Part IV          

the right to take in lodgers

Introduction

                    4.1               Under the Housing Act 1985, secure tenants have the right to take in a lodger.[1] The landlord authority’s consent is not required. The only constraint is that the premises should not, as a result, become statutorily overcrowded.[2]

                    4.2               This is now a well-established tenants’ right. Successive governments have considered that it advances socially useful objectives. For instance,

                                            (1)             it allows occupiers of local authority housing to earn some additional money,[3]

                                            (2)             it makes flexible and informal provision for better use of the accommodation, and

                                            (3)             it is conducive to labour market mobility.

Type i agreements

                    4.3               In terms of the scheme we propose in CP 162, it also fits with the high level of personal autonomy that the type I agreement is aimed at securing for occupiers.

                    4.4               As the type I agreement is designed to substantively replace both local authority secure tenancies and fully assured tenancies let by registered social landlords, there is, necessarily, a choice between taking the right away from the category of social tenants who currently enjoy it (secure tenants), or giving it to those that do not (fully assured tenants). We think the former would be unacceptable.

                    4.5               We provisionally propose that the right of a person to take in a lodger should be extended to all those with type I agreements, by means of a compulsory term to that effect.

                    4.6               One of the notable features of the current law is that, while the right to take in a lodger is found in the Housing Act 1985, there is no statutory definition of “lodger”. The term is, of course, a familiar one in common usage. The question we have to consider is whether, for the purpose of our scheme, a statutory definition is necessary.

                    4.7               Although not defined in the Housing Act 1985, the term “lodger” is not unknown in law.[4] Woodfall suggests that the test whether a person is a lodger, as opposed to a sub-tenant, must be determined by the degree of control retained by the householder over the rooms which the lodger occupies.[5] The difficulty, from the point of view of this project, is that existing interpretations of the concept are set within existing principles of housing law. Thus, “lodger” falls within the category of “licensees” rather than tenants - essentially because lodgers do not have that degree of exclusive possession which characterises tenancy.

                    4.8               For the purpose of the scheme we are proposing we have sought, so far as possible, to argue that the distinction between tenancies and licenses should be ignored, and that, other things being equal, all contractual occupation agreements should fall within the scope of the scheme.

                    4.9               One way of attempting a definition of “lodger” might be to consider the nature and extent of services provided by the landlord to the lodger. If the landlord cleaned the lodger’s rooms, or provided meals for the lodger, such services might be indications of the existence of a lodging agreement. The problem here would be to define the nature of services which would be relevant. This approach could also lead to argument about whether particular services were actually provided.

                4.10               A second approach might be to look less at the provision or otherwise of specific services, but more generally at the degree of control the landlord exercises over the lodger. This would build on the approach already familiar in the law. The problem with this is that it lacks precision and may make it hard to determine, in any given case, whether a person is a lodger or has some other status.

                4.11               A third approach, which we prefer, is to equate “lodgers” with those excluded from our new scheme because of sharing livingaccommodation with a landlord. This has the significant merit of being relatively straightforward and easy to understand.[6] In CP 162, we acknowledged that there would have to be some exceptions to the general approach that all occupation agreements should come within the scheme we propose. In particular we suggested that a person who shares accommodation with a resident landlord should not have any statutory protection, but should be able to be lawfully evicted by the resident landlord with the minimum of legal formality.[7]

                4.12               We said, in CP 162 that, for these purposes, a resident landlord would be a person who occupies the premises as their only or principal home. We further observed that the only situation where the resident landlord would be able to remove the sharer without having to seek a court order would be where the occupier was actually occupying the premises as his home.[8]

                4.13               This still begs a number of questions. For example if an occupier takes in a lodger, but then goes away for a holiday, will the occupier remain in occupation? Presumably yes, as the absence from the home did not indicate that the occupier was going to reside elsewhere “as a home”. Would the situation be different if the occupier went abroad for a fixed period to take up employment? Or was taken into hospital? Or was sent to prison? It could be argued that in all these situations, the absence from the home did not destroy the intention to occupy the premises as a home. Would it make a difference if the person was away for 6 months? A year? Five years? Could the quality of “lodging” be lost by a long absence?

                4.14               To meet these theoretical possibilities, it might be suggested that any person who comes in to premises as a lodger simply retains the status of lodger, whatever the resident landlord decided to do.

                4.15               This suggestion in turn raises the possibility that an occupier might take in a lodger while present in the home; then move on to repeat the exercise in other properties. This could result in a chain of “lodgers” whom the occupier/resident landlord had no intention of treating as lodgers, in any ordinary sense of that word. Rather the exercise would be a “sham” designed to give the occupier/resident landlord the ability to evict the so-called lodger without first having to go to court.

                4.16               The case-law on “sham” transactions should be robust enough to prevent an occupier/resident landlord acting in this way.[9] While some may argue that we should not be proposing a test that might be the subject of sham transactions, we think, nevertheless, there is much to be said in favour of merging the concept of “lodger” with that of the person who occupies premises where there is a landlord who shares accommodation with the lodger.

                4.17               We provisionally propose that there should be a statutory definition of “lodger” for the purposes of the right to take in lodgers.

                4.18               We further provisionally propose that “lodger” should be defined as a person who occupies premises where there is a resident landlord who shares accommodation with the lodger, irrespective of whether the person does so under a tenancy or a licence.

                4.19               We invite views on whether the unprotected status of an occupier as a “lodger” should continue, even where the resident landlord no longer actually shares the accommodation with the lodger but retains the contractual right to do so.

                4.20               As noted above, one feature of the current right is that it is exercisable by the secure tenant without the landlord authority having any say in the choice of lodger. If the right to take in a lodger were to be extended, it should perhaps be asked whether the right should be subject to the landlord’s consent, which, in accordance with our normal principles, could not be unreasonably withheld.

                4.21               The argument in favour of a consent requirement would be that there might be circumstances where the landlord felt that the occupier seeking to take in a lodger would not make a rational or responsible decision, and that therefore the landlord should have an overriding right to decline to consent to the occupier’s choice of lodger, albeit the consent requirement could not be exercised unreasonably.

                4.22               We can see four arguments for not having a consent requirement.

                4.23               First, any decision to take a person into one’s home is not one that would be taken lightly. Therefore the occupier seeking to take in a lodger would have made inquiry as to whether that person would be someone who would live amicably in the home.

                4.24               Secondly, the need to get the landlord’s consent adds an unnecessary degree of bureaucracy to what should be a simple and straightforward process.

                4.25               Thirdly, as the lodger would usually be sharing living accommodation with his or her immediate landlord (the occupier who granted the right to lodge), he or she would fall outside the scope of our scheme.[10] The lodger who shared with the occupier/landlord could easily be removed from the premises, as the lodger’s immediate landlord (the occupier) would be, for these purposes, a resident landlord. The lodger would have no security of tenure and would fall outside the scope of the Protection from Eviction Act 1977.

                4.26               Fourthly, if the lodger caused any trouble which the occupier was unable or unwilling to do anything about, the (head) landlord has substantial powers to take possession proceedings for breach of the occupation agreement, for example on the grounds of nuisance, against the occupier (and thus by extension the lodger). If this resulted in an order for possession being made and executed against the occupier, the possession order would also cover the lodger.

                4.27               We think that, on balance, the arguments against a consent requirement outweigh those in favour.

                4.28               We provisionally propose that the right to take in a lodger should be exercisable without a consent requirement, as at present.

                4.29               We have considered whether or not the right should be extended to type II agreements. Some of the arguments above apply as much to type II agreements as to type I agreements. The lodger could be just as readily removed in a type II agreement, where the type II occupier was sharing accommodation with the lodger. Furthermore, the powers of the head landlord to remove the type II occupier (and with him or her, the lodger) are more extensive.

                4.30               On the other hand, enhancing the personal autonomy of the occupier is a key feature of the type I, intended primarily for use in the social sector. Allowing type I occupiers the freedom to take in lodgers can be seen as part of that. The same is not necessarily true of type II occupiers, particularly in the private sector. It is arguable that, where the relationship between the head landlord and the type II occupier is essentially a commercial transaction, it is reasonable for such a private sector landlord to control the identity of others who may come to occupy their property similarly on a commercial basis.

                4.31               In the context of the potential for anti social behaviour by lodgers, the situation is also different in the private sector (and, thus, in relation to type II agreements). Private landlords letting on type II agreements have adequate powers to evict troublesome occupiers and therefore lodgers. The problem in the private sector is more likely to be the unwillingness of a private landlord to use his or her powers.

                4.32               Without the compulsory term giving the occupier the right to take in a lodger, which we propose in relation to the type I agreement, it would be open to a private landlord to permit the occupier to take a lodger. In the absence of a specific term providing otherwise, the landlord would have a veto – he or she could refuse to allow the occupier to take a lodger on any grounds, which would not be subject to the test of reasonableness.

                4.33               If the occupier was required to ask permission of the landlord, who was able to exercise his or her veto, before taking in a lodger, it is possible that the landlord would be more willing to control potential anti social behaviour. If asked, the landlord may make enquiries about the identity of the proposed lodger and decline permission if he or she had doubts.

                4.34               On the other hand, if consent were not required, once a lodger had been taken in by the occupier, the landlord might have to take possession proceedings against their occupier as being the only effective means to remove the unwelcome lodger. And even if the occupier was willing to terminate the lodger’s agreement at the request of the landlord, making such a request requires a more positive step on the part of the landlord than merely declining consent, a step which a landlord may be reluctant to take.

                4.35               We invite views on whether or not occupiers under a type II agreement should also have the right to take in a lodger.

                4.36               If the answer to the question is yes, we also invite views whether the right should be an absolute one, or one that can only be exercised with the consent of the landlord.

                4.37               Finally we consider whether lodgers should be entitled to have a written agreement (including both those occupying under the right provisionally proposed at para 4.5 above and any other lodgers).

                4.38               It is the essence of a lodging agreement that the arrangement is informal. No doubt it is important for the parties to clarify key issues, such as which rooms may be shared, whether radios and televisions may be played at certain times, when the lodger has access to the kitchen or the bathroom and so on. It is arguable, however, that it would be at odds with the informality of the arrangement to require a written agreement. Further, the bargain between an occupier and a lodger is more likely to be made on a reasonably equal basis than one between a landlord, whether in the private or the social sectors, and a type I or type II occupier. In such circumstances, the sanctions we propose for failure by the landlord to provide the occupier with a written occupation agreement would, arguably, be inappropriate in the context of lodging agreements.[11]

                4.39               On the other hand, it is inevitable that there will be some disputes about whether a person is a sub-occupier or a lodger. These might be easier to resolve if there were a written lodging agreement, though the existence of such would not prevent arguments that an agreement was a sham.[12] It may also be the case that many occupiers and lodgers would prefer to have a simple written agreement available.

                4.40               Our provisional view, however, is that these advantages are not sufficient to justify the imposition of a requirement that the occupier should provide a lodger with a written lodging agreement.

                4.41               We provisionally propose, therefore, that there be no requirement for the provision of a written agreement between a lodger and his or her resident landlord.

                4.42               The lodger does not have a direct contractual relationship with the head landlord, only with the occupier. The occupier is responsible to the head landlord for any behaviour of the lodger which puts the occupier in breach of their agreement with the landlord, just as they are for the behaviour of visitors or other household members. The relevant default terms, such as those on anti-social behaviour and damage to the property, will be drafted so as to make the occupier liable for taking reasonable steps to control lodgers, visitors and other household members, and for putting right any damage they cause.[13] This should protect the head landlord’s interest in being able to exert control over the behaviour of lodgers, even though there is no direct contractual relationship.

                4.43               There is a separate issue of the effect of the lodging agreement on the head landlord where the agreement between the occupier and the head landlord terminates. Lodgers are inherently in a very insecure position, given that they are excluded from our scheme. Under the current law they would all be licensees, so their rights would not be effective against the head landlord on termination of the occupier’s agreement.

                4.44               Our new definition of “lodger” might conceivably include a few people who would be classified under the current law as sub-tenants, rather than licensees, which would mean that the head landlord could be bound to accept them as tenants on termination of the head tenancy.[14]

                4.45               We believe that it would be undesirable to reproduce this result in our new scheme. As the landlord has no control over the introduction of lodgers, so the landlord should not be bound by lodging agreements on termination of their agreement with the occupier.[15] The lodger should be treated like the occupier’s other household members for this purpose, irrespective of whether under current law they would count as a tenant or a licensee.

                4.46               We provisionally propose that, on termination of an agreement covered by our new scheme, the head landlord should not be bound by any lodging agreement entered into by the former occupier, irrespective of whether that lodging agreement amounted to a tenancy or a licence.