need for the landlord to retain control arises with old people’s homes. The landlord must be able to terminate agreements at the point where the landlord can no longer provide the occupier with necessary support. In Abbeyfield (Harpenden) Society v Woods[27]the occupier of a room in an old people’s home was held to be a licensee. This was explained in Street v Mountford by categorising the occupier as a lodger because of the level of personal services provided.

Service occupancies

                          9.32              Service occupancies can also fall outside of the definition of a lease, even if the normal requirements of rent, term and exclusive possession are met.[28] A person living in tied accommodation will not have a tenancy if it is necessary for him or her to live in the premises in question in order to carry out the employment duties or occupying the premises is a requirement imposed for the better performance of employment duties. Such occupancies are construed as service licences and are therefore excluded from the Housing Act 1988. They are specifically excluded from the secure tenancy regime by paragraph 2 of Schedule 1 to the Housing Act 1985.

                          9.33              A service licence that is expressly terminable on the cessation of employment comes to an end without any requirement of notice.[29] It was decided in Norris v Checksfield[30] that these types of service licence were not periodic licences and therefore were additionally excluded from the notice requirements of the Protection from Eviction Act 1977.[31]

Hostels

                          9.34              Hostels, in particular where support services are provided, have generally been excluded from statutory regulation on the grounds that accommodation is provided on licence. The existence of rules regulating the occupation of the premises and the managed nature of the provision means that these arrangements have been generally considered to fall outside statutory regulation. However mere provision of hostel type accommodation will not in itself be sufficient to rebut the presumption of a tenancy where the occupier has exclusive occupation.

                          9.35              In Bruton v Quadrant Housing Association[32] the House of Lords reasserted the principles set out in Street v Mountford.[33]The landlord, Quadrant Housing Association, provided short-term accommodation for the homeless and others in need of housing. Mr Bruton occupied a flat, part of a block owned by the London Borough of Lambeth and licensed to the housing association. The borough did not have the legal power to grant a lease or other proprietary interest to the housing association.[34] Mr Bruton signed an agreement that explained that the property was being offered on licence. Mr Bruton then sought to enforce the implied repairing obligations contained in section 11 of the Landlord and Tenant Act 1985. The implied terms in the Landlord and Tenant Act 1985 only apply to tenancies.[35] The landlord denied that it had granted a tenancy.

                          9.36              Their Lordships held that the agreement gave Mr Bruton a right to exclusive possession. The facts that the landlord was performing socially valuable functions, that it had agreed with the council not to grant tenancies and that it had no estate out of which it could grant a tenancy were not sufficient to enable the agreement to be construed as a licence. In particular their Lordships held that it was irrelevant that the landlord did not itself have any legal interest in the land. The court rejected the housing association’s argument that therefore it could not grant Mr Bruton a tenancy. There was no need for the agreement to create a legal estate that would bind third parties. An agreement can create exclusive possession. Therefore a tenancy as between the grantor and the grantee only was possible. What was critical was that the landlord had not retained sufficient control to prevent Mr Bruton having exclusive possession.

Hotels[36]

                          9.37              The extent of the control which management exercises over the room provided is also used to establish that hotel rooms are provided on licence. If the hotel management reserve the right to move the occupiers from room to room then even though the occupier will in general have exclusive use of the room the occupier will not have exclusive possession. In addition the provision in many hotels of a high level of service involving regular entry to the room prevents agreements from being leases. In Brillouet v Landless,[37] for instance, the facilities provided prevented the appellant from demonstrating that he had exclusive possession.

                          9.38              There is a particular type of occupancy of hotel rooms, which is long term and where a very low level of service is provided. Here it may be difficult to categorise the occupancy as a licence.

                          9.39              We have thought very carefully about whether the lease-licence distinction should retained as a means to determine which agreements should fall within our proposed scheme, and those which should fall outside. Considerable conceptual difficulties are caused by the distinction between exclusive occupation and exclusive possession.[38] It is not readily understandable by the public at large.

                          9.40              As we have already argued, we regard the contract between the landlord and the occupier as central to the operation of our scheme. We see no reason why any distinction should be drawn between a contract which comprises a lease and a contract which comprises a licence. This distinction is essential where the proprietary consequences of the contract are concerned, and should remain so, but it should not affect the statutory regulation of the contract as between the contracting parties themselves.

                          9.41              Arrangements that would currently be regarded as non-contractual licences would fall outside our scheme, because of the lack of a contract, for instance, a permission to occupy granted as an act of friendship.

                          9.42              We provisionally propose that the scope of our statutory scheme should be determined independently of the lease-licence distinction.

                          9.43              Where there are very strong practical and policy reasons for excluding particular categories of residential occupancy agreement from our proposed scheme, we think that the appropriate way to achieve this is through the use of a statutory list of exclusions. This will make it easier to determine which are inside and which are outside the scheme. It builds on the model provided by the Protection from Eviction Act 1977, which provides protection for all residential occupiers, regardless of their status as tenants or licensees but excludes certain occupiers from protection (such as the tenants of resident landlords) on the basis of statutorily defined circumstances.

                          9.44              Examples of situations where people are occupying premises as a place of residence, but which should not fall within the scope of housing legislation, include nursing homes, old people’s homes and hospitals, military barracks, and penal institutions. In the past, such arrangements have been excluded either as a result of the lease-licence distinction or as a result of the definition sections of the statutes.

                          9.45              Of these, penal institutions would be excluded from our proposed statutory scheme because of the requirement for a contract between the parties.

                          9.46              However contracts will often exist between a resident and the provider of nursing home accommodation, old people’s homes and hospitals. It would be inappropriate to include such residential provision within our statutory scheme. The primary purpose of the provision is to provide appropriate care for the resident. The provider has to be responsible for deciding whether the provision is appropriate and whether another type of residential accommodation would provide more appropriately for the needs of the resident. The provider must therefore be free, within the constraints of the contract, to terminate the agreement. Most of these establishments are now covered by the Care Standards Act 2000.

                          9.47              We provisionally propose excluding from the ambit of our proposed statutory scheme all residential provision which has to be registered under the Care Standards Act 2000.

                          9.48              We also consider for the avoidance of doubt that we should specifically exclude National Health Service hospitals from our proposed statutory scheme.

                          9.49              We provisionally propose excluding hospitals defined under the National Health Service Act 1977.

                          9.50              We also think that residential accommodation provided in military barracks should not be covered by our proposed statutory scheme.

                          9.51              We provisionally propose excluding military barracks from our proposed scheme of statutory regulation.

                          9.52              It should be stressed that other claims for exclusion from our scheme should be closely scrutinised by the Secretary of State.[39] We seek to prevent the growth of a large body of exceptions, thereby reintroducing the very complexity we are striving to avoid.

                          9.53              We provisionally propose that, where there are exceptional reasons for so doing, defined categories of agreement may be excluded from the scheme by the Secretary of State by incorporation in list of exclusions in a statutory instrument.

                          9.54              There are many situations where landlords wish to rent to those under the age of 18. Uncertainty is caused by the fact that leases cannot be granted to a person under the age of 18. A minor cannot hold a legal estate in land.[40]

                          9.55              While minors can enter validly binding contracts, where a rental agreement is under the assured tenancy regime they will have reduced security of tenure because they can only have a contractual licence, not a tenancy (the position is somewhat different in the public sector[41]). There are special rules to protect the position of minors, but they are bound to pay for necessaries[42] supplied under a contract. Landlords find the position confusing and are reluctant to treat minors on the same basis as over 18-year-olds.

                          9.56              If the distinction between leases and contractual licences is not used to determine the scope of the scheme, this will assist those who wish to rent homes to young people under the age of 18.

                          9.57              We provisionally propose that our proposed statutory scheme should explicitly include contracts for renting to those under 18 years of age.

                          9.58              As noted at the start of the previous section, in Part VI, we provisionally proposed that, subject to the discussion in this Part, our scheme should apply to all contracts for rent which conferred the right to occupy premises as a home.[43] Here we consider the extent to which this definition might be simpler than the existing statutory definition sections and thus avoid some of the judicial interpretation these provisions have attracted.[44]

The requirement for “rent”

                          9.59              Under English law, a contract cannot be a valid contract unless there is “consideration” – most commonly evidenced by a requirement for payment of money, but going wider than that. It might be thought, therefore, that it would not be necessary to provide specifically for a requirement that “rent” should be paid.

                          9.60              Our objective in requiring that “rent” be an essential feature of our statutory scheme is to ensure that the statutory scheme covers all those arrangements which are commonly accepted as falling within the scope of arrangements for renting housing, and excludes those which do not. The basis of renting agreements is that the right to occupy is purchased not by the payment of a substantial capital sum, as occurs with the purchase of a freehold or leasehold, but where payments are made on a regular basis (weekly, fortnightly, monthly) without a substantial pre-payment of capital.[45]

                          9.61              The word rent is directly linked, in many people’s minds, to the concept of tenancy. If our focus on the contract is agreed, and assuming that the distinction between a lease and a licence will not determine the boundary between agreements within our proposed scheme, and those outside, it should be clear that “rent” should not be linked to the concept of tenancy, but be defined more broadly.[46] We also think that “rent” should include other forms of consideration, such as payments in kind. In short, whether a payment is “rent” should be regarded as a matter of substance, rather than of form. This is why we have put the word in inverted commas.

                          9.62              We provisionally propose that our scheme apply to contracts which contain a requirement for the payment of “rent”.

                          9.63              We invite views on whether it is necessary to provide a definition of rent.

                          9.64              Under the present law, the concept of rent is used in other ways to determine the scope of the existing statutory regimes.

                          9.65              Once long leaseholds exceeding 21 years are excluded from our scheme,[47] we do not think it is necessary to exclude other agreements at low rents. Once rent is payable, then there is an enforceable contract and our statutory scheme should apply.

                          9.66              We provisionally propose that there should be no lower limit on the amount of rent payable under the contract for it to be included in our proposed statutory scheme.

High rents[48]

                          9.67              The system of statutory regulation that we propose is founded on principles of consumer protection that we think should apply to all residential contracts. It is our view that there is no need to exclude high rent properties from such a system.

                          9.68              We provisionally propose that there should be no upper limit on the amount of rent payable under the contract.

                          9.69              Purely gratuitous agreements – acts of friendship – should not fall within the scope of the scheme. But where rent of a non-monetary kind is paid (such as payments in kind), we see no reason why the agreement should not come within the scope of the scheme. Similarly, where there is consideration, but it is not in the nature of rent (such as a capital sum), it would not come within our scheme.

                          9.70              We provisionally propose that agreements at no rent would fall outside our proposed scheme.

                          9.71              In order to distinguish our scheme from those applying to commercial and agricultural property, we consider it important that our scheme should focus on property to be lived in or intended to be lived in as someone’s home.

                          9.72              The present law uses the term “dwelling”. But the House of Lords in Uratemps Ventures v Collins[49] recognised the idea of the home as the appropriate focus for housing legislation when they recently considered the meaning of the word. As Lord Irvine LC put it:

Dwelling is not a term of art, but a familiar word in the English language, which in my judgment in this context connotes a place where one lives, regarding and treating it as home.[50]

                          9.73              Or as Lord Millett said;

The first step is to identify the subject matter of the tenancy agreement. If this is a house or part of a house of which the tenant has exclusive possession with no element of sharing the only question is whether, at the date when the proceedings were brought, it was the tenant’s home. If so it was his dwelling. [51]

                          9.74              We provisionally propose that the word “home” be used in preference to the word “dwelling”.

                          9.75              We think our scheme should embrace all contracts that confer a right to occupy premises as a home. Thus a contract for the renting of a garage would not fall within the scope of our scheme even if the occupier lived in the garage, unless the contract clearly provided that the purpose of the contract was to give the occupier the right to live in the garage as his home.

                          9.76              We are of the view that this requirement be limited to giving the occupier the right to occupy the premises as a home. There should be no further requirement that the occupier be in physical occupation of the property for the agreement to come within the scope of our proposed statutory scheme.

                          9.77              Under the current law, both the assured and secure tenancy regimes require the tenant to occupy the dwelling house.[52] Clearly a tenant cannot be expected to be continuously present within the premises. Temporary absence does not mean that the premises have ceased to be occupied. However where there is a lengthy absence, this can lead to the inference that the property is no longer occupied. Then the tenant has to demonstrate that the property remains his residence, that he intends to return[53] and that there is physical evidence of that intention on the property.[54] This causes uncertainty that we regard as unnecessary and undesirable. So long as the occupier continues to abide by his or her contractual obligations, we see no reason why our scheme should not continue to apply.[55]

                          9.78              We provisionally recommend that the scheme should cover any agreement that confers a right to occupy premises as a home.

                          9.79              The current law provides that the statutory schemes only apply to the tenant’s “only or principal” home. In other words only one letting to a particular individual can be within the statutory scheme. We do not think that this should be part of the statutory definition for the purpose of our scheme. More and more people are having to live in different places, and we see no reason of principle why any agreement should not potentially come within the scheme propose.

                          9.80              We can understand that a landlord with limited housing resources available for letting may wish not to rent to a person who already has a home. But we think this is better achieved by the landlord putting a term in the contract requiring that the property is the only or principal home of the occupier. If it transpires that this term has been breached that would be a ground for seeking possession.

                          9.81              It might also be the case that one of the circumstances in which a landlord, who was normally required to create type I agreements, could be permitted to create a type II agreement would be in relation to a person who already has a home to live in. Equally we can envisage circumstances in which a landlord might be willing to enter additional type I agreements with a particular individual, for example in areas of low housing demand; or where a person was having to live in one area while working in another.

                          9.82              We provisionally propose that the scheme should not be limited to the occupier’s “only or principal” home.

                          9.83              We recognise that there are complexities caused where an occupier purports to pass his or her right to occupy onto another. We consider those complexities in our second consultation paper on the succession and transmission of agreement.

                          9.84              Currently there are statutory requirements that the dwelling must be let as a separate dwelling. The assured tenancy regime provides that where the tenant shares accommodation with someone other than the landlord, as long as there is some part of the accommodation that he or she has exclusive occupation of,[56] the tenant will still be protected under the rather cumbersome route of section 3 of the

1988 Act.[57] If the tenant is sharing with a sub-tenant then section 4 of the Housing Act 1988 provides protection for the tenant.

                          9.85              “Separateness” is only relevant in the context of the Housing Act 1988 where the tenant shares with the landlord. The tenant does not have “separate” accommodation if in addition to the accommodation he has exclusive possession of, he shares living accommodation. At this point, cooking facilities become relevant. In Uratemps Ventures v Collins[58] Lord Millett said:

For this purpose a kitchen is a living room, at least if it is possible to occupy it and not merely cook and wash up in it; so that a right to occupy a kitchen (as distinct from a right to make some limited use of its facilities) in common with the landlord will take the tenancy out of the Acts.[59]

                          9.86              Therefore the word “separate” can take out of protection tenancies which would otherwise be protected. However the resident landlord exclusion[60] provides a more extensive exclusion from statutory regulation.

                          9.87              “Separateness” is significant for the purposes of the Housing Act 1985 even where there is no resident landlord as there is no provision equivalent to the Housing Act 1988, section 3. Therefore there cannot be a secure tenancy where living accommodation is shared with other tenants. Where a tenant has a bedsitting room with a small bathroom attached as in Central YMCA Housing Association Ltd v Saunders[61] but shares kitchen facilities the tenant is excluded from the protection of the secure tenancy regime.

                          9.88              Currently the definition of secure tenancy also provides the basis for the right to buy. Thus the requirement that the premises occupied by the secure tenant are clearly identifiable is very important. We consider that the right to buy legislation should not distort the scope of security of tenure of type I agreements and would be better provided for within separate legislation.

                          9.89              We provisionally propose that there should be no specific additional requirement that the home be separate from that of others (leaving aside the special case of a resident landlord).

                          9.90              We have considered whether the definition of the agreements to be covered by our scheme should specifically refer to an individual, as is the case with the Housing Acts 1985 and 1988. We take the view that the fact that the agreement will confer a right to occupy premises as a home necessarily implies that the agreement must be with an individual, as occupation of premises by companies does not have the quality of occupation “as a home”.

                          9.91              We provisionally propose that the definition of the agreements covered by our proposed scheme should not include specific reference to occupation by an individual.

                          9.92              The current assured and secure tenancy regimes contain long lists of statutory exclusions.[62] If our objective of simplifying the current law is to be achieved, we are anxious to reduce the number of statutory exclusions from our scheme. One of the reasons for placing some categories of tenancy outside the current regimes is a recognition that the landlord should be able to regain possession quickly. Thus the proposals for the reform and simplification of this area of law are to a degree dependent upon whether the six months’ moratorium on the ability of a landlord to obtain a possession order from the court is or is not a feature of type II agreements.[63]

                          9.93              Our discussion of these exclusions is structured as follows. First we discuss those exclusions which we consider can be modernised and simplified regardless of whether there is a six months’moratorium.Secondly, we consider the remaining exclusions andpresent two options: the first based on there being a moratorium, the second assuming that there is not.

                          9.94              The current situation is that holiday lets are excluded from both the Housing Act 1988,Schedule 1, paragraph 9 and from the Protection from Eviction Act 1977 by section 3A(7)(a). Although there was some evidence of holiday lets being used as a device to evade the Rent Acts, we are not currently aware that this creates any significant problem in practice. There is a very strong argument for retaining their exclusion to facilitate this type of commercial activity.

                          9.95              We propose that holiday lets should be excluded both from our proposed statutory scheme and from the Protection from Eviction Act 1977.

                          9.96              Agreements made with those who enter property as trespassers are currently excluded from the Protection from Eviction Act 1977[64] and the Housing Act 1985.[65] The lease-licence distinction operates to exclude such occupancies from the Housing Act 1988. There are sound social policy reasons for such exclusions.

                          9.97              We provisionally propose that agreements granted as a temporary expedient to a person who entered the premises as a trespasser should be excluded both from our proposed statutory scheme and from the Protection from Eviction Act 1977.

                          9.98              We noted above[66] that the residents of almshouses – who traditionally have been granted licences rather than tenancies – are specifically excluded from the Housing Act 1985, and are indirectly excluded from the Housing Act 1988 by the lease-licence distinction. They are not however excluded from the Protection from Eviction Act 1977. Thus an almshouse management would have to obtain a court order to lawfully regain possession of accommodation which the licensee is unwilling to leave.

                          9.99              In view of our proposals relating to the type II agreement, we are not convinced that there remain sound policy arguments for the continued exclusion of the residents of almshouses from statutory regulation.

                      9.100              We provisionally propose that the residents of almshouses should not be excluded from our proposed statutory scheme.

                      9.101              We also noted above[67] that hostels are excluded from the assured and secure tenancy regimes. The Protection from Eviction Act 1977 excludes public sector hostels provided on a dormitory basis with the provision of board or the facilities for the preparation of food,[68] but includes other hostel arrangements.

                      9.102              We consider that it is essential that the system of statutory regulation we propose should facilitate the provision of supported accommodation for all kinds of short-term social project, for example to help the homeless or the drug addicted move from a life on the streets to more a conventionally based living environment. Although for convenience we use the expression “hostel”, the intention would be to exclude all forms of modern supported accommodation, including, for instances, foyers.

                      9.103              We provisionally propose that all projects providing an appropriate level of supported accommodation to vulnerable groups should be excluded our scheme and from the Protection from Eviction Act 1977.

                      9.104              We further provisionally propose that the definition of “hostel” inthe Protection from Eviction Act 1977 should be modernised to reflect the current practice of providing supported provision with an increasing use of self-contained accommodation.

                      9.105              It would be advantageous to have a definitive list of such projects, to avoid the status of a project depending on litigation. One way of achieving this would be for the legislation to authorise the Secretary of State to maintain a list of projects which satisfy the criteria, which would be definitive of the status of the project for all purposes. A decision of the Secretary of State in relation to the list would be subject to judicial review, so a project refused listing, for instance, could subject the Secretary of State’s decision to judicial scrutiny.

                      9.106              We invite views on whether the Secretary of State should have the power to maintain a list of projects which he or she considered met the criteria. The inclusion of a project on the list would be definitive of the status of the project as excluded as supported accommodation.

                      9.107              Providers of supported housing projects should be encouraged to provide their clients with a written agreement setting out their rights and responsibilities and the limited security similar to the agreements to be used in the scheme we propose. But this should be a management decision, not regulated by statute.

                      9.108              These are discussed in the context of our proposals for a general probationary agreement.[69]

Other exclusions: (1) assuming the six months’ moratorium is retained

Properties with a resident landlord

                      9.109              If the six months’ moratorium is retained, we do not consider that we are able to propose any change to the current exclusion from statutory regulation of tenants of resident landlords. Resident landlords provide a valuable source of accommodation. We think it right that landlords who share access and stairways with occupiers should have a simple method of termination during the initial six months’ of the agreement.

                      9.110              If there is a moratorium, we provisionally propose that occupiers of resident landlords be excluded from our proposed scheme.

                      9.111              We consider that the current exclusion from the Protection from Eviction Act of those tenants who share living accommodation with their landlord should also remain as it is.

                      9.112              If there is a moratorium, we provisionally propose that the current exclusion of occupiers who share accommodation with resident landlords from the Protection from Eviction Act 1977 should be maintained.

                      9.113              The requirement of mutuality means that we do not consider that we can propose a requirement upon the co-operative that it lets without access to a simple method of termination during the initial six months of the agreement.

                      9.114              If there is a moratorium, we would provisionally propose that those to whom a right of occupation has been granted by a fully mutual housing association should be excluded from our proposed scheme.

                      9.115              The tenants of fully mutual housing associations should continue to be included within the provisions of the Protection from Eviction Act 1977.

                      9.116              We consider that the balance of interest between university landlords and their students would be destabilised if there were no simple method of terminating agreements of student accommodation during the initial six months.Similar considerations apply to agreements for students provided by local authorities.

                      9.117              If there is a moratorium, we provisionally propose that agreements by educational institutions to students should be excluded from the scope of our statutory scheme.

                      9.118              There is, currently, uncertainty whether the provisions of the Protection for Eviction Act 1977 apply to students.In Mohammed v Manek,[70]the Court of Appeal held that the use of hotel rooms to accommodate homeless persons on a temporary basis was excluded from the Protection from Eviction Act 1977 since the premises were not occupied as a dwelling. Students are also accommodated on a temporary basis. Thus it could also be argued that lettings to students also fall outside the Protection from Eviction Act 1977. However it is difficult to see how this interpretation of dwelling is reconcilable with that of the House of Lords in Uratemps Ventures v Collins.[71]

                      9.119              For the avoidance of doubt we provisionally propose that students who rent from educational institutions or local authorities should be included within the provisions of the Protection from Eviction Act 1977.

                      9.120              The management of temporary accommodation of homeless persons to whom local housing authorities owe duties under Part VII of the Housing Act 1996 means that landlords will require a simple method of termination during the first six months of the agreement.

                      9.121              If there is a moratorium, we provisionally propose that accommodation provided on a temporary basis for homeless persons be excluded from the scope of our proposed scheme, but continue to be protected by the Protection from Eviction Act 1977.

                      9.122              Certain lettings are excluded from the secure tenancy regime within the Housing Act 1985 because of the temporary nature of the provision made. These include

                                                        (4)      temporary accommodation during works for non-secure tenants.[72]

These arrangements are not excluded from the Protection from Eviction Act 1977.

                      9.123              The temporary nature of the provision means that social landlords will require a simple method of termination during the first six months of the agreement.

                      9.124              If there is a moratorium, we provisionally propose that the agreements for the temporary purposes currently excluded from the secure tenancy regime should be excluded from the scope of our proposed scheme but should be included within the Protection from Eviction Act 1977.

                      9.125              Accommodation for asylum seekers provided under Part VI of the Immigration and Asylum Act 1999 is excluded from security of tenure by paragraph 12A of Schedule 1 to the Housing Act 1988 and paragraph 4A of Schedule 1 to the Housing Act 1985. Such accommodation is also excluded from the Protection from Eviction Act 1977.[73] The management of accommodation of asylum seekers means that landlords will require a simple method of termination during the first six months of the agreement.

                      9.126              If there is a moratorium, we provisionally propose that accommodation provided for asylum seekers should fall outside our proposed statutory scheme.

                      9.127              Policy in relation to asylum seekers is controversial, and not central to the concerns of this project. We do wonder, however, whether asylum seekers should be entitled to procedural protections contained in the Protection from Eviction Act 1977.

                      9.128              We invite views on whether asylum seekers should no longer be excluded from the Protection from Eviction Act 1977.

                      9.129              Serious constraints would be placed on the landlord of a service occupier who required the employee to occupy the premises for the better performance of his or her duties, if he or she was not able to use the notice-only basis for the termination of the agreement until the initial six months of the agreement had passed.

                      9.130              If there is a moratorium, we provisionally propose that service occupiers who are required to occupy the premises for the better performance of their duties be excluded from the scope of our proposed scheme.

                      9.131              We do consider however that service occupiers might be entitled to the procedural protections in the Protection for Eviction Act 1977.

                      9.132              We provisionally propose that all service occupancies should be protected by the Protection from Eviction Act 1977.

Properties with a resident landlord[74]

                      9.133              We consider that in principle it remains necessary to exclude the occupiers of resident landlords from our proposed scheme. Theexclusionshould, however, be limited to those resident landlords who occupy the property as their only or principal home. The families of resident landlords should also be included on the same basis.

                      9.134              Whilst the exclusion provides an important safeguard for the resident landlord and an encouragement to let rooms it is not appropriate to extend it to situations where the landlord has somewhere else to live during the statutory notice period that attaches to the notice-only ground for possession.

                      9.135              Thescopeof the current exclusion is complicated as a result of the Protection from Eviction Act 1977. Only occupancies where the resident landlord actually shares accommodation[75] with the tenant are excluded from the requirements of the Protection from Eviction Act.

                      9.136              We consider the removal of the six months’moratorium on obtaining an order for possession would provide the opportunity to simplify the law. We think that solong as the resident landlord who does not share living accommodation (including facilities such as bathrooms and kitchens) with the tenant is able to commence proceedings from the beginning of the agreement we consider that he or she has adequate protection.

                      9.137              It is only those landlords who are actually sharing accommodation with occupiers who need the very speedy end to the relationship which exclusion both from our scheme and from the Protection from Eviction Act 1977provides.

                      9.138              If there is no moratorium, we provisionally propose that anagreement should be excluded from our scheme and from the Protection from Eviction Act 1977 where the landlord shares accommodation[76] with the occupier and occupies the property as his only or principal home; or a member of the landlord’s family shares accommodation with the occupier and occupies the premises as his only or principal home.

                      9.139              If there is no moratorium, we further provisionally propose that all other agreements made by resident landlords should fall within the scope of our proposed scheme (as type II agreements).

Fully mutual housing associations (housing co-operatives)[77]

                      9.140              The argument for excluding the tenants of fully mutual housing associations from regulation arises from the mutuality of the provision and the dependence on personal co-operation between the members of the co-operative for the effective functioning of the organisation. We consider that if the notice-only basis for possession proceedings were available from the commencement of the agreement, the current exclusion from statutory regulation is no longer necessary.

                      9.141              If there is no moratorium, we provisionally propose that the occupiers of fully mutual housing associations (housing co-operatives) should no longer be excluded from statutory regulation.

                      9.142              Lettings by educational institutions[78]and local authorities to students who are pursuing, or intending to pursue a course of study have long been excluded from statutory regulation. The purpose of the exclusion is to ensure that accommodation specifically provided by educational institutions remains available for the use of successive generations of students.

                      9.143              Currently the security status of such lettings to students is at best unclear. We accept that these landlords need to act promptly against recalcitrant students. Our proposals on anti social behaviour may be relevant here.[79] More generally universities and local authorities should be able to ensure through the terms of the contract that they keep appropriate control over their student occupiers. This could include not only provisions about behaviour and the treatment of property, but also provisions that the right to occupy was suspended during vacation periods.

                      9.144              Breach of the contract would entitle the landlord to seek possession, In addition the availability of the notice only ground for termination of possession without the six months’ moratorium would further protect the landlord’s position.

                      9.145              If there is no moratorium, we provisionally propose that lettings by educational institutions or by local authorities to students should come within scope of the type II agreement.

                      9.146              Lettings of student accommodation to others during vacation periods would fall outside the scheme as they would normally be holiday lets.

                      9.147              Use of facilities for conferences would fall outside the scheme as this would not be use “as a home”.

                      9.148              Under certain circumstances local housing authorities have a statutory obligation to provide temporary accommodation for homeless persons under Part VII of the Housing Act 1996.[80] This accommodation may either be provided from their own stock or by registered social landlords or from the private sector.

                      9.149              Where temporary housing is provided, it is generally not excluded from the Protection from Eviction Act 1977.[81] Therefore landlords currently have to give occupiers four weeks’ notice to quit and seek a court order in order to evict.

                      9.150              We believe that the simplicity and certainty of eviction that our proposed type II agreement provides will be advantageous to landlords.The availability of the notice-only basis for termination from the commencement of the agreement will be a useful tool for landlords.

                      9.151              If there is no moratorium, we provisionally propose that accommodation provided on a temporary basis for those to whom duties are owed under Part VII of the Housing Act 1996 should be provided on the basis of a type II agreement.

                      9.152              Certain lettings are currently excluded from the secure tenancy regime within the Housing Act 1985 because of the temporary nature of the provision made.[82]These arrangements are not excluded from the Protection from Eviction Act 1977.[83]

                      9.153              Our view is that these particular short-term arrangements should be exceptions to the requirement that social landlords let on type I agreements. There seems to be no justification for excluding them from the limited security of the type II lettings when the notice-only basis for termination is available from the commencement of the tenancy.

                      9.154              If there is no moratorium, we provisionally propose that lettings for the for the temporary purposes currently excluded from the secure tenancy regime should be made as type II agreements.

                      9.155              Clearly there may be a need to manage the accommodation of asylum seekers, in the same way that other accommodation provided on a short-term, temporary basis is managed.

                      9.156              We consider that the availability of the notice only basis for the termination of possession from the commencement of the tenancy will enable the landlord to do this.But we accept that provision of accommodation to asylum seekers may raise policy questions that go beyond the scope of this project.

                      9.157              If there is no moratorium, we invite views on whether accommodation provided for asylum seekers should be on the basis of type II agreements.

                      9.158              Where employees have the right to challenge a dismissal as unfair, then it would also seem appropriate that there should be some notice requirement for the termination of the associated accommodation rights. Even where an employee is summarily dismissed for gross misconduct, he or she will still be able to appeal and therefore the employer cannot expect instant access to the service accommodation.

                      9.159              Where employees have no right to challenge a dismissal on the basis that it was unfair, they can still challenge their dismissal on the basis of discrimination legislation or using trade union protection.

                      9.160              We consider that if the notice-only basis for seeking an order for possession is available without the six months’ moratorium on obtaining the order this gives employers sufficient control of their accommodation. In addition the terms of the housing agreement could provide that any breach of the employment contract would be a breach of the housing agreement. In any event, proper recruitment of replacement staff always takes some time. Therefore we consider that on balance service employees should benefit from type II agreements.

                      9.161              If there is no moratorium, we provisionally propose that service occupancies should come within the scope of our scheme as type II agreements.

                      9.162              We can summarise our proposals for excluding agreements from the scheme as follows.

                      9.163              It can be seen that the removal of the six months’ moratorium provides considerably greater scope for the simplification and clarification of the current complex statutory provisions. This therefore provides a very important argument in favour of their being no six months’ moratorium on the granting of a possession order in the type II agreement. We regard the decision between the two sets of exclusions as a consequence of the primary choice, whether or not there should be a moratorium at all in the type II agreement. We ask consultees to take account of this factor when coming to a view on the question posed at paragraph 8.27 above.

                      9.164              One group of tenancies, Crown tenancies, (including tenancies of Government departments,[84] but not including tenancies under the management of the Crown Estate Commissioners which were brought into statutory regulation as a result of the Rent Act 1980) are currently excluded from statutory regulation.

                      9.165              We understand that the letting and estate management practices of the landlords that fall within this class are in practice analogous to the statutory scheme of protection. Nonetheless we think that, given the need to modernise the law, it is hard to justify the continued exclusion of this class of tenancies.

                      9.166              We provisionally propose that Crown tenancies should no longer be excluded from statutory regulation.