Part VII
the effects of the death of an occupier
Introduction
7.1
This part deals with three distinct matters.
(1)
First the impact of the death
of an occupier on the agreement which conferred the right to occupy.
(2)
Secondly, whether a right of
succession – a central feature of the current law – should be retained in the
scheme we propose.
(3)
Thirdly, the effects of
succession on the past and future rights and liabilities under the agreement.
The
effect of the death of the occupier on the agreement
The current law
7.2
The current law draws a distinction between agreements which
create licences and those which create tenancies. Licences do not create any
interest in land, but only rights personal to the licensee. Thus a licence will
normally terminate on the death of the licensee.
7.3
By contrast, under current landlord and tenant law, when a
landlord and tenant enter an agreement to lease land, whether for a fixed-term
or on a periodic basis, they create a property interest in the land. Unless the
lease provides otherwise, the property interest will automatically continue in
being on the death of the tenant, by being passed under a will or on intestacy
to the persons entitled to succeed. Even where there are no heirs, the property
will pass to the Crown as bona vacantia. Thus,
on the death of a tenant, the obligations of the tenancy continue unless the
tenancy is formally brought to an end by the former tenant’s successors (for
example, by notice to quit or surrender) or by the landlord.
7.4
This can be awkward for all concerned. The landlord is unable
to regain possession without terminating the lease, but is not to know whether
the deceased tenant left a will or who may have been named as executors in it.
The estate may eventually find it is liable for ongoing rent for a property
which was not necessarily being used. It is particularly a problem on
intestacy, where the administrators do not take the interest until the grant of
administration by the court. There may therefore be a delay in any action by
the estate. If the landlord wishes to end the tenancy in the meantime, they
will not succeed unless they discover that they are required to serve notice to
quit on the Public Trustee.
Joint tenancies
7.5
Under the present law of landlord and tenant, joint tenancies
attract the principle of the “right of survivorship”. The effect of this is
that the surviving joint tenant, who was already jointly and severally liable
under and entitled to the benefit of the tenancy, simply continues as the sole
tenant. This principle does not apply to licences.
Our approach
7.6
In considering our approach to the reform of this aspect of
the law, we consider first the impact of the death of an occupier on a joint
occupation agreement; then we look at what should happen in relation to a
periodic agreement; finally we consider what should happen in relation to a
fixed-term agreement.
Joint occupation agreements: the principle of survivorship
7.7
In our discussion of joint occupation agreements in Part III
above, we proposed that the principle of joint and several liability should be
the default position in relation to the liability of joint occupiers to their
landlord. The other principal feature of joint tenancy, noted in passing in
Part III, is the principle of survivorship. This provides that, on the death of
one joint tenant, the remaining tenant(s) automatically take over the tenancy.
7.8
We see no reason why this principle of survivorship should not
be adapted to all joint occupation agreements made under our scheme, so that on
the death of a joint occupier, the remaining joint occupier(s) automatically
take over the agreement.
7.9
We provisionally
propose that on the death of a joint occupier, the remaining occupier(s) should
take over the occupation agreement.
7.10
Under the Housing (Scotland) Act 2001, a joint tenant is
regarded as just another qualified person in the list of people with the
statutory right to succeed to the tenancy.
We take the view that a joint occupier is in a different position from any
other potential successor. They were already an occupier under the agreement.
They had taken on joint responsibility under the agreement. The landlord had
agreed to take them on as an occupier.
Joint tenancies are currently commonly used as a way of ensuring that a person
will take over the tenancy on the death of the other tenant. Our
view is that the special position of the joint occupier should be preserved and
kept distinct from the discussion of the right of succession.
7.11
We provisionally
propose that survivorship by joint occupiers should take priority over the
right of succession under other statutory rules. The statutory succession rules
should only take effect on the death of a sole occupier, including the death of
the last of any joint occupiers.
More than one
survivor
7.12
We have considered whether there should be any exceptions to
this principle. For example, if there were a large number of joint occupiers,
there might be the potential for a large number of exercises of the right of
survivorship, which would thereby deny the ability of the landlord to regain
possession of his or her property. Insofar as this might be regarded as a
problem, we think the dangers of this happening could be overstated.
(1)
In the case of a periodic
type II agreement, the landlord would be able to use the notice-only ground for
seeking possession against all the joint occupier.
(2)
In the case of a fixed-term
type II agreement, the point at which the landlord could regain possession
would be postponed until the fixed-term had expired, but that is what the
landlord had agreed to in the first place.
(3)
In the case of a type I
agreement, particularly where the landlord was a social landlord seeking to
meet housing needs, the postponement of the ability of the landlord to regain
possession of a dwelling might reduce its ability to meet those needs. However,
the landlord would only have entered into a joint agreement on the basis that
the principle of survivorship would apply. Thus the argument that the landlord
should bear the consequences of that decision seems strong.
7.13
In addition, we have in CP 162 proposed ways in which the
landlord might seek possession of premises on an “estate management” basis.
Although discretionary, and only granted where the court thought it reasonable,
and on the provision of suitable alternative accommodation, nevertheless ways
would be open to the landlord to regain possession against surviving joint
occupiers, if they no longer had the degree of housing need that would justify
their being allocated a unit of social housing.
7.14
In a case where a joint occupier was brought into the agreement
at a later stage, under the proposals set out in paragraphs 3.29 to 3.58, the
same principles would apply. This might happen, for example, where the survivor
of one joint occupation agreement takes another partner. They might apply to
the landlord to have the new partner joined as a joint occupier. If the
landlord consents to this application, they should live with the consequences
of that decision.
7.15
We provisionally
propose that the principle of survivorship should apply irrespective of the
number of joint occupiers living in the premises at the date of the death of
the occupier.
Termination of the agreement
Periodic agreements
7.16
We suspect that most people would think that, on the death of
the occupier (who was not a joint occupier) under a periodic occupation
agreement, the
legal relationship between the deceased occupier and the landlord would be at
an end. The fact that there are rights of succession to tenancies, which we
discuss below, might well cause people to think that, without them, the death
of the occupier brings the agreement to an end. We think that the law should
broadly reflect this understanding.
7.17
The termination of the agreement would take place
automatically and without the need for a court order. If the property is empty
the landlord would be able to take possession immediately. If there are
non-successors occupying the property they would become trespassers. The
landlord would have the choice either of obtaining an order for possession
against them as such,
while demanding damages for trespass (mesne profits), or of giving some or all
of them a type II periodic agreement while deciding how to proceed.
7.18
We provisionally
propose that there should be a compulsory term in type I and periodic type II
agreements that, if the agreement does not pass to a joint occupier or to
another person under the statutory rules on succession, the agreement should
terminate automatically and without the need for a court order.
7.19
This proposition does, however, raise the question of what
should be the date on which the agreement should cease. A
compulsory term in the agreement covering the principle that the agreement ends
on death could be framed in such a way as to leave the exact timing of the
termination of the agreement to be determined in a related default term.
Thereby, rather than a rigid rule, the parties could substitute their own
agreed provisions on the timing, subject to the test of fairness under the
Unfair Terms in Consumer Contracts Regulations 1999. The default term could
provide that the agreement terminates as from the date of death of the
occupier. But this could be varied by the parties.
7.20
Alternatively the default term could provide that the
agreement terminated at a later date. One possibility would be four weeks after
the date of the death, or after the landlord first becomes aware of the death,
or after the date of the first missed rent payment following the death. The
four week period would reflect the four week period which the occupier is
required to give when giving notice to quit the agreement.
7.21
We are anxious that, in relation to residential occupation
agreements, our new scheme should not reproduce the technical requirements of
the current law, whereby if the landlord does not terminate a tenancy, the
personal representatives or administrators of the deceased’s estate have to
serve formal notice to quit on the landlord to bring the agreement to an end,
even if the landlord is fully aware of the death.
7.22
Equally we can see that in some circumstances, particularly
where rent is paid at long intervals or by housing benefit, the landlord may
not realise the occupier has died for some time if nobody lets them know of the
death. The issue becomes one of who should bear the responsibility for ensuring
landlords are made aware of the death of an occupier: the families of the
deceased occupier, or the landlord themselves.
7.23
Implicit in our consumer approach to residential occupation
agreements is the proposition that the landlord (or their agent) should take
active responsibility for the management of the accommodation. This might lead
to the view that it was up to the landlord or their agent to check that the
occupier is still alive. This is particularly so where the rent ceases to be
paid, as the landlord should be checking why payments are missed.
7.24
On the other hand it could be argued that it is unrealistic to
suggest that landlords keep their occupiers under continuous surveillance, and
that rather it should be the responsibility of the deceased occupier’s family
or other heirs to notify the landlord that a former occupier has died.
7.25
We are inclined to the view that the default term should
provide that termination of the agreement should take place on the date of the
death of the occupier. If there are other people living at the premises who are
not occupiers under the agreement, then the landlord will be entitled to
damages, equivalent to the rent, from them for trespass. The problem of lost
income would only arise where nobody else was left in the premises at the time
of the death.
7.26
If the date of termination is the subject of a default term,
the landlord will be able to vary that term so as to place more responsibility
on the tenant’s family/estate, though this would be subject to the test of
fairness in the Unfair Terms in Consumer Contracts Regulations. This would
allow the landlord to take into account particular reasons why the landlord
might not easily discover that the death has occurred, for example where rent
is only paid at long intervals.
7.27
If the agreement does not terminate immediately on death,
there will be a need for the liabilities and rights that have arisen under the
agreement to pass to the deceased occupier’s estate. We discuss this further at
paragraphs 7.127 to 7.131 below. Here we note that the possible complications
this can cause are another argument in favour of termination of the agreement
immediately on death.
7.28
We provisionally
propose that there should be a default term which specifies the moment, after
death of the occupier, at which the agreement terminates.
7.29
We invite views as to
whether that default term should provide that the agreement terminates
immediately on death, or at the point at which the landlord does or should
reasonably have become aware of the death.
7.30
We invite views as to
whether such provisions would cause problems where housing benefit is paid
direct to the landlord, and whether any such problems should be dealt with by
changes to the housing benefit system rather than to the law on relations
between landlords and occupiers.
Fixed-term agreements
7.31
While the above principles may suit periodic agreements, we
are concerned that they may be inappropriate for fixed term agreements. We have
been anxious to promote the idea that in relation to the type II agreement,
landlords could provide more than the bare minimum of rights to the occupier by
the use of fixed-terms. Although, in practice it is likely that these
agreements will, in the main, be relatively short-term, our scheme does admit
the possibility of agreements for a fixed-term of up to 21 years being possible.
7.32
In many cases of short fixed terms at full rent, the provision
for automatic termination on death may be appropriate, and a default version of
the compulsory term in other agreements would be useful as the starting point.
7.33
Automatic termination on death is likely to be particularly
inappropriate where a large premium has been paid for a relatively long fixed
term, and the agreement allows the occupier to transfer it to new occupiers, so
that the agreement is a saleable asset more like a long residential lease. In
these cases, we think that landlords and occupiers should be able to agree that
the agreement should be capable of being passed on to their heirs.
7.34
Under the present law this would be achieved under general
succession law either by being passed on by will as part of the deceased
occupier’s estate or failing that through operation of the intestacy rules. It
should be noted that the intestacy rules only operate in favour of those who
can trace a relationship to the deceased by marriage, blood or adoption; they
are drawn considerably more narrowly than those who are entitled to exercise
the statutory right of succession.
7.35
The statutory rules on succession, discussed below, while
creating an entitlement for those within the rules, are also a limitation on
the freedom of the occupier to pass on their statutorily protected interest to
whomsoever they choose. The succession rules are justified because the occupier
is seeking to let others take advantage of a statutory status which gives
protection against the landlord. In the context of fixed term agreements,
however, an occupier might well wish to pass the residue of their fixed term on
to someone who did not fall within the scope of the statutory succession
scheme.
7.36
We are of the view that, while the statutory succession rules
should be applicable to fixed term agreements, it should be possible for the
occupier and the landlord to agree that the occupier should have the freedom to
pass the remainder of the term on to anyone of their choice on death. Thus we
do not see why the occupier’s will should not be allowed to override the
statutory succession rules.
If the occupier dies having made no will, the rights would pass to a statutory
successor.
7.37
An alternative but less flexible rule would be that the landlord
and occupier should be able to provide that the agreement passes under the will
or intestacy only if there are no statutory successors.
7.38
In such cases we believe it is reasonable to expect the
occupiers and landlords to obtain appropriate professional advice, so that they
are clear as to what they are agreeing about the priority between the will and
the statutory succession rules.
7.39
We provisionally
propose that fixed term type II agreements should contain a default term
providing that the agreement terminates on the death of the occupier. The
statute should provide that the parties can exclude the statutory rules on
succession, but only where they have replaced this default term with a term
allowing for the remaining period of the agreement to pass to another under the
occupier’s will.
Fixed term licences
7.40
While these principles can clearly apply to fixed term
occupation agreements that can properly be classified as tenancies, there is
the possibility, albeit one which we think is largely theoretical, of creating
a substantial fixed-term licence. This raises the question whether such
fixed-term licences could be passed on by will or on intestacy. On normal
principles of land law, this would not be possible as licences are not property
interests capable of being so transmitted. On that basis, only the statutory
rights of succession, set out below, could apply to fixed-term licences.
7.41
We provisionally
propose that fixed term occupation agreements that are licences not tenancies
should only be capable of being transferred, on the death of the occupier,
under the statutory right of succession.
A
statutory right of succession
7.42
Most people invest a great deal of their personal life
histories in their homes, particularly where they have lived in one place for a
long time. The home is not just a place where one exists; it is the centre of a
life. It is where families are raised, and from where social circles are
developed. The home is, for many people, the core of their existence. Policy
makers and legislators have sought to reflect this social reality by building a
“right of succession” into the schemes of statutory protection for tenants.
7.43
In developing our proposals for reform we have asked ourselves
whether a right of succession should be retained. We have concluded that
because a right of succession has been part of the law regulating the rented
sector for such a long time, it should be retained in the scheme. This would be
achieved by a statutory provision which – as under the present law – prescribes
the situations in which a right to succeed to a residential occupation
agreement would exist.
7.44
As will be seen, the present law is framed in the context of
each of the groups of tenancies to which existing protective legislation
applies. In the case of secure tenancies and Scottish secure tenancies these
rules apply to licences as well. It is a key feature of our proposals that they
should apply to all agreements granting the right to occupy. We do not think
that the lease-licence distinction needs to be introduced in the context of the
right to succeed. To do this would be to introduce just the kind of complexity
we are seeking to avoid.
7.45
We provisionally
propose that a statutory right of succession should be part of the proposed new
scheme for the regulation of all the occupation agreements falling within the
scope of our proposed scheme.
7.46
We have discussed above
our proposals in relation to fixed-term agreements, which we have proposed
should be capable of being left by will. We have also considered the
application of the principle of survivorship.
Save for these two cases, and in the light of our discussion about the impact
of the death of the occupier on the agreement, we have come to the view that
the only means for transferring rights under an occupation agreement on the
death of the occupier should be through the right of succession.
7.47
We further
provisionally propose that, save for special arrangements made in relation to
fixed-term agreements, and cases where the principle of survivorship applies,
the only means whereby the benefit of an occupation agreement can be passed on
following the death of the occupier should be though the right of succession.
The present position
7.48
The current law on the right to succeed is analysed in detail
in the Appendix to this Paper. It will be clear from this analysis that, while
the principle of the right to succeed is well established, the way in which it
operates in different contexts varies widely. In our view this is another area
of the law which would benefit from substantial simplification.
7.49
At the heart of the various statutory regimes governing
succession is the concept of the qualifying successor (in Scotland, the
qualifying person). But all four Acts provide very different ways to achieve
their objective:
(1)
there can be two successions
under Rent Act 1977, and the Scottish Act, but only one under Housing Act 1985
and Housing Act 1988;
(2)
non-spouse members of the
tenant’s family can succeed under Rent Act 1977, Housing Act 1985 and the
Scottish Act, but not under Housing Act 1988;
(3)
the phrase “member of the
tenant’s family” is defined by reference to a list in Housing Act 1985, but
left to the courts under Rent Act 1977 and the Scottish Act;
(4)
the courts have held that
same sex partners can succeed as a member of the family under Rent Act 1977 and
the statute includes them in the Scottish Act, but they are excluded under the
Housing Act 1985 and the Housing Act 1988;
(5)
under the Rent Act 1977
members of the tenant’s family qualify to succeed if they have resided with the
tenant for a period of two years. Under Housing Act 1985 the qualifying period
is one year;
(6)
there are different means of
resolving differences where there is more than one qualifying successor, and
they cannot agree amongst themselves who should succeed; and
(7)
there are different rules in
each Act on when a transfer counts as a use of succession rights.
Our provisional proposals
7.50
Our proposals are based on an amalgam of the present rules.
The key issues are as follows.
(1)
Who should have the right to
succeed?
(2)
How many successions should
be permitted?
(3)
What counts as a use of
succession rights?
(4)
When can the status of
successor be lost?
(5)
To what should successors
succeed?
(6)
Should there be separate
treatment for fixed-term tenancies?
(7)
Should joint succession be
possible?
(8)
How should disagreements
about who should succeed be resolved?
7.51
In thinking about how to answer these questions, we
acknowledge that the right to succeed highlights a significant tension
underlying the law relating to renting homes. Those who can afford to buy a
property interest in their home – whether freehold or leasehold – have
something of considerable value that they can leave to their heirs and
successors. Indeed, many tenants have been given the opportunity to acquire
just such an interest, either through the right to buy, (local authority
tenants) or the right to acquire, (housing association tenants) or by
exercising the right of first refusal (Rent Act protected tenants).
7.52
If, however, the right to succeed to rights to occupy were to
be extended indefinitely, this would change the fundamental nature of the
rental market, in ways which would arguably have a harmful effect on the
operation of the rental housing market. It may be important for this sector of
the housing market that landlords are able to regain possession of their
dwellings from time to time. In the particular case of social landlords, too
extensive rights to succeed might limit their ability to provide accommodation
to those most in housing need.
7.53
While the present legal position is undoubtedly confusing and
complex, it does attempt to achieve a balance between allowing individuals to
retain a sense of security that comes from the right to occupy their homes and
allowing landlords flexibility to use their housing stock as efficiently as
possible. We conclude that any proposals we make should reflect this
compromise.
7.54
With these observations in mind we turn to our proposals for
answering the questions set out above.
Who should have the right to succeed?
7.55
Under the present law, all existing regimes extend the right
to succeed to the surviving spouse (including for these purposes cohabitants,
and in Scotland same-sex couples) who was living in the premises as his or her
only or principal home at the time of death. Most of the existing schemes
extend the right to other members of the family, though this is defined in
different ways. The Scottish Act extends the right to carers.
Spouses
7.56
In view both of the existing state of the law, and the social
reality which underlies the law, we think that a spouse must have the right to
succeed. We think that this should embrace those who live together as husband
and wife.
7.57
In the light of the decision of the House of Lords in Fitzpatrick v Sterling Housing Association
Ltd and the terms of the Scottish Act, we
think the principle should also extend to same-sex couples who co-habit.
7.58
Further, we think that the same principles should apply to
couples in which one or both partners has undergone gender re-assignment.
7.59
We provisionally
propose that a surviving spouse should have the right to succeed. “Spouse”
should be defined to include the survivor of couples who have lived together as
husband and wife, or of same sex couples who have co-habited. We provisionally
propose that these principles should apply whether or not either partner has
undergone gender re-assignment. Any spouse should have been living in the
premises as his or her only or principal home at the time of the death.
Members of the family
7.60
There is a sharp distinction in the ways in which potential
entitlements by members of the family are defined. The most detailed is the
list approach adopted in the Housing (Scotland) Act 2001. The most open-ended
is that contained in the Rent Act 1977.
7.61
In view of our intention that the rights and obligations of
occupiers should be capable of being set out in the occupation agreement, we
are attracted by the approach adopted in the Housing (Scotland) Act 2001. The
details of the list might need amendment to suit the situation in England and
Wales.
7.62
We further
provisionally propose that a list of those potentially entitled to succeed
should be set out in the legislation, which would then be capable of being set
out in the agreement.
7.63
We invite views on the
categories that should be included in the list.
A period of residence?
7.64
All the Acts have some
residence qualification. The person with the right to succeed must, at the very
least, be occupying the premises at the time of the death as his or her only or
principal residence; in some cases there must be occupation12 months prior to
the death; in others 24 months.
7.65
We provisionally
propose that a member of the family who wishes to exercise a right to succeed
should have resided in the premises as his or her only or principal home before
the occupier died.
7.66
We invite views on what the period of occupation should be.
Carers
7.67
Only the Scottish Act makes specific provision for carers to
be considered as a category of qualifying person (successor). The reason for
this development is that there will be cases where a carer has lived with the
occupier so long they have effectively become a member of the family. While
such a provision is not currently part of the law in England and Wales, it may
be an issue on which consultees have views.
7.68
We invite views on the
question whether the right to succeed should be specifically extended to
carers, on a basis similar to that set out in the Housing (Scotland) Act 2001.
Rent Act tenants
7.69
In order for existing tenancies to be mapped onto our proposed
new scheme, as we have proposed in CP 162, it will be essential that the
existing rights of Rent Act protected tenants are preserved.
7.70
We provisionally
propose that the rights of succession currently available to Rent Act protected
tenants are preserved for that group.
How many successions should be permitted?
7.71
As we have already seen, Rent Act tenants and Scottish secure
tenants have two rights of succession; secure tenants and assured tenants have
one. We have just proposed that the position of Rent Act tenants must be
protected; we have already set out our proposals relating to the rights of
joint occupiers to succeed by operation of the principle of survivorship.
7.72
Leaving those two cases on one side, there remains a stark
contrast between the approach in the Housing Acts 1985 and 1988 – both of which
provide for a single right to succeed – and the Scottish Act which provides for
two.
7.73
It could be argued that the law in Scotland should not be of
direct concern to the Law Commission reviewing the law of England and Wales.
But we think it unrealistic to ignore such recent developments in Scotland.
Consultees will inevitably draw them to our attention, if we do not take them
into account.
7.74
Having considered the matter carefully, and bearing in mind
the need to achieve the balanced approach suggested above, we have concluded that
it may be most sensible to adopt an alternative approach on this matter. In
some cases there would be two rights of succession, in others only one.
Two rights of succession – spouses
7.75
Spouses will not, of course, need to use any statutory right
of succession, if they are a joint occupier under the occupation agreement.
They will then succeed automatically by operation of the principle of
survivorship.
7.76
Where spouses are not joint occupiers, we still think that the
position of spouses
is of sufficient importance to justify their having an automatic right of
succession. In many cases, on the death of the second spouse, the agreement
will come to an end in any event. However we consider that other members of the
family should also have at least one opportunity to succeed to the right to
occupy, even if a spouse had already succeeded.
7.77
Members of the family would include not only members of the
family of the original deceased occupier, but also members of the family of the
deceased spouse. Where a surviving (successor) spouse had him or herself
acquired a new spouse, the new spouse should be regarded as a member of the
family and therefore also entitled to succeed. However, following the second
succession, there would be no further right of succession irrespective of
whether the second successor was a new spouse or another member of the family.
7.78
We provisionally
propose that a surviving spouse should have the automatic right to succeed to a
deceased occupier who was not him or herself a successor.
7.79
We further provisionally
propose that, after succession by a spouse, there should be a further right to
succeed by another member of the family of either the original deceased
occupier or the successor occupier. The spouse of the successor occupier would
be included in this category.
Single
right to succession
7.80
In other cases, where there is no surviving spouse, there
should only be a single right of succession available to a qualifying member of
the family of the deceased or such others (for instance, carers) as may be
prescribed.
7.81
Where a non-successor occupier dies without a spouse, we
provisionally propose that there should be a single right to succeed by a
qualifying other member of the family of the deceased occupier.
What counts as a use of succession rights?
7.82
If there are to be limits on the number of successions then
there must be rules to determine whether the succession rights have been used
up. The current Acts all regard operation of the principle of survivorship and
succession under the statutory scheme as counting as using up a right of
succession.
7.83
The implication of our proposals on the application of the
principle of survivorship is that acquiring the right to occupy through the
operation of survivorship should not
count as a use of the statutory right of succession.
Similarly, where a fixed-term agreement was passed by will, this too would not count as the use of a statutory
right of succession.
7.84
We think it would be simpler if only successions arising from
the statutory rules counted as the use of the statutory right of succession.
However, we also wish to ensure that the landlord who wanted to grant more
generous contractual succession rights could do so without accidentally
triggering fresh statutory rights.
7.85
We provisionally
propose that where a person succeeds to an occupation agreement through the
operation of the principle of survivorship, this should not count as the use of
the statutory right of succession.
7.86
We similarly propose
that where a person succeeds by will or on intestacy to a fixed-term occupation
agreement, this should not count as the use of the statutory right of
succession.
7.87
We further propose that
the exercise of any analogous contractual rights of succession should be
regarded as the use of the statutory right of succession.
When can the status of successor be lost?
7.88
Once a person has succeeded, the next question is whether this
status can be lost, so that the whole chain of succession starts again.
7.89
Our view is that once a person became an occupier by
succession, that status lasts so long as the person continued to occupy the
same premises, whether from the same or a different landlord. The same would
apply if the occupier moved to new premises as the result of exercising the
right of mutual exchange.
7.90
If the agreement with the new occupier was terminated either
by the landlord obtaining an order for possession which is executed, or by the
occupier terminating the agreement, and subsequently that person enters a
wholly new occupation agreement, either with the same or a different landlord,
they should no longer be regarded as a successor, but as an occupier from whom
a right to succeed can be acquired.
7.91
If, on the death of a successor, there is no further right of
succession, but the landlord inadvertently grants an occupation agreement to a
new occupier on the mistaken view that that person was entitled as a successor,
this mistake should not invalidate the agreement. It should be regarded as a
new agreement, and the occupier should not be treated as a successor.
7.92
If there was any evidence that such an arrangement had been
entered into as the result of fraud or misrepresentation by the new occupier,
the landlord would be able to seek possession against the new occupier on the
basis of that fraud or misrepresentation.
(This would only be necessary where the new occupier had been granted a type I
agreement or a fixed term type II agreement.)
7.93
We provisionally
propose that, so long as the successor remains in the same premises under the
same or a different landlord, or acquires an occupation agreement by exercise
of the right of mutual exchange, that person should retain the status of
successor.
7.94
We further
provisionally propose that if that occupation agreement were terminated, and a
wholly new agreement relating to different premises was made, whether by the
same or a different landlord, the occupier should enter this agreement not as a
successor.
7.95
We propose that where a
landlord grants an agreement to another under the mistaken belief that the
occupier was entitled to succeed, this should not invalidate the agreement, but
rather the agreement should be deemed to be fully valid.
7.96
Where there is evidence
that the occupier had sought to mislead the landlord as to his or her status as
successor, this should be the basis for possession proceedings in the normal
way.
To what should successors succeed?
7.97
We think that the general principle should be that a successor
should succeed to the agreement held by the deceased occupier.
7.98
The terms and conditions of the agreement should be the same
as those of the original agreement. Variations may of course be made at the
time of the succession, or at any other time, if they are agreed between the
parties or are permitted by a term in the agreement. In any event the agreement
will need to be varied to take account of the identity of the new occupier.
7.99
We provisionally
propose that a person who succeeds under the statutory right of succession
should succeed to the same agreement. (The only exception would be that a
non-spouse successor of a former Rent Act tenant would not succeed to the right
to a fair rent.) Save as to the identity of the occupier, the terms of the
agreement will not change unless a variation is agreed or permitted by the
agreement.
7.100
It will be necessary to make clear that any rent arrears of
the deceased occupier are not passed onto the successor (though they may be
recovered from the estate of the deceased). Further, the existence of any such
arrears would not represent a breach of the terms of the occupation agreement
by the successor. Thus possession proceedings for rent arrears which were the
sole responsibility of the deceased occupier could not be instituted against a
successor to the rights to occupy.
Should there be separate treatment of fixed-term
agreements?
7.101
We have already proposed above that fixed-term agreements
should be treated separately.
Should joint succession be possible?
7.102
Currently the rules on succession provide that only one person
can succeed to a secure, introductory, protected or assured tenancy. In
some cases the occupiers and the landlord would all prefer the tenancy to pass
to two or more potential successors jointly, but they have to go through the
procedure of choosing one person to succeed who then has to surrender so that
there can be a regrant to the joint tenants. Allowing joint succession to
occupation agreements would allow more sensible decisions to be made more
easily. This would also be consistent with our approach to adding joint
occupiers to the occupation agreement.
We see the force of these arguments.
7.103
We provisionally
propose that it should be possible for joint occupiers who have the right to
succeed, to have the rights of occupation under the agreement transferred to
them jointly.
7.104
Where this happened, both joint occupiers would be regarded as
occupiers by succession. Where one died, the remaining occupier would be
entitled to remain by operation of the principle of survivorship. On the death
of the second joint occupier, there would only be a further right of succession
if the second joint occupier was a spouse of the first joint occupier, and
there was a member of the family who was entitled to succeed under the rules
proposed above.
How should disagreements about who should succeed
be resolved?
7.105
In any case where more than one person might be entitled to
succeed, and where those potentially entitled cannot resolve the matter between
themselves, the current law offers differing solutions. The Rent Act provides
the issue should go to the county court. The Housing Act 1985 and the Housing
(Scotland) Act 2001 provides for the matter to be resolved by the landlord.
7.106
In most situations we do not think that having to resort to
the court would be proportionate to the matter to be resolved. Rather we think
that it is more sensible for the landlord to resolve the matter as it will be
the landlord who will have the greatest interest in the identity of his or her
occupiers.
7.107
We provisionally
propose that where there was more than one potential successor, they should
seek to resolve any dispute between themselves. However, where there has been a
failure to resolve the matter, it should be resolved by the landlord.
7.108
However it has been suggested to us that there may be
circumstances where access to a court might be required.
7.109
We invite views as to
whether there are special cases where the matter should be resolved by a court.
An alternative approach?
7.110
As we acknowledged at the start of this section of the Paper,
our proposals are based on the current approach. They thus provide an absolute
right of succession, but one which is strictly limited in its application, both
in terms of the number of successions and the class of people entitled to
succeed. We did consider more radical approaches in an attempt to simplify the
law still further. The essence of these was to relax the limits on numbers of
successions and/or the class of potential successors, but then to compensate
for that with a more restricted right to succession. There are a number of ways
in which such a system might work. As an illustration, it would be possible to
consider an approach with the following elements:
(1)
There would be no statutory
right to succeed attaching to any particular class of person.
(2)
Instead, the succession
system would automatically apply to any person who happened to be living in the
premises at the time of the occupiers death.
(3)
There would be no limit to
the number of potential successions, thus avoiding all questions as to whether
a succession right had been used up.
(4)
The landlord would be required to take on as occupiers under
the agreement any person who fell within the definition of “spouse”.
(5)
In any other case, the
landlord would be entitled to take proceedings for possession against any other
person where this could be justified on the grounds of good estate management.
For example, the social landlord could seek possession against the millionaire
son of the deceased, on the ground that he was not in the degree of housing
need that would justify his retention of the home. Possession would only be
granted where the court thought this was reasonable.
7.111
While attracted by aspects of this sort of approach, we
provisionally reject it. Although attractive in its simplicity, it is open to
objections. We recognise that the value attached by occupiers to the right of
succession is associated with its absolute nature. If succession was merely a
presumption which could be defeated by a social landlord’s allocation
priorities, much of its value to occupiers would be lost. Further, it relies on
landlords having a widely drawn right to obtain possession on “estate management”
grounds. In CP 162, we left this question open, and have yet to come to
concluded view on the matter.
Finally, the use of an “estate management” ground for possession against a
non-spouse occupier could itself generate considerable argument.
7.112
We nevertheless
invite views on whether an alternative approach based on a more limited right
of succession, but one which was not limited in the number of successions,
and/or was open to a wider group of potential successors, is to be preferred.
Effects of succession
on past and future rights and liabilities under the agreement
7.113
Where an occupation agreement passes to a new occupier the
landlord should be under the same duties relating to the provision of revised
versions of the written agreement as they would be where a transfer was made
while the occupier is alive.
7.114
The only question will be what the starting date should be
from which the landlord’s duty arises, and in relation to which sanctions may
be imposed. The issues are similar to those raised in considering the point at
which agreements should terminate after the death of an occupier. In
this case it seems right that the duty should only start from the point at
which the landlord is satisfied, or should reasonably be satisfied, that the
succession has taken place.
7.115
We provisionally
propose that, where the agreement does not terminate following the death of the
occupier, the landlord should be required to serve an amended copy of the
agreement on the new occupier. The same rent and criminal penalties and time
limits for non-compliance should apply as do on the creation of a new
agreement. The time limit for this should run from the date on which the
landlord is satisfied, or should reasonably be satisfied, that the former
occupier has died and a successor has been entitled to take over the agreement
without the agreement terminating.
7.116
Where the parties have chosen to allow a fixed term agreement
to be passed by will or intestacy, the law relevant to wills and intestacy will
govern past and future rights and liabilities under the agreement. We do not
consider those rules further here, as they are of long standing and are outside
the scope of housing law.
7.117
In all other cases the agreement will pass to survivors in a
joint agreement, or statutory successors in a sole agreement, or will terminate
on (or shortly after) the death of the occupier.
7.118
In these cases the occupier’s estate will have no ongoing
liabilities or rights in respect of anything that happens after the occupier
dies, or the agreement terminates without being passed on.
7.119
This leaves the question of what should happen to any
liabilities and rights in respect of events happening before the occupier dies,
or the agreement terminates.
The commonest examples would be if the occupier was in rent arrears at the time
of their death, or if the occupier had suffered disrepair for which they could
claim compensation from the landlord. We outline below how the liabilities and
rights would fall between the deceased occupier’s estate and any new occupiers
under the agreement.
Survivorship in joint agreements
7.120
In relation to survivors under a joint occupation agreement,
the principles of joint and several liability and survivorship can answer the
question. Thus, where one joint occupier dies, the remaining occupier or
occupiers continue as before. They had joint and several liability with the
deceased while he or she was alive. They will therefore continue to be liable
for any arrears or other liabilities accrued by the occupier while alive.
7.121
The deceased occupier’s estate will also be liable jointly to
the landlord. The estate can also make, or be subject to, claims for
contributions in relation to the survivors, on the normal principles for those
sharing joint and several liability. The estate will continue to be entitled to
the benefit of the agreement in relation to the time before the death, and so
could for instance sue for compensation for disrepair suffered by the deceased
(but would not be able to obtain an order for repairs to be done after death).
Statutory succession
7.122
In cases where there is a statutory succession, the
effect of the succession should be equivalent to that of a transfer by a person
who is still alive, as discussed in paragraphs 6.62 to 6.102 above. The
difference is that the estate of the deceased takes the place of the former
occupier.
7.123
Under the current law, tenants who succeed to a tenancy are
often unsure whether that means they also inherit the former tenant’s arrears.
Under our scheme we wish it to be clear that the statutory successor does not
inherit the arrears as such. They therefore cannot be evicted for the
deceased’s arrears. There is no requirement for consent to a succession, so
there is no opportunity, as there may be in a transfer, for the landlord to
require a fresh term in the agreement obliging the new occupier to pay the old
occupier’s arrears.
7.124
In many cases the statutory successor will also be the sole
beneficiary under the deceased’s will or intestacy, and sometimes will also be
the personal representative too. If so, then the estate will, as usual, be
liable to pay off the arrears, and this may be before paying out to the
successor as beneficiary. However, if there are not adequate funds in the
estate to pay the arrears, then the case will fall to be dealt with under the
general law on insolvent estates. The beneficiary cannot be saddled with a net
liability as such.
7.125
The successor will not however owe the arrears to the landlord
in their capacity as successor.
7.126
We provisionally
propose that, in cases of succession under our scheme, the deceased occupier’s
estate should retain all the deceased occupier’s rights and liabilities
relating to the period before the succession, and the statutory successor, as
such, should neither benefit from nor be burdened by them. The statutory
successor, and not the estate, should take all the rights and liabilities under
the agreement in relation to the period after the succession.
Termination of the agreement on death
7.127
Where the agreement terminates on death the effect would be
similar to any other termination, but again the estate will take the place of
the former occupier. If there were legal obligations that the deceased occupier
had not met prior to the death, these obligations should pass to the occupier’s
estate. For example, if the occupier had failed to pay the rent for any period
prior to the death, such rent should be paid. If the occupier had done damage
to the premises in contravention of the occupation agreement, compensation for
these actions should be rendered. But there should be no continuation of those
obligations in relation to periods after the occupier’s death.
7.128
Similarly, the occupier’s estate should have the benefit of
any claim arising against the landlord for breach of the landlord’s obligations
during the period of the occupier’s occupation. Thus, for example, damages for
breach of repairing obligations could be paid to the estate. Any refund of rent
paid in advance would also be made to the estate. But the estate should not
continue to have any rights in respect of the agreement in relation to periods
after the occupier’s death.
7.129
This position will apply if the agreement terminates
immediately on death. However, we asked above at paragraph 7.29 whether
consultees believe the termination should be delayed to some later point, to
give the landlord an opportunity of finding out about the death. In that case
the estate would have to take on any additional rights and liabilities that
might arise under the agreement from the time of the death until the agreement
terminated.
7.130
In either event, there will come a point at which the
agreement will automatically terminate. This will achieve the result which we
suggested above, at paragraph 7.29, that there should be termination in such
circumstances, without the need for personal representatives to serve an
occupier’s notice or for landlords to serve notice on the Public Trustee.
7.131
We provisionally
propose that on the date of the death of the occupier, or the date on which the
agreement is terminated, if later, the rights and liabilities of the deceased
occupier for events occurring before that date should be taken over by the
deceased’s estate. The estate should not be liable for any rights and
liabilities arising after that date.
