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Cite as: [2003] EWLC 284(9)
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PART IX
TERMINATION OF AGREEMENTS AND PROCEEDINGS FOR POSSESSION
9.1 In this part, we discuss first our recommendations in relation to the termination of occupation agreements by landlords and requirements relating to taking proceedings for orders for possession. At the end of the Part, we consider termination by occupiers.Introduction
9.2 Termination of occupation agreements by landlords is an issue which has become increasingly regulated by statute over the years. While we wish to retain the basic substance of the existing rules, we need to adapt them to the consumer approach we have adopted in this project.
9.3 In particular, because we want the occupation agreement to be the place where a clear statement of the rights and obligations of both landlords and occupiers is set out, we wish to see the grounds for possession set out in the agreement itself. This will replace the present situation where the grounds for possession are prescribed in detail in statutory provisions, which operate outside the agreement. We wish the circumstances in which and the processes by which the agreement may lawfully be brought to an end to be apparent on the face of the written agreement.[1] To achieve this we recommend that statute should provide a framework for the compulsory-minimum and default terms which will be set out in the agreement.
9.4 We will need to preserve in statute the court's powers over the termination of agreements by the landlord. It would be inappropriate to seek to give the court jurisdiction through the contract itself.
9.5 In this section, we discuss:Termination by landlords
(1) due process;
(2) the grounds for possession;
(3) notice requirements; and
(4) abandonment.
9.6 Where a landlord is seeking possession from an occupier at the end of an agreement, and the occupier refuses to leave the premises voluntarily, it has long been accepted that the landlord should go through "due process" to regain possession. This comprises two elements:Due process
(1) the need for notice; and
9.7 Such processes conform to the requirements of Article 6(1) of the European Convention on Human Rights. They also ensure that the relevant substantive rights within the European Convention are met. In particular, the measures provide protection for Article 8 rights (the right to respect for a home), and Article 1 of the First Protocol (the general principle of peaceful enjoyment of property). Our recommendations are framed to ensure that the principle of due process remains a key feature of the scheme we are proposing.(2) the need for a court order.
9.8 This does not mean that the detail of the existing law should not be changed. For example, we recommend changes to the existing rules relating to notices, in order to make them more coherent and efficient.
9.9 Even before a landlord can get to court to seek an order for possession, it has become an almost universal requirement that he or she must start the process by issuing a notice to the tenant warning the tenant of his intention of going to court.[2] These have largely replaced the common law rules relating to the need for a notice to quit to determine a periodic tenancy.Notice of intention to take proceedings
9.10 For agreements currently falling outside the principal classes of protection, the requirement for a notice to quit followed by a court order is set out in the Protection from Eviction Act 1977.
9.11 In addition, the new Civil Procedure Rules place great emphasis on the need for parties to litigation to give the other side notice of their intention to bring proceedings. This is part of the policy of the CPR that, wherever possible, proceedings should be settled without the need for a hearing at court.
9.12 Accordingly, we recommend that the notice requirement be retained. We make detailed recommendations about the time periods relating to these notices, designed to make the rules more straightforward.[3]
9.13 We also want to strengthen the principle of "use it or lose it". If proceedings are not in fact taken within a prescribed time after the notice period has expired, the validity of the notice will cease, and a new notice of intention to take proceedings will have to be issued before court proceedings can be started.Use it or lose it
9.14 It has long been a key feature of housing law in England and Wales that a landlord should not be able lawfully to regain possession of property let for residential purposes without first obtaining an order from the court. We recommend that this principle be retained in our new scheme.Court order
9.15 In line with our objective of ensuring that the occupation agreement sets out, as fully as possible, a statement of the parties' rights and obligations, we recommend that the grounds on which a landlord may seek possession should be set out there.Grounds for possession
9.16 We recommend that all occupation agreements should contain, as compulsory-minimum terms, the grounds on which possession proceedings may be brought. Being compulsory-minimum terms, the landlord and occupier may agree to alter the grounds, but any variation will only be in favour of the occupier (for instance a variation to provide that a particular ground would not be used). If so varied, the landlord will not be prevented from agreeing a further variation, so long as the position of the occupier does not fall below the statutorily prescribed compulsory-minimum level.
9.17 As with the present law, there will be two categories of grounds:
(1) discretionary, where possession may be ordered only if a judge thinks that making the possession order is reasonable; and
(2) mandatory, where possession must be ordered once the relevant ground for possession has been proved.
Availability of the grounds
9.18 Central to the scheme we propose is that, in relation to type I agreements, only the discretionary grounds for possession will be available. As noted above,[4] this proposed change will affect registered social landlords who, under the present law, do have a number of mandatory grounds for possession available to them.Type I agreements
9.19 Although some registered social landlords in their consultation responses argued strongly against this proposed change, others saw the logic in what we were proposing, and accepted that without this change, it would be impossible to create a single agreement type that would apply to all occupiers from social landlords.
9.20 We also heard numerous complaints that, when exercising their discretion, judges are too inconsistent in their decisions. We seek to address this issue in our recommendations on structured discretion.[5]
9.21 We accept that there will be some cases where use of an agreement broadly in line with a type I agreement would be appropriate, but where there would still be compelling reasons for including a mandatory basis for seeking possession. We think this may apply where a private landlord created an assured tenancy under the Housing Act 1988, or where a tenancy has been created by a fully mutual housing co-operative. In these situations, the flexibility of our proposed scheme means that, instead of transforming such agreements into type I agreements, they can be converted into type II agreements, on condition that they are "written up". This will mean that any such agreement will contain all of the relevant terms of a type I agreement, but additionally contains the required term providing a mandatory ground for seeking possession, for example, relating to rent arrears.
9.22 The mandatory grounds will be available for type II agreements.Type II agreements
9.23 The discretionary grounds will also be available, though we anticipate that in many cases they will not be required. They will be of particular value in relation to fixed-term type II agreements.
9.24 The present law sets out the grounds for possession in very great detail. Each of the principal Housing Acts has its own set of grounds, all of which differ from each other. In accordance with our objective of simplification, we recommend a major rationalisation of the grounds for possession.Definition of the grounds
9.25 We recommend that the discretionary grounds on which a possession order may be sought should fall into two broad classes:Discretionary grounds
(1) a general ground, for breach of any of the terms or conditions of the agreement; and
(2) circumstances which we have labelled "estate management grounds" where, in addition to establishing that it is reasonable for a court to make the order, the landlord has to show other suitable accommodation will be available to the occupier.
9.26 We recommend that the agreement contain a compulsory-minimum term providing that a landlord may take proceedings for possession for breach of any of the terms in the agreement by the occupier.[6] It will not be necessary for the occupier still to be in breach at the time of taking proceedings. Thus, for example, a person who persistently pays the rent late will be as much at risk as the person who has not paid at all.Breach of the agreement
9.27 We intend that this term should replace all the current statutory grounds for possession which are based on fault by the tenant, such as where the tenant has damaged the house or furniture or not paid rent. Even where a landlord has forgotten to include a term prohibiting a particular type of activity,[7] the default terms, prescribed in secondary legislation, will reproduce the effect of the existing grounds.
9.28 In relation to overcrowding, ground 9 of Schedule 2 to the Housing Act 1985 currently requires suitable alternative accommodation to be provided in all cases where the occupier is found to be in breach of the statutory rules on overcrowding. This might suggest this should become part of the "estate management" basis for seeking possession, set out below. In our view, however, it appears more appropriate also to treat overcrowding as a matter for a default term. The landlord will have the possibility of seeking repossession for breach of the term.Overcrowding
9.29 We have considered whether our approach might lead landlords to invent unreasonable grounds for possession by writing additional terms into agreements. We do not think this likely. Landlords already have the general ground for possession based on breach of the tenancy agreement.[8] The landlord who seeks to add a term enabling him to evict for, for instance, moving a piece of furniture to the other side of the room from where it was placed by the landlord,[9] will find that such a term must pass the fairness and transparency tests of the UTCCR. Even if it passed them, the court must still think it reasonable to order eviction.Unreasonable grounds
9.30 Both the Rent Act 1977 and the Housing Act 1988 provide that a landlord may seek possession on the basis that they provide the current tenant with "suitable alternative accommodation". By contrast, the Housing Act 1985 prescribes a set of particular circumstances in which a landlord may seek possession, for example where a house adapted for use by a disabled person is no longer occupied by a person with a disability. Again, before this ground can be used, the landlord must ensure that suitable alternative accommodation is provided. In both sets of circumstances, the court must decide that it is reasonable to make an order for possession. The objective of both approaches is to give the landlord some flexibility in the use of their estate, while preventing the tenant from being arbitrarily up-rooted from their home.Estate management grounds
9.31 We think that landlords should continue to have the ability to manage their estates in a flexible and efficient way, so long as the interests of occupiers are also fully taken into account.
9.32 In view of the fact that we anticipate that most type I agreements, which provide the highest security of tenure, will be made by social landlords, we have concluded that the approach in the Housing Act 1985 is the more appropriate one for the scheme we now propose. The Housing Act 1985 was meant to give tenants security in their homes. Its approach is to balance the social landlord's need for efficient use of their stock against the need to provide security and respect for home and family life, as well as avoiding disrupting the sustainability of communities by unnecessarily moving those who have created an established community.
9.33 We therefore recommend that there is a compulsory-minimum term in the agreement, to the effect that the landlord may take possession proceedings in a list of circumstances where, without the occupier being in breach of the agreement, it is nonetheless in the broader public interest that the landlord should be able to seek possession.[10] In such cases a court may order possession only if it finds that it is reasonable to do so and that suitable alternative accommodation will be provided for the occupier who is being displaced.[11] We also recommend that there should be a limited right for landlords to seek possession where a joint occupier withdraws from or abandons the agreement.[12]
9.34 The one difficulty with the list approach is that it may fail to cover closely analogous situations in which there is a good case for the landlord having the same flexibility. For the reasons given above, we do not recommend giving landlords a general power to seek possession, simply where they are able to provide suitable alternative accommodation, as is possible under the Rent Act 1977 or the Housing Act 1988. At the same time we think the system needs to be more flexible than is currently provided for in the Housing Act 1985.An additional more general ground?
9.35 While we do not think that there should be a general power to evict simply for under-occupation,[13] nevertheless there should be scope for repossession in other analogous circumstances where particular estate management needs pass a similarly high threshold test. We shall therefore recommend that it should be possible to allow a landlord to seek possession in other similar cases. The provision should make clear that it is only applicable in exceptional circumstances and where there is a particular need of the landlord which justifies eviction. As with the other estate management grounds, it will be subject to the availability of suitable alternative accommodation and to the test of reasonableness. By requiring the landlord to show that exceptional public interest is involved, human rights considerations will be taken fully into account.
9.36 There are currently two sets of provisions relating to the definition of suitable alternative accommodation.[14] While they seek to achieve similar objectives, they will need to be combined into one. In CP 162 we asked whether these tests might be simplified. We did not receive any suggestions from consultees on simplifying them.Suitability of alternative accommodation
9.37 We recommend that the reformulation should be based on the Housing Act 1985 version, reflecting the general policy that creating a unified social occupation agreement requires movement towards the secure tenancy regime created by the Housing Act 1985.
9.38 In CP 162 we asked whether the circumstances in which occupiers can lose their statutory security of tenure – for example, because a closing order had been made on the property – should also be dealt with by way of terms in the agreements. (These are sometimes referred to as "ghost" grounds for possession.) We have decided that they should not. Any eviction should be carried out by the relevant enforcement agency using their own statutory powers, rather than through the landlord using powers under the agreement. These powers cannot be realistically be made part of the agreement because they operate outside the agreement."Ghost" grounds for possession
9.39 We recommend that there should be two mandatory grounds for possession, available for type II agreements only:Mandatory grounds
(1) the notice-only ground; and
(2) serious rent arrears.
9.40 The notice-only ground refers to the ground, currently available in section 21 of the Housing Act 1988, whereby the landlord under an assured shorthold tenancy may seek possession solely on the basis of issuing a notice to the tenant indicating that he will be taking court proceedings to obtain an order for possession. The landlord has the right to do this, irrespective of whether there has been any breach of the agreement or other default on the part of the tenant, and irrespective of whether it is reasonable for the court to make an order.Notice-only ground
9.41 We recommend that this ground for possession should be retained in the scheme we propose. There is a widespread perception that the existence of the notice-only ground is a fundamental underpinning of the market approach to private sector renting. It would not be within the scope of a law reform exercise to question the basic approach.[15] It was also pointed out that, in practice, most private landlords grant agreements for at least six or twelve months. Thus the position of the occupier is not wholly insecure. But such security is provided by the terms of the agreement, not statute. We have concluded that this is a feature of the type II agreement which must be retained. Landlords who do not wish to take advantage of this ground can always remove it from their agreements with occupiers.
9.42 Ground 8 of Schedule 2 to the Housing Act 1988 provides that, if a tenant is in two months' arrears of rent, both at the date of the issue of the notice of intention to take proceedings and at the date of the subsequent hearing, the court must order possession, again irrespective of any default on the part of the tenant (for instance where the sole reason for rental default is maladministration of housing benefit). As noted earlier,[16] we do not see any justification for the retention of this ground for possession in relation to type I agreements. But we do see it as essential for type II agreements, particularly if private landlords are to be encouraged to enter longer fixed-term type II agreements.Serious rent arrears
9.43 We shall therefore recommend that the court have jurisdiction to make a mandatory order in circumstances similar to ground 8. The amount of rent owing should be set at two months, as at the date of the issuing of the notice of intention to take proceedings, and at the date of the court hearing. We shall also recommend that type II agreements should include a term enabling the landlord to seek a possession order from the court on this mandatory basis.
9.44 No other mandatory grounds will be provided. While, under the current law, there are other mandatory grounds provided for in the legislation,[17] we found no evidence of their significant use in practice. In the interests of simplification, we recommend that they should not be taken into the new scheme.Abolition of other mandatory grounds
9.45 In this section we set out our detailed recommendations on matters relating to notices. We recommend that specimen notices should be attached to the model agreements. The effects of the rules we recommend are summarised in Diagram 9.1.Notice requirements
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Discretionary proceedings
9.46 Wherever possession is sought on one of the discretionary grounds, we recommend that a landlord must serve a prescribed notice on the occupier(s) before the court can entertain possession proceedings.[18] The court may lift the requirement if it considers it just and equitable to do so. Currently this is usually on the basis that the tenant has not suffered any disadvantage as he or she was otherwise aware of what would have been in the notice.Notices to contractual occupiers
9.47 We recommend that there is a compulsory-minimum term in all occupation agreements stating that the landlord will serve such a notice before taking possession proceedings. The provision should be framed so as not to prejudice the court's ability to waive the notice when that would be just and equitable.
9.48 We recommend that the notice should contain a statement of the factual and legal basis for seeking possession. The landlord will not, as at present, have to write out a statutory ground in full. The notice will simply refer to the term in the agreement under which repossession is sought.[19]
9.49 We recommend that current requirements about the length of the notice that must be given should be simplified. Where possession is sought on a discretionary basis, all notices must give one calendar month between the date of the issue of the notice and the date of issue of proceedings in the court.
9.50 The only exception will continue to be where possession is sought on the basis that the term in the agreement prohibiting anti-social behaviour has been broken. In such cases, notice of the intention to take proceedings will be able to be issued on the same day that proceedings are actually issued.[20]
9.51 The issuing of a notice of intention to take proceedings is likely to cause the occupier some uncertainty, and possibly distress, particularly if he or she is unclear whether the landlord will in fact take proceedings. We therefore think that there should be a default term that the maximum period of notice should be three months. A landlord will be able to vary this term to agree that any notice served by him will be for a longer period; this would have to be fair within UTCCR principles.
9.52 As noted, the minimum period of notice should be one calendar month. We recommend that the notice should be able to start and end on any day. In particular, the notice should not be dependent on any rental "period" of a tenancy, and should not be tied to the day of the week or month on which the rent is due to be paid.
9.53 We do not think that notices of intention to take proceedings should be left hanging over occupiers, unacted upon. The notice should become ineffective, as now, after a set period.[21] We recommend that this period should be 6 months, rather than the 12 months currently found. Where the landlord fails to issue proceedings within the period of validity of the notice, he or she will not be able to start proceedings until another notice of intention to take proceedings has been issued.Use it or lose it
9.54 By analogy with the procedural rules relating to mortgage possession proceedings,[22] we recommend that the CPR should provide that notice that proceedings have been issued must also be served on others occupying the premises on a non-contractual basis. This is to ensure that they are put on notice that their occupation is under threat and they may therefore start to make alternative arrangements.Notices to non-contracting occupants
9.55 The CPR should be amended to provide that any person on whom a notice is served under these provisions may at the court's discretion be joined in the possession proceedings where the court has a discretion about granting possession.
9.56 In the case of notices of intention to take proceedings on the mandatory grounds, it should not be possible for the court to waive the notice requirements.Mandatory proceedings
9.57 We recommend that there should be a compulsory-minimum term providing that a landlord who wishes to use the notice-only ground must give at least two months' notice of intention to take proceedings. As with other notices, the effective period of the notice should not be tied to the day on which rent is due.Notice-only ground for possession
9.58 We also think that a maximum period of notice should be prescribed, for the same reasons.[23] As with type I agreements, we recommend that the maximum default period should be three months.
9.59 As with notices under discretionary grounds, notice-only notices should become ineffective if not used to start proceedings within a set time. In the case of notice-only notices the time limit for taking proceedings following the expiry of the period of notice should be four months.
9.60 We recommend that the landlord should be able to use the same notice of intention to take proceedings as for a discretionary ground, suitably adapted to meet the requirements of this ground for possession.[24] The period within which proceedings must be taken, following expiry of the period of the notice, should be the same period of six months as applies to other notices (save notice-only notices).Serious rent arrears
9.61 As discussed below (paragraphs 9.109 to 9.121), procedures are available for occupiers to give notice to their landlords. Practical experience suggests that in many cases occupiers simply leave the premises without giving their landlords any form of notice that they are leaving. While many may regard this as deplorable, it is a fact of life. One of our objectives in reforming housing law is to ensure that the legislative framework takes into account what is likely to happen in the real world as well as what ought to happen if people followed the rules.Abandonment
9.62 There is a Scylla and a Charybdis to be avoided here. The recovery of possession must not be made too difficult or time-consuming for a responsible landlord in the case of a genuine abandonment. However, the irresponsible landlord must not be provided with an easy method of obtaining possession, which can be used to circumvent proper procedures when the occupier has not genuinely abandoned the property.
9.63 In the case of a true abandonment, it is not in the interests of either party that the legal position should remain uncertain any longer than necessary. The landlord will be unable to relet the property; if it is left empty, it will be susceptible to vandalism and decay. The occupier will remain liable for the rent (although from a practical point of view the landlord may well be unable to recover it). It does not seem sensible to require the landlord to take possession proceedings in the normal way (in view of the length of time this will take).
9.64 Here we discuss our recommendations where there has been a total abandonment of the premises – that is, where all the occupiers have quit, leaving the premises empty. We discuss what should happen where there has been partial abandonment of the premises, that is, where some occupiers are left in the premises, below.[25]
9.65 Although the law does currently provide some means for resolving the issues contemplated in this context, it is of very uncertain scope. The law on the surrender of a tenancy is particularly difficult. We regard the requirement that express surrender can only be achieved by deed as quite inappropriate in this context.
9.66 For this reason, we proposed in CP 162 that there should be a process available to landlords whereby they could lawfully regain possession of residential premises that had been abandoned, modelled on provisions already available in the Housing (Scotland) Act 2001.[26] This suggestion was widely welcomed by consultees.
9.67 The definition of abandonment should be that:
(1) the occupier is no longer using the property as their home, whether they are required to do so or not; and
9.68 We recommend the creation of a procedure to enable the landlord to regain possession by service of four weeks' notice – the abandonment notice – on the occupier of the landlord's intention to terminate the agreement, where the landlord has reasonable grounds for believing that the house is abandoned. The landlord will then be able lawfully to take possession of the house without any further proceedings. It will only be necessary for the court to become involved if the occupier, aggrieved by this procedure, applies to the court for a remedy within six months of the termination of the notice period.(2) there is evidence of the occupier behaving in a way which indicates an intention no longer to be bound by the agreement.
9.69 The procedure should be available where (whether or not any furniture and other goods are present at the property) the landlord has reasonable grounds for believing that the occupier(s) under the occupation agreement has abandoned the property.
9.70 It may be that non-contractual occupants are still living in the property. If so, this may provide evidence that the occupier has not, in fact, abandoned. But if the test for abandonment is made out, any such occupants would be trespassers, and liable to eviction as such. The procedure would similarly be available where squatters had occupied the property.
9.71 Use of the procedure would be dependent on a reasonable belief on the part of the landlord that the property is no longer occupied by the contractual occupier and that the occupier under the occupation agreement does not intend to occupy it as his or her home.[27]
9.72 The landlord should have an immediate right to enter the premises to secure it and its contents against vandalism. If furniture or other goods are left at the property, the landlord can be left to deal with these (by relocation, storage, return or disposal) in accordance with the ordinary law relating to the disposal of personal property.[28]
9.73 The legislation would need to make it clear that the abandonment notice would be effective to terminate the occupation agreement, regardless of whether it was fixed term or periodic, and regardless of whether it was a type I or a type II agreement.
9.74 Provision will need to be made about the method of service of the notice where the occupier is untraceable. It should be possible in the last resort for the notice to be served by posting it conspicuously at the main access to the property.
9.75 The risk that the occupier may have left the property for some purpose other than abandonment (for example, holiday, relocation of employment, accident or illness) would be taken care of by the occupier's right to apply to the court within six months of the termination of the notice period, for reinstatement of the property if it has been not been relet, or otherwise for the provision of suitable alternative accommodation.
9.76 We recommend that the occupier should be able to seek damages where the landlord has failed to comply with the procedure, or did not have reasonable grounds for believing that the essential facts required for the service of an abandonment notice in fact existed.
9.77 We have considered whether the procedure for recovery of possession on abandonment should only apply where the agreement contains a requirement to reside or use the property as the occupier's only or principal home. However, it is perfectly possible for a property to be "abandoned" in the sense we intend even if there is no such requirement.
9.78 We recommend that fixed-term type II agreements[29] should not automatically terminate by expiry of the term of the agreement. If either or both parties wish to terminate the agreement at the end of the fixed term they will have to use one of the other methods of termination. Either they should give notice or they should agree to enter a new agreement.Ending of fixed-term agreements
9.79 If the occupier does not leave and the parties have not agreed a new fixed term, we recommend that the agreement will take effect as a periodic type II agreement. The continuation of the agreement will be on the basis that any terms inconsistent with its becoming a periodic agreement are amended. Thus the term which sets the end date for the fixed term, which will be redundant, will be effectively deleted. In addition, the landlord will be entitled to add the term providing for the notice-only ground for possession. The occupier will also be entitled to add the term permitting him or her to terminate the agreement on notice.[30] This will prolong the status quo while the landlord and occupier decide what to do. The effect of these recommendations will be that either party will be able to end the agreement by giving notice without needing reasons.
9.80 The effect of these provisions is to vary the agreement. The occupier should have the right to require the landlord to provide a written statement of the agreement as so varied. Failure to comply would trigger the normal sanctions.
The powers of the court
9.81 Where possession is sought on a discretionary ground, we recommend that the court must not make an order for possession unless it considers it reasonable to do so.[31]Discretionary grounds
9.82 The long-standing approach to reasonableness was recently restated by Clarke LJ in Gil v Baygreen Properties Ltd:[32]Structured discretion
When considering reasonableness, it is the duty of the judge to take into account all relevant circumstances as they exist at the date of the hearing in a "broad, common-sense way as a man of the world ... giving ... weight as he thinks fit to the various factors in the situation": see London Borough of Haringey v Stewart & Stewart,[33] following the statement of Lord Greene MR in Cumming v Danson.[34]"
9.83 We nevertheless wish to tackle perceived problems, widely expressed in responses to CP 162, about the variability of decisions on reasonableness. We have concluded that the general discretion available to judges should be "structured". The structuring should ensure compliance with human rights law, so that the court tests whether the benefits from the legitimate aims to be achieved by eviction are proportionate to the interference with the rights of the occupier and anyone else whose home life will be affected by an order for possession made against them.We wish to retain the breadth of this approach.
9.84 We recommend that the Bill's provisions on reasonableness should require the court to consider all the relevant circumstances, including, but not necessarily limited to, those set out in a statutory list. The court should also consider whether the benefits to be gained by making the proposed order (as opposed to making any lesser order, or no order at all) make it reasonable to make it despite the disbenefits.
9.85 On one side the court should consider, as far as relevant in the individual case, the likely effect of an order on the home, family and private lives of the contractual occupier(s), and then of anyone else known to occupy the property as their home.[35] This includes considering how long it is likely to take each person or group to find another home, and how they will be affected by not having a home. It should specifically include any undertaking to offer a fresh agreement (of the same property or elsewhere) the landlord is prepared to give to any of the occupants, whether singly or jointly.[36] It should also include consideration of whether the occupier would be likely to comply with the terms of suspension of a possession order.[37]
9.86 It should not include consideration of whether the person is likely to be rehoused under the homelessness provisions in Part VII of the Housing Act 1996, as it is undesirable to have the court second-guess a process which should follow the eviction decision rather than being a contributing factor to it.
9.87 On the other side the court should consider, as far as relevant in the individual case, the likely effect of making an order, as against not making the order sought, on the interests of the landlord and a list of others. (This would correspond with the consideration of the legitimate aims being pursued in the interference with human rights under Article 8.) The effect on the landlord should include the effect on the landlord's interests, including their financial interests, but also any interest the landlord may have in being able to meet housing need or fulfil other housing functions.
9.88 The other groups to be considered are, in the order of priority which would normally be followed, whichever are relevant on the facts from:
(1) the landlord's other occupiers;[38]
(2) people on any waiting list for the landlord's properties;[39]
(3) other neighbours who are not renting from the landlord; and
9.89 In cases of breach of the agreement this should include consideration of the importance of the term breached to the relevant groups, the seriousness of past and likely future breaches,[41] the degree to which any of the contractual occupiers or other occupants are responsible for the breach,[42] and any attempts to resolve the situation previously, including by the use of alternative dispute resolution.[43](4) the local community.[40]
9.90 Where the landlord under type I agreements has adopted, and agreed with its occupiers, a code of practice relating to estate management or, having complied with the duty to consult[44] has published a written agreement with its occupiers, the court should be required to take account of these documents in considering the reasonableness of the order being sought. We recommend that there should be a reference to such documents in the structuring list. The Secretary of State should have power to make regulations, which would cover how any agreement should be drawn up.
9.91 In Consultation Paper 162, at paragraphs 12.33 – 12.58, we described a problem that is particularly severe in rent arrears cases, but also applies in other discretionary grounds cases.Suspended possession orders
9.92 The current law requires a full hearing for a possession order, even though it may be unopposed and landlords are only asking for a suspended order. By contrast the current law does not require any hearing to be held when the issue of a warrant for breach of a suspended possession order is at stake, even though it is the warrant that produces the actual eviction. Indeed, the warrant application is regarded as essentially an administrative procedure based on a simple allegation by the landlord, of which the tenant need have no notice, that the terms of the suspension have been breached. (Although the application for the warrant is without notice, the courts do now, as a matter of practice, use a standard form to notify tenants after it has been issued.) The tenant has to read the note on this form to discover that it is up to him or her to apply to set aside or suspend the warrant.
9.93 There is widespread use of possession actions, not actually because the landlord wants to obtain possession, but as a tool to aid debt collection. Hearings relating to such orders are listed for determination in a matter of a few minutes each. The merits of the majority of warrants are not investigated because they are not challenged. In most cases, the tenant is neither represented nor present in court.[45]
9.94 Consultees were opposed to the additional bureaucracy of always requiring a hearing before the issue of a warrant for breach of a suspended possession order, and we accept that they have a point. This still leaves the original problem of the inappropriate use of possession proceedings for collecting rent arrears. We referred to the solution suggested by Lord Woolf[46] and suggested one of our own.[47] Responses from housing managers were split on the impact such a change would have on the management of arrears. Some saw the attraction of such a system, while others saw suspended possession orders as an important tool in controlling arrears.
9.95 We still consider that the broad objective should be to ensure that proportionate consideration is given to the reasonableness of making an order for possession at appropriate stages before an agreement is terminated on a discretionary basis because of rent arrears. However, the effect of a new system on the ability of landlords to control arrears is clearly of fundamental importance, and it is not a matter on which we can come to a concluded view. We therefore recommend that the new Act gives the Secretary of State a power to use secondary legislation to run pilot schemes to test alternative procedures; and to allow him or her to introduce it nationally if the pilot schemes prove successful.
9.96 One of the issues we wish to tackle is the inelegant concept of the "tolerated trespasser".[48] Its latest twists are illustrated in Dunn v Bradford MDC.[49] In that case, the Court of Appeal overturned a decision that a tenant, whose tenancy had ended on breach of a suspended possession order and who had then left following a period as a tolerated trespasser without the need for a warrant, could not have her tenancy reinstated to the point at which she left so as to allow her to sue for disrepair during that period. The root problem is that a tenancy terminates on the breach of a suspended possession order, however minor, rather than at the point at which a tenant is actually evicted.The problem of the "tolerated trespasser"
9.97 We recommend that breach of a suspended possession order should not terminate the agreement. Instead, we recommend that the agreement should continue in existence until the point at which the occupier actually leaves the home, either voluntarily, or having been forcibly evicted under the authority of a warrant for possession. This approach would mean that the rights and obligations under the agreement, including landlords' repairing obligation, would continue. We have little doubt that this will result in a simplification of the law.
9.98 We accept that such a recommendation could potentially place a greater burden on the landlord. However, we believe that these potential difficulties can be resolved if landlords make a positive choice either to evict or not to evict. In the same way that we have recommended that notices of intention to take possession proceedings should have limited validity, so too do we think that landlords who could obtain a warrant for possession should be encouraged to make up their minds. They should not let arrangements drag on indefinitely with the former occupier living in a kind of twilight status. Landlords will therefore limit any potential exposure by completing the process of eviction, triggered by the occupier's breach of the suspended order.
9.99 When dealing with cases on the mandatory grounds, we recommend that the new Act should replace section 89(1) of the Housing Act 1980 with a similar provision requiring possession orders to be made within 14 days, with up to 6 weeks' alleviation in cases of exceptional hardship.Mandatory grounds
9.100 We will also recommend that, in relation to proceedings based on the notice-only ground for possession, the Rules Committee should reproduce the "accelerated possession procedure" which currently applies to proceedings based on section 21 of the Housing Act 1988.[50] It allows the court to make a possession order without a hearing, greatly reducing listing times and expense, if the occupier does not raise a substantive defence in response to the landlord's claim form and the landlord does not oppose any application for extra time before possession by the occupier.Accelerated possession
9.101 Under our proposed scheme, it is clear that the availability of the mandatory notice-only ground for possession will apply not only to private landlords, but also to social landlords, in those contexts where use of type II agreements is permitted.[51]Public law challenges
9.102 Decisions by a landlord that is a "public body" for the purposes of public law are amenable to judicial review. Anything done by a "public authority", a distinct status defined by the Human Rights Act 1998, will be unlawful if it amounts to a breach of a substantive provision of the European Convention on Human Rights, such as Article 8, which guarantees respect for the home. The extent to which "public body" and "public authority" are distinct or co-extensive is a matter of academic debate, and has yet to be definitively determined by the courts. For current purposes, they can, we think, be treated as though they apply to the same classes of landlord.
9.103 Local authorities are clearly both public bodies and public authorities. The position in respect of RSLs is more complicated. The Court of Appeal has held in Donoghue v Poplar Housing and Regeneration Community Association[52] that the question of whether an RSL is a public authority[53] or not depends on a close examination of the history and nature of the particular RSL under consideration. Thus, in that case, the role of an RSL was found to be "so closely assimilated" to that of the local authority whose stock it had been created to take over that it was a public authority. The conclusion rested on a number of specific factors (such as the fact that it had local authority nominees on its board, it was subject to local authority guidance and so on). Had one or more of these features not been present the decision might have gone the other way.[54]
9.104 In principle, both judicial review and human rights challenges can be mounted against decisions to take possession actions. This provides occupiers with a potential means to challenge the decision of a public body/authority to use a mandatory ground of possession.
9.105 In a series of cases on the extent to which human rights challenges could be dealt with on the hearing of the possession case, the Court of Appeal had held that any eviction "engaged" article 8(1), the basic guarantee, and so had to be justified under Article 8(2) as proportionate and necessary in a democratic society.[55] That in turn led to problems with accommodating such challenges to the supposedly automatic nature (once the primary facts are established) of mandatory grounds, and other similar rules. However, the House of Lords have recently considered broadly the same question in Qazi v London Borough of Harrow.[56] The case was not directly concerned with mandatory grounds of possession, but some of the principles may have application to such circumstances (although it is also arguable that some of the five speeches are of wider application than others).
9.106 Mr Qazi's wife had issued a notice to quit their jointly held secure tenancy, thus terminating it. Mr Qazi was refused a new tenancy in his own name, and the local authority landlord took possession proceedings. In the House of Lords, the minority (Lords Bingham and Steyn) agreed with the approach taken by the Court of Appeal. The majority (Lords Hope, Millett and Scott), however, all concluded that it was not necessary for the county court to consider whether the order sought could be justified under Article 8(2), although on somewhat different bases. However, it was not contested that Mr Qazi could have applied for judicial review of the landlord's decision to seek possession.
9.107 It will no doubt take some time for the implications of Qazi to be worked out by the Court of Appeal in various contexts. A great, and unnecessary, complicating factor, however, is that judicial review must be taken in the High Court, whereas possession actions are confined to the county court.[57] In our view, the county court is the better forum for decisions on housing matters, whether grounded in public law principles or in occupation agreements.
9.108 We therefore recommend that, in such cases, an occupier against whom possession proceedings have been brought should be able to ask the county court to review the decision to take possession proceedings on public law grounds. In so doing, the court would apply the principles applied by the High Court on an application for judicial review. A model for such an approach exists in the current law on the determination of homelessness decisions.[58]
9.109 In this section we set out our recommendations about the termination of agreements by the occupier.Termination by the occupier
Termination by occupier's notice
9.110 The present law provides that an occupier under a periodic tenancy can give notice to quit the agreement, which must be for at least four weeks. We wish to retain this possibility. We therefore recommend that there should be a compulsory-minimum term in periodic agreements that the occupier can give written notice to terminate. A specimen form of the notice will appear in the model agreement.[59]Periodic agreements
9.111 A default term should provide that the minimum notice the landlord can expect is one calendar month between service of the notice and the date on which the agreement terminates and the occupier leaves. An occupier will be able to contract to give more than the minimum of one month, and may in fact give more even when not contractually obliged to do so.
9.112 The minimum period should be a calendar month, starting on the day the notice is issued.[60] The length of notice should not be dependent on any "period" of a tenancy. Even if the rent is paid in advance quarterly, or once per academic term or over any other longer time-scale, the notice term should simply require one month's notice which need not end on a rent day. The agreement will also need a default term providing that the landlord will refund the appropriate proportion of any pre-paid rent or other charges.
9.113 In fixed term type II agreements there may be a break clause, allowing one side or both to terminate the agreement before the end of the fixed term. We recommend that occupiers' break clauses in fixed-term agreements should operate as similarly as possible to occupiers' notices in periodic agreements. Thus, it should be possible for an occupier to serve a three months' break clause notice when there are two months of a fixed term still to run. This would take effect to terminate the agreement without further action one month into the subsequent periodic agreement which had arisen by operation of law, in default of further agreement.Fixed-term agreements
9.114 There should be a compulsory-minimum term that the agreement should not terminate until the end of the notice period (unless both parties agree an earlier date), but otherwise should only terminate when the occupier actually gives up possession after serving the notice, even if that is later than the end of the notice.
9.115 Where there are joint contractual occupiers, we recommend that there should be a default term in the agreement that will require that the joint occupiers all take part in any action that could otherwise be taken by a sole occupier.Joint occupiers
9.116 Where there is provision for notice, one or more joint occupiers should be able to serve it, even were not all join in. The result will be to terminate the agreement in relation to those occupiers who have given notice; it will not have the effect of terminating the whole agreement.
9.117 Currently the Rent Act 1977 has a specific ground, case 5, whereby a landlord may seek an order for possession where the tenant fails to leave having issued a notice to quit to the landlord. This ground only applies where the landlord can show that it is reasonable to evict because they would otherwise be "seriously prejudiced" as they have contracted to sell or let the property or taken other particular steps. In the secure and assured regimes no special provision is made. In these cases, the legal position is that the tenancy will end on the expiry of a tenant's notice to quit, leaving the landlord to repossess against the former tenant who now has the status of trespasser.Termination where an occupier does not leave after giving notice
9.118 We have considered whether our new scheme should contain a version of Case 5. We have concluded that this would put an unfair burden on the landlord who has been told that his occupier will leave. It would not be right to require the landlord to make a full case to persuade a court that it be reasonable for it to make an order for possession against the former occupier.
9.119 We want to achieve an outcome that is fair from the landlord's perspective, given that the process has been started by the occupier, rather than the landlord. We have come to the view that in this situation, while the landlord should still be required to obtain an order from the court, this should be on the basis that the former occupier becomes a trespasser, with no residual rights to occupy under the original occupation agreement.
9.120 We do not think that this position should be allowed to remain indefinitely. Thus, on the principle "use it or lose it", there should come a point at which, following the continued failure of the landlord to take possession proceedings against the former occupier, the former occupier's status as trespasser should be regarded as coming to an end, and a new occupation agreement between the landlord and occupier should be deemed to have come into being. The landlord will have two months in which to decide what to do.
9.121 The same principle will apply both to type I and type II agreements, periodic or fixed term. However, in any type II agreement where the landlord is entitled to use a notice-only notice which would have been of the same length as, or shorter than, the occupier's notice, then the landlord should be able to treat the occupier's notice as a landlord's notice-only notice. The practical consequence will be that the landlord will be able to issue the simpler and cheaper accelerated possession proceedings. These will usually be more convenient than bringing proceedings in trespass. The landlord will have to accept the consequence that the agreement will remain effective until the date on which the occupier either leaves the premises or is finally evicted.
Note 1 This will not be as revolutionary as it might seem. Many years ago the distinguished housing policy expert, the late Professor Nevitt, described the Rent Act as the “poor man’s lease” in that it actually set out in statute what would be found in the well-drawn lease available to the better off. Our intention is that all occupation agreements should benefit from the same clarity, but in the agreement itself. [Back] Note 2 There are some circumstances in which this is not required, for example, where the court can dispose of the notice requirement on the ground that that would be ‘just and equitable’. [Back] Note 3 See paras 9.45 – 9.60 below. [Back] Note 4 See paras 3.37 – 3.38 above. [Back] Note 5 See paras 9.82 – 9.90 below. [Back] Note 6 Each of the current Acts includes a possession ground for breach of the contract: see Rent Act 1977, Schedule 15, case 1; Housing Act 1985, Schedule 2, ground 1, Housing Act 1988, Schedule 2, ground 12. [Back] Note 7 The main grounds replaced will be Housing Act 1985, Schedule 2, grounds 1, 3 and 4, and Housing Act 1988, Schedule 2, grounds 10-13, and 15. [Back] Note 8 See Rent Act 1977, Schedule 15, case 1; Housing Act 1985, Schedule 2, ground 1 and Housing Act 1988, Schedule 2, ground 12. [Back] Note 9 Terms prohibiting movement of furniture have been fairly common in the past in some parts of the furnished private rented sector. The OFT Guidance on Unfair Terms in Tenancy Agreements (November 2001) at para 18.8.5 gives the example of a term prohibiting pets in general, which would, if valid, prohibit even keeping a goldfish. [Back] Note 10 This will be based on the list currently found in the Housing Act 1985. The landlord can choose to leave out any items from the list or to impose more stringent requirements (favouring the occupier) in relation to them. [Back] Note 11 It will not be essential that the alternative accommodation has to be provided by the same landlord. The fact that any alternative letting will be on the same (type I) terms will facilitate this. [Back] Note 12 See paras 11.33 – 11.34 below. [Back] Note 13 We recommend that, following the death of an occupier, landlords should have a limited right to seek possession of premises that, as a consequence are not being used to their full capacity. See paras 14.9 – 14.10 below. We note that some social landlords do in fact seek to encourage movement of tenants from under-occupied premises by providing cash incentives; these practices would in no way be affected by our proposals. [Back] Note 14 They are found in Housing Act 1985, Schedule 2, Part IV and Housing Act 1988, Schedule 2, Part III. [Back] Note 15 It is noteworthy that, with very limited exceptions, respondents did not seriously question the continued existence of the notice-only ground. [Back] Note 16 See paras 3.37 – 3.38 above. [Back] Note 17 These grounds are: (1) the landlord’s own need to occupy the property; (2) repossession by a mortgagee in the event of the landlord defaulting on mortgage payments; (3) eviction from a holiday home following a winter let; (4) eviction from student accommodation following a vacation let; (5) eviction to enable a minister of religion to occupy the property as a residence from which to perform his or her duties; (6) eviction to enable the landlord to demolish, or carry out work on, the premises; (7) the death of the tenant, where there is no widow or widower or person who lived with the tenant as husband and wife. [Back] Note 18 These provisions will be similar to those currently found in the Housing Act 1985, ss 83 and 83A and the Housing Act 1988, ss 8 and 8A. [Back] Note 19 We had considered making landlords attach a copy of the written agreement when serving a notice, but we were persuaded that that would be unnecessarily cumbersome. [Back] Note 20 This reflects the current position. [Back] Note 21 See Housing Act 1985, s 83(3)(b) and (4)(b), and Housing Act 1988, s 8(3)(c). [Back] Note 22 CPR Rule 55.10. [Back] Note 23 See para 9.51 above. [Back] Note 24 Set out para 9.48 above. [Back] Note 25 See paras 11.31 – 11.32 below. [Back] Note 26 Sections 17 – 19; they replaced Housing (Scotland) Act 1987, ss 49 – 51. [Back] Note 27 The genuineness of such a belief can sometimes be in issue; see Tannoch v Glasgow City Council (2000) 32 HLR 64 decided under the Housing (Scotland) Act 1987, ss 49, 50. [Back] Note 28 See Torts (Interference with Goods) Act 1977, ss 12, 13, Schedule 1. [Back] Note 29 Type I agreements will be periodic only. [Back] Note 30 See paras 9.111 – 9.114. The effect will be similar to Housing Act 1988, s 5(2) – (4), but we do not think it necessary to reproduce the elaborate provisions in section 6 of that Act for fixing the terms of a new tenancy. [Back] Note 31 This will reproduce the effect of Housing Act 1985, s 84(2)(a). The new Act should also reproduce the effect of Housing Act 1985, s 85, and Housing Act 1988, s 9, in giving an “extended discretion” for the court to adjourn cases, and suspend or postpone orders, where discretionary repossession grounds are being used. [Back] Note 32 [2002] EWCA Civ 1340, [2002] HLR 12, at paragraph 41. [Back] Note 33 (1991) 23 HLR 557 per Waite J at p 562 and per Mustill LJ at p 563. [Back] Note 34 [1942] 2 All ER 653, 655. [Back] Note 35 See para 9.54 below for provisions as to notices to non-contractual occupants. [Back] Note 36 The effect would be to make it possible to take proceedings against two joint contractual occupiers, for a breach of which only one is guilty (though the other is jointly and severally liable), and to obtain possession by undertaking to give a sole agreement for the same property to the innocent occupier. This would be as close as we feel it is right to come to allowing possession proceedings, as opposed to abandonment proceedings, to be taken against only one of several joint occupiers. [Back] Note 37 This should mean, as ought to happen now, that someone who will remedy the breach without the imposition of any order should have no order made (the proceedings should be adjourned on terms or dismissed). Someone who is likely to comply with, but not without, a suspended possession order, should have one made against them (but subject to the points about warrants and suspended orders below). Someone who is unlikely to comply with a suspended order should have an absolute order made. [Back] Note 38 These will tend to be most relevant in anti-social behaviour cases, and will act as a counter-balance to the fact that we are not recommending a contractual right to require the landlord to take action against their other occupiers. In cases of rent arrears it may be that the cost of carrying rent arrears has to be shared out among the landlord’s other occupiers in increased rents or reduced spending on the properties. In an estate management case the neighbours might for example be affected by whether an estate modernisation scheme can go ahead. [Back] Note 39 This might be most relevant in the estate management grounds relating to properties no longer occupied by someone with a special need for the features of that property. It could also include whether people would want to take up offers of properties on an estate being terrorised by a particular household. [Back] Note 40 These last two would most commonly be relevant in cases of anti-social behaviour, but could also be relevant in other cases such as estate management cases where community regeneration is at stake. [Back] Note 41 As explained above, persistent past breaches should be able to be considered if they provide evidence of likely future breaches, even if the occupier is not in breach at the moment. [Back] Note 42 This will cover the situations where nobody living at the property is really responsible, the commonest of which is Housing Benefit delays. This should not mean that eviction is impossible in such cases, merely that the landlord has to show that they cannot be expected to tolerate the continuing problems even though the occupier is not to blame. In other common cases, where contractual occupiers find themselves unable to evict or control their adult children or other household members, who are causing anti-social behaviour, the landlord may nevertheless still be entitled to possession as he/she cannot be expected to continue to tolerate the behaviour. In joint agreements, the landlord may wish to try to improve their chances by offering to grant a new agreement for the same property in the sole name of the innocent occupier. This would lessen the impact on the innocent party, while achieving the full effect on the guilty. [Back] Note 43 This should cover both whether the landlord has reasonably tried other means to resolve the problem and how reasonably the occupier has responded. In particular it should cover the history of a case in court, so that a sixth application for suspension of a warrant is viewed very differently from suspension of the original order. [Back] Note 44 See para 8.121(5) above. [Back] Note 45 The responses indicate that practices vary enormously between courts in different areas. In some areas, a high proportion of tenants will attend, whereas in others it is very rare for them to do so. We were told of county courts in which judges routinely signed in chambers dozens of suspended possession orders drawn up by a housing manger. [Back] Note 46 Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (1996), ch 16, paras 20 to 29 available at: http://www.lcd.gov.uk/civil/finalfr.htm. Lord Woolf recommended a two-stage procedure that would in effect replace the suspended possession order with an order to pay the rent. Instead of terminating the agreement, breach of the order would lead to a hearing, if the landlord wanted an outright possession order. This would replace the current procedure involving the issue of a warrant followed by an application by the occupier to suspend the warrant. [Back] Note 47 We proposed the abolition of suspended possession warrants and their replacement with an administratively issued notice from the court, warning an occupier that proceedings for possession will be commenced if he or she does not rectify arrears. If the occupier continued in arrears, the landlord would apply for an outright possession order. [Back] Note 48 For detailed criticism of the concept, and support for our approach to its removal, see Susan Bright, “The concept of the tolerated trespasser: an analysis” (2003) 119 LQR 495. [Back] Note 49 [2002] EWCA Civ 1137, [2003] HLR 15. [Back] Note 50 See CPR Part 55(II). [Back] Note 51 See paras 5.28 – 5.51 above. [Back] Note 52 [2001] EWCA Civ 595, [2002] QB 48. [Back] Note 53 That is, a “functional” public authority under the Human Rights Act 1998, s 6(3)(b). [Back] Note 54 For a case in which a charity providing supported housing was found not to be a “public authority”, see R (Heather and Others) v The Leonard Cheshire Foundation [2002] EWCA Civ 366, [2002] 2 All ER 936. [Back] Note 55 For a discussion of the case law as it was in April 2002, see CP 162 paras 5.1, 5.54 – 5.57, 5.70 – 5.77. [Back] Note 56 [2003] UKHL 43, [2003] 3 WLR 792. [Back] Note 57 The litigation, including Qazi itself, has tended to focus on the question of whether human rights considerations give a tenant a defence to a possession action, rather than examining the parameters of the tenant’s rights in judicial review. [Back] Note 58 Housing Act 1996, s 204A. It has been held that the predecessor to this provision gave the county court a jurisdiction that was equivalent to judicial review, see R v Brent LBC ex parte Connor (1998) 31 HLR 923, 924 per Tucker J. [Back] Note 59 This will be without prejudice to a consumer’s rights to terminate a contract under the Consumer Protection (Distance Selling) Regulations 2000, SI 2000 No. 2334. [Back] Note 60 The current law relates the dates for such notice to the dates which under the common law or Protection from Eviction Act 1977, s 5, were dates on which a “notice to quit” could be issued. This should not be replicated in the new scheme. [Back]