The Law Commission

The Law Commission

(Consultation Paper No 162)

RENTING HOMES
1: STATUS AND SECURITY

A Consultation Paper

London: The Stationery Office

The Law Commission was set up by section 1 of the Law Commissions Act 1965 for the purpose of promoting the reform of the law.

The Law Commissioners are:

The Right Honourable Lord Justice Carnwath CVO, Chairman
Professor Hugh Beale, QC
Mr Stuart Bridge
Professor Martin Partington
Judge Alan Wilkie, QC

The Secretary of the Law Commission is Mr Michael Sayers and its offices are at Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ.

This consultation paper, completed on 28 March 2002, is circulated for comment and criticism only. It does not represent the final views of the Law Commission.

The Law Commission would be grateful for comments on this consultation paper before 12 July 2002. Comments may be sent –

By post to:

Helen Carr
Law Commission
Conquest House
37-38 John Street
Theobalds Road
London
WC1N 2BQ

Tel: 020-7453-1290
Fax: 020-7453-1297

By e-mail to:

housingandadmin@lawcommission.gsi.gov.uk

It would be helpful if, where possible, comments sent by post could also be sent on disk, or by e-mail to the above address, in any commonly used format.

All responses to this Consultation Paper will be treated as public documents, and may be made available to third parties, unless the respondent specifically requests that a response be treated as confidential, in whole or in part.

The text of this consultation paper is available on the Internet at:

http://www.lawcom.gov.uk

CONTENTS

PART I: INTRODUCTION	Part I
Background to the project	1.1
Scoping paper	1.6
Terms of reference	1.8
Timetable for the project: a phased approach	1.9
Outcomes	1.12
Law reform and social policy	1.14
Defining housing law: the search for principle	1.17
Guaranteeing security of tenure	1.20
Possession proceedings – the need for due process	1.25
The consumer perspective	1.32
Human rights	1.36
Outline of the scheme	1.37
Focus of our proposals	1.44
Limits to the contractual approach – the need for a jurisdiction for the court	1.45
Terminology	1.48
Contents of the consultation paper	1.50
The continued importance of the rented sector of the housing market	1.64
England	1.64
Wales	1.74
Comment	1.78
Issues not covered in this paper	1.83
Disrepair	1.84
Tenancy deposits	1.85
Specialist courts	1.86
Rent control and regulation	1.88
Housing benefit	1.89
Exempt sectors of the market	1.90
Right to buy	1.91
Homelessness	1.94
Regulatory impact	1.95
Acknowledgements	1.99
PART II: THE EVOLUTION OF HOUSING LAW	Part II
Introduction	2.1
First legislative initiatives – the 19th century	2.3
Housing conditions and public health	2.3
The regulation of the private rented sector 1915 – 1980	2.11
Rent control, illegal premiums and security of tenure	2.11
Exclusions – payments for board, attendance and the use of furniture	2.15
Moves to decontrol	2.17
New protective measures	2.19
Consolidation	2.30
Introduction of housing benefit – rent allowances and rent rebates	2.31
Housing conditions	2.34
The impact of protective legislation	2.36
The development of the public rented sector 1920-1980	2.41
Discretion v rights	2.46
A national rent rebate scheme – subsidising tenants	2.49
The development of the housing association sector to 1980	2.53
Security of tenure	2.58
Rent regulation	2.61
Rent allowances	2.63
Housing associations – a hybrid	2.64
Developments from 1980 to the present day	2.65
The private rented sector	2.69
The local authority sector	2.85
Introductory tenancies	2.95
The housing association/registered social landlord sector	2.97
Large Scale Voluntary Transfers	2.107
Conclusions: lessons of history	2.119
The need for regulation	2.119
Legislative strategies	2.122
Changing contexts 1: the private sector	2.125
Changing contexts 2: the local authority sector	2.134
Changing contexts 3: housing associations	2.137
The rise of a consumer perspective	2.138
Other issues	2.142
PART III: HOUSING STATUS AND SECURITY OF TENURE: PROMOTING SIMPLIFICATION	Part III
Introduction	3.1
The challenge of simplification	3.4
Housing status: the statutory schemes	3.11
Secure tenancies	3.12
Introductory tenancies	3.13
Assured tenancies	3.14
Assured shorthold tenancies	3.15
Rent Act protected tenancies	3.17
Excluded tenure groups	3.18
Tenancies falling within other statutory schemes	3.19
Lettings for particular purposes	3.22
Tenancies which have been left outside the schemes	3.24
Only or principal home	3.25
Other exclusions from the secure tenancy regime	3.26
Other exemptions: Crown tenancies	3.27
Licensees	3.28
Protection from Eviction Act 1977	3.29
Total exclusion from statutory regulation	3.33
Security of tenure and grounds for possession	3.38
Secure tenancies	3.39
Assured tenancies	3.42
Rent Act protected tenancies	3.44
Occupiers outside the principal schemes	3.47
The assured tenancy, secure tenancy and rent act tenancy schemes compared	3.48
Use of mandatory grounds	3.48
Notices seeking possession	3.52
Drafting differences	3.65
Differences not relating to security of tenure	3.73
The project goal	3.74
PART IV: THE APPROACH IN OTHER JURISDICTIONS	Part IV
Housing (Scotland) Act 2001	4.4
Creating one form of social tenancy	4.10
Simplification and modernisation	4.13
Anti social behaviour	4.24
Tenants' Rights	4.34
Short Scottish secure tenancies	4.44
Commonwealth legislation	4.44
Consumer perspective	4.47
Administrative support	4.50
Comprehensive Provision	4.52
Exclusions	4.55
Issues addressed	4.57
Procedures	4.59
Requirements for writing	4.61
Dispute resolution	4.65
Alternative dispute resolution	4.68
Deposits	4.70
Anti social behaviour	4.74
Minors and tenancies	4.84
Conclusion	4.85
PART V: THE IMPACT OF HUMAN RIGHTS LAW	Part V
Introduction	5.1
The relevant convention articles	5.4
Article 8	5.5
Article 8(1)	5.11
Justification under Article 8(2)	5.14
Article 6	5.17
Article 1 of the first protocol	5.36
The impact of the Convention in domestic law	5.42
The nature of registered social landlords	5.42
The approach to Article 8(1)	5.54
The assured shorthold regime	5.56
Alconbury and the requirements of Article 6	5.58
Human rights and housing law: some conclusions	5.70
PART VI: THE CONSUMER APPROACH: FOCUSSING ON THE AGREEMENT	Part VI
Introduction	6.1
The need for a contract	6.5
The application of the law on unfair contract terms to housing agreements	6.11
The purpose of applying a consumer law approach to housing	6.11
Unfair contract terms law: the legislative background	6.21
Relationship with our proposed default terms	6.25
Requirements of transparency and fairness	6.27
Consequences of unfairness	6.36
Limitations	6.40
Other factors making terms invalid	6.56
Principles of contract law	6.56
Shams	6.57
Discrimination law	6.58
Human Rights Law	6.59
The need for a written agreement	6.60
Requirements for validity	6.63
Requirements for provision of information about the terms of the agreement	6.72
Requirements for provision of information about the landlord	6.79
Recording rent payments	6.83
The terms of the agreement	6.89
Part A – the core terms	6.101
Part B – compulsory terms	6.106
Part C – negotiable/default terms	6.112
Sanctions	6.122
Failure to provide an agreement	6.125
Failure to provide information about the landlord	6.136
Variation of agreements	6.140
Rent variations	6.145
Non-rent variations	6.149
Effect of a variation	6.156
Ensuring respect for the contract	6.159
The potential problem	6.159
Possible approaches	6.164
Problems	6.171
Alternative dispute resolution	6.176
PART VII: THE TYPE I AGREEMENT: THE SECURITY REGIME	Part VII
Introduction	7.1
The type I agreement	7.5
A single social tenancy	7.6
A single long-term agreement	7.7
Use of the type I agreement	7.11
Fixed term type I agreements?	7.12
Court orders for possession: discretionary or mandatory?	7.18
Serious rent arrears	7.27
Mortgage default	7.45
Other mandatory grounds	7.54
Security of tenure: the terms in the agreement	7.58
Occupier default	7.60
Social policy	7.67
Estate management.	7.77
The powers of the court	7.84
The "ghost" grounds for possession	7.87
Mapping existing agreements onto the new scheme	7.96
Summary	7.97
PART VIII: THE TYPE II AGREEMENT: THE SECURITY REGIME	Part VIII
Introduction	8.1
The type II agreement	8.2
Periodic and fixed term agreements	8.6
Use of the type II agreement	8.9
The court's powers to order possession	8.11
Accelerated possession proceedings	8.13
The six months' moratorium	8.15
Security of tenure: the terms in the agreement	8.30
Circumstances justifying a mandatory possession order	8.32
Circumstances justifying a possession order on a discretionary basis	8.47
Break clauses	8.60
Expiry of fixed term tenancies	8.69
Summary	8.79
PART IX: THE SCOPE OF THE SCHEME	Part IX
Introduction	9.1
The relationship with other statutory schemes	9.5
Business tenancies	9.5
Licensed premises	9.12
Agricultural tenancies	9.14
Long leases	9.18
Should the lease-licence distinction be retained as a test for determining the scope of the scheme?	9.21
Background	9.24
The continuing significance of the lease-licence distinction	9.29
Should the lease-licence distinction be used to determine the scope of our proposed scheme?	9.39
Exclusions	9.43
Making agreements with those under the age of 18.	9.54
Other definitional issues affecting the scope of the scheme	9.58
The requirement for "rent"	9.59
The requirement for the premises to be a person's home	9.17
Conferment of a right to occupy	9.75
Only or principal home?	9.79
Separateness?	9.84
Individual?	9.90
Statutorily excluded categories of agreement	9.92
Exclusions not affected by the six months' moratorium	9.94
Other exclusions: (1) assuming the six months' moratorium is retained	9.109
Other exclusions: (2) assuming the six months' moratorium is removed	9.133
Summary	9.162
Crown tenancies	9.164
PART X: TERMINATING AGREEMENTS	Part X
Introduction	10.1
Due process – the notice requirements	10.3
Why have statutory requirements for notice?	10.8
Lengths of notice periods	10.12
Replacing common law rules	10.21
Service of notices	10.26
Making landlords' notices more transparent	10.27
Termination by the occupier	10.49
Occupier's notice to quit	10.49
Exercise of break clause by the occupier	10.53
Consequences of occupier's failure to leave	10.56
Occupier's response to a repudiatory breach	10.58
Express surrender	10.62
Abandonment	10.65
PART XI: USING THE NEW AGREEMENTS	Part XI
Introduction	11.1
Social landlords	11.4
Exceptions	11.16
Probationary agreements	11.16
Agreements falling outside the scope of the type I agreement.	11.45
Other cases	11.51
Default position	11.54
Private landlords	11.57
Type I agreements	11.62
Type II agreements	11.65
Scope for operation of the market	11.69
PART XII: THE POWERS OF THE COURTS	Part XII
Introduction	12.1
The Civil Procedure Rules: recent reforms	12.3
The exercise of discretion	12.7
Structuring discretion	12.11
Our proposals	12.27
Application of the structured discretion approach to the court's extended discretion: enforcement proceedings	12.29
Rent arrears and suspended possession orders	12.33
Enforcement	12.42
The point at which the agreement ends under a possession order	12.43
Obtaining warrants for possession without a hearing	12.53
PART XIII: ANTI SOCIAL BEHAVIOUR	Part XIII
Introduction	13.1
The need to combat anti social behaviour	13.3
The current law	13.10
Which landlords?	13.16
Social landlords	13.17
Private landlords	13.20
A general duty to deal with anti social behaviour	13.23
A general duty	13.25
A contractual duty	13.33
Dealing with serious anti social behaviour	13.37
The concept of serious housing related anti social behaviour	13.38
Type II (probationary) agreements	13.41
Type I agreements	13.61
PART XIV: MAPPING EXISTING AGREEMENTS	Part XIV
ONTO THE NEW SCHEME
Secure tenancies and fully assured tenancies let by registered social landlords	14.3
Compulsory general use of type I agreements	14.4
Freedom to choose type I or type II agreements	14.10
Other local authority and registered social landlord tenants	14.15
Private fully assured tenancies	14.17
Assured shorthold tenancies	14.19
Safeguarding the terms of the old tenancy	14.22
Rent Act protected tenancies	14.26
Do the circumstances permitting possession under the type I agreement cover all the Rent Act cases?	14.28
Would the circumstances permitting possession under the type I agreement represent a weakening of the rights of Rent Act protected tenants?	14.38
Conclusion	14.40
The transition to the new scheme	14.43
PART XV: SUMMARY OF PROVISIONAL PROPOSALS AND CONSULTATION QUESTIONS	Part XV