The Law Commission

PART 7

SURVIVORSHIP, SUCCESSION AND RELATED MATTERS

INTRODUCTION

7.1      What happens to an occupation contract when a contract-holder dies is an emotional and difficult issue, particularly where the contract-holder leaves a spouse, partner or other person with whom the deceased has been living. There are difficult questions of balance to be resolved. On the one hand, there is a perfectly understandable desire to offer protection to those who are bereft. Eviction of the recently bereaved is seen as heartless and unacceptable. On the other hand, where a consequence of the death of an occupier is that accommodation is no longer being used as effectively as it might be (for example, where a dwelling adapted for the needs of a disabled person no longer accommodates a person with a disability), wider social policy considerations may indicate that landlords should be able to move a person affected to more appropriate accommodation.

7.2      Current law responds to these issues by prescribing circumstances in which a person may succeed to a tenancy. But the succession rules differ, depending on the identity of the landlord. They also fail to cover some situations where succession rights might be thought appropriate. We recommend rationalisation of the current law.

7.3      We have two principal objectives: first, in line with our recommendations for the creation of a single social tenancy, to create a level playing field for all social landlords; second, to provide landlords with the opportunity to manage their estate as effectively as possible in line with the need not to treat the recently bereaved insensitively. This Part considers four issues which may arise on the death of a contract-holder:

(1) survivorship;

(2) succession rights;

(3) the transfer of fixed term standard contracts; and

(4) the estate management ground for possession.

SURVIVORSHIP^[1]

7.4      Before turning to the details of succession, it is important to remember that our scheme provides that, where there are joint contract-holders, the rights of a joint contract-holder who dies^[2] pass to the survivor in accordance with the principle of survivorship.

7.5      Thus, subject to the point made in the following paragraph, it is a fundamental term of all occupation contracts that whenever a joint contract-holder ceases to be a party to the contract, the remaining joint contract-holder(s) automatically become fully entitled to all the rights under the contract, and liable to perform fully all the obligations under the contract.^[3] The departed joint contract-holder is not entitled to any right nor liable to any obligation once they have left the contract.^[4] They neither lose any right nor waive any liability accruing before they left the contract.^[5]

7.6      These principles do not apply where the rights and obligations of a joint contract-holder under an occupation contract are transferred, following death or indeed while the joint contract-holder is still alive.^[6]

7.7      In many cases, therefore, spouses and partners can take advantage of the contract to pass their rights in the contract to their survivor. Rights of survivorship take precedence over any statutory scheme for succession.

SUCCESSION RIGHTS^[7] Introduction

7.8      Succession rights have long been an integral feature of housing law, but they have become very complex. Complexity has arisen:

(1) through the proliferation of statutory schemes, each with different succession rights;

(2) through the interface of contract, property and statutory provisions which provide for different consequences on the death of an occupier; and

(3) as the result of statutory silence on a number of issues which are significant in practice, the obvious example (until recently when the Civil Partnership Act 2004 came into force) being the application of the current rules to same sex couples.

The Bill provides a single statement of succession rights that applies to all occupation contracts.^[8]

7.9      We recommend measures which reflect the contemporary social reality of the family in a manner that is consistent with the Human Rights Act 1998 and the Civil Partnership Act 2004.

7.10      Following a development in Scotland, we also want to recognise demands placed upon relatives or others who look after elderly, ill or disabled people. It is often easier to provide the level of care required if the carer moves into the home of the vulnerable person. Many carers find it impossible to maintain their own home if they do this. Our recommendations recognise the reality of the sacrifices that carers make by protecting the position of unpaid carers who give up their own home to care for another in that other person's home.

7.11      At present, the succession rights for secure tenants in the Housing Act 1985 preclude succession to a spouse being followed by a succession of another member of the family, even if that person has lived with the tenant for all of their life. We think this is too restricted.

7.12      Some community landlords are concerned that the effect of these recommendations will unnecessarily restrict their ability to rent to those most in housing need. We think these fears are unlikely to be realised in practice. In Scotland, where similar rules have existed since 2001, experience is that relatively few social tenancies pass under the succession rules. Further, we recommend the estate management ground for possession (see below). In addition, it is known that under the present more restrictive rules, where succession is a genuine issue, it can generate significant levels of complaint to Members of Parliament. Our recommendations strike a better balance between the legitimate concerns of community landlords and the needs of individual occupiers.

The passing of the contract on death

7.13      Our scheme recognises the possibility of passing a contract on to one's children, though ensuring that this is done within sensible constraints of estate management. We believe that it should be possible to protect the normal expectations of a family within rented housing, that the partner and then a child of the family, if they have not set up home elsewhere, should be able to succeed to the occupation contract.

7.14      To achieve this outcome, the scheme provides a limited number of ways in which an occupation contract can be passed to another person following the death of a contract-holder. Subject to two exceptions, we recommend that our scheme of statutory succession should be the only way that someone can succeed to an occupation contract.

7.15      The two exceptions are:

(1) where there is a surviving joint contract-holder, when the right to occupy passes by operation of the principle of survivorship;^[9] or

(2) where there is a fixed term agreement, which, if the contract specifically provides for it, can be transmitted by will or intestacy.^[10]

7.16      The right to succeed arises on the death of a sole contract-holder under a secure contract, a periodic standard contract, or a fixed term standard contract which contains no provision for transmission by will or intestacy. For the right to be exercised, there must be at least one person qualified to succeed.^[11]

Persons qualified to succeed

7.17      A person is qualified to succeed if they are either:

(1) a priority successor; or

(2) a reserve successor.^[12]

7.18      If the current contract-holder is a priority successor, then there is a further right of succession to a reserve successor.^[13] If the current contract-holder is a reserve successor, then no other person is qualified to succeed.^[14]

PRIORITY SUCCESSOR

7.19      A priority successor is a spouse or partner of the contract-holder^[15] who occupied the premises subject to the occupation contract as their only or principal home at the time of the contract-holder's death.^[16] No person can be a priority successor where the contract-holder who died was a priority successor.^[17]

(1) If for example Alan was the original sole contract holder, married to Barbara, and Barbara was living in the premises at the time of Alan's death, then Barbara would be the priority successor. Barbara then becomes the contract-holder.

(2) Charles subsequently moves in with Barbara and lives with her as if they were husband and wife. On Barbara's death, Charles could not be a priority successor, because Barbara had been a priority successor in relation to the occupation contract.

RESERVE SUCCESSOR

7.20      A reserve successor is a person who is not a priority successor of the contract-holder and who is either a carer,^[18] or who meets:

(1) the family member condition; and

(2) the basic residence condition (unless they are a spouse, civil partner, or lived with the contract-holder as if they were husband and wife or civil partners).^[19]

In addition, a reserve successor must occupy the premises at the time of the contract-holder's death as their only or principal home.

7.21      The family member condition is that the person must be a member of the contract-holder's family.^[20] If the contract-holder was a priority successor, a person also meets the family member condition if they are a member of the family of the person the current contract-holder succeeded.^[21]

7.22      The basic residence condition is that, throughout the period of 12 months ending with the contract-holder's death, the person lived with the contract-holder or occupied the premises subject to the occupation contract.^[22] If the contract-holder was a priority successor, the period of residence includes living with the person the current contract-holder succeeded.^[23]

(1) In the example given in paragraph 7.19 above, Charles would be a reserve successor on Barbara's death. Charles would become the new contract-holder, even if he had not lived with Barbara or at the premises for as long as 12 months when Barbara died, as long as he was living there on Barbara's death. On Charles's death, there could be no more successions in respect of the contract.

(2) Debbie is the original contract-holder, living with her civil partner Emma, and Emma's daughter Fiona. On Debbie's death, Emma would be a priority successor, and become the contract-holder. When Emma dies, Fiona had been living with Debbie and Emma throughout the period of 12 months ending with Emma's death. Thus, Fiona would be a reserve successor, and become the contract-holder. There could be no more successions in respect of the contract on Fiona's death.

Carers

7.23      A carer can also be a reserve successor.^[24] To be a reserve successor, the carer must:

(1) meet the carer condition;

(2) meet the carer residence condition;

(3) occupy the premises as their only or principal home at the time the contract-holder died; and

(4) not be a priority successor of the contract-holder.^[25]

7.24      The carer condition is that the person must have been caring for the contract-holder, or a member of the contract-holder's family who was living with the contract-holder when the care was provided, at any time in the period of 12 months ending with the death of the contract-holder.^[26]

7.25      The carer residence condition is the same as the basic residence condition,^[27] with the added element that the carer must have no other premises they are entitled to occupy as a home.

George is an elderly and frail sole contract-holder of a housing association flat. Henry, his neighbour, moves in with George to care for him. On doing so, Henry has to give up the flat he had been renting from the housing association (as the occupation contract contained a term requiring Henry to occupy it as his only or principal home). On George's death, 15 months later, Henry is a reserve successor to the contract of George's flat. There could be no more successions to the contract on Henry's death.

EXCLUSIONS

7.26      Two classes of person cannot be a successor:

(1) a person who has not reached the age of 16 on the date the contract-holder died;^[28] and

(2) a person who has occupied under a sub-occupation contract in the twelve months before the contract-holder's death.^[29]

A person who has occupied under a sub-occupation contract can be a successor if they are a priority or reserve successor who is the contract-holder's spouse or civil partner (or lives with the contract-holder as if they were husband and wife or civil partners), and the sub-occupation contract ended before the contract-holder's death.^[30] More than one qualified successor

7.27      It may well happen that more than one person comes within the definition of priority or reserve successor.^[31] In this case the following rules apply.

(1) If there is only one priority successor, that person succeeds.^[32]

(2) If there are two or more priority successors, they can agree who the new contract-holder(s) shall be. If they cannot agree, or do not notify the landlord of an agreement within a reasonable time, the landlord selects the new contract-holder(s).^[33]

(3) If all those qualified are reserve successors, they can agree who the new contract-holder(s) shall be. If they cannot agree, or do not notify the landlord of an agreement within a reasonable time, the landlord selects the new contract-holder(s).^[34]

Where the landlord has made a selection, those not accepted may appeal to the court within four weeks from the date of the selection.^[35] The court must determine the appeal on the merits and not simply by way of review.^[36] Effect of succession

7.28      A successor who was the only person qualified to succeed, or the only priority successor (where the other persons qualified to succeed were reserve successors), becomes entitled to the rights and subject to the obligations under the contract, from the relevant date.^[37] A new contract-holder selected by agreement among the qualified successors or by the landlord becomes entitled to the rights and subject to the obligations under the contract from either the relevant date, or the day of the agreement or landlord's selection, whichever is later.^[38]

7.29      We have decided to make succession automatic where there is a single successor to improve certainty for all parties and because we felt it would deal most easily and efficiently with the overwhelming majority of situations. However, we recognise that there may be problems with automatically vesting the contract: the potential successor may not wish to become a contract-holder; there may be more than one potential successor and they may not wish to take on the contract jointly; or the priority successor may not wish to become a contract-holder whilst a potential reserve successor does. In the first of these cases, the successor can terminate the contract if they do not wish to be bound by it. We have provided mechanisms to deal with the other two potential difficulties.

7.30      Where a person succeeds to the contract because they were the only priority successor, and within six months from the contract-holder's death decides to end the contract, the other persons qualified to succeed the original contract-holder are given an opportunity to succeed.^[39] The landlord who receives a notice from the successor that they want to end the contract, or agrees with the successor to end the contract, is required to give notice to other occupiers of the premises and to any potential successors whose address the landlord knows.^[40] The same rules governing who actually succeeds where there are several persons qualified to succeed apply, save that the person who did succeed first time round (and no longer wants to be the contract holder) is treated as if they were not qualified to succeed.^[41] In this case the "relevant date" is the date on which the contract would otherwise have ended under the original successor's notice or agreement with the landlord to end the contract.^[42]

THE TRANSFER OF FIXED TERM STANDARD CONTRACTS

7.31      A fixed term standard contract may provide that, on the death of a sole contract-holder, the contract may be transferred to another person in the course of the administration of the estate.^[43]

7.32      A fixed term standard contract may also provide that, on the death of a joint contract-holder, the contract may be transferred to another person in the course of the administration of the estate.^[44] In this situation, therefore, although the principle of survivorship may apply by default, it need not do so if other arrangements have been made.

7.33      Where a joint contract-holder wants to make other arrangements, however, the contract must also provide that, before their death, the joint contract-holder gives notice to the other joint contract-holders that such a transfer will be made.^[45] The contract must also provide that the transferee is not entitled to occupy the premises without the consent of the other joint contract-holders.^[46]

THE ESTATE MANAGEMENT GROUND FOR POSSESSION

7.34      Whilst concerned to produce a modern system of succession rights, we must also take account of the need for social landlords to be able to use their housing stock efficiently and for the social purposes for which it was provided. We therefore recommend that social landlords should have available to them a ground for seeking possession based on under-occupation of the home following the death of the contract-holder (ground G in schedule 6 to the Bill). The ground is based on the current ground 16 of schedule 2 to the Housing Act 1985. It is only available where the successor is not a priority successor.

7.35      Proceedings, including the giving of notice of intention to take proceedings, cannot be commenced until six months after the death of the original contract-holder. Proceedings have to be started no later than 12 months after that date.^[47] Thus a relatively limited window of opportunity is created for landlords wanting to use this ground. The court must determine that it is reasonable to make the order sought. In addition, the social landlord is required to ensure that suitable alternative accommodation is provided.^[48]

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Note 1    Survivorship is discussed in Parts 11 and 14 of Renting Homes (2003) Law Com No 284.    [Back]

Note 2    The same principle applies where a joint contract-holder does not die but leaves the contract.    [Back]

Note 3    Cl 111(1). Cls 131 to 139 provide for transfers: see paras 6.36 to 6.60 and 6.74 to 6.76 above.    [Back]

Note 4    Cl 111(2).    [Back]

Note 5    Cl 111(3).    [Back]

Note 6    Cl 111(4).     [Back]

Note 7    Succession rights are discussed in Part 14 of Renting Homes (2003) Law Com No 284.    [Back]

Note 8    Save fixed term standard contracts with their own terms allowing the transfer of the contract on death: see below, at paras 7.31 to 7.33.    [Back]

Note 9    Discussed above, at paras 7.4 to 7.7.    [Back]

Note 10    See cls 133 and 136 discussed below, at paras 7.31 to 7.33.    [Back]

Note 11    Cl 141(2). See below where more than one person qualifies to succeed, at para 7.27.    [Back]

Note 12    Cl 142(1)(a).    [Back]

Note 13    This is the effect of cl 142(1)(a).    [Back]

Note 14    Cl 142(2).    [Back]

Note 15    Defined by cls 230(1)(a) and (b) as: spouse, or civil partner, or persons living together as husband and wife, or as civil partners.    [Back]

Note 16    Cl 144(1).    [Back]

Note 17    Cl 144(2).    [Back]

Note 18    See below, at para 7.23.    [Back]

Note 19    Cl 145(1).    [Back]

Note 20    Defined by cl 230.    [Back]

Note 21    Cl 145(4).    [Back]

Note 22    Cl 145(3).    [Back]

Note 23    Cl 145(4).    [Back]

Note 24    A carer is a person who provides or intends to provide a substantial amount of care for another on a regular basis, but does not provide the care, nor will provide the care because of a contract of employment or any other contract: cl 146(5). The mere fact that the carer is provided with board and lodging does not mean the person provides care because of a contract: cl 146(6).    [Back]

Note 25    Cl 146(1).    [Back]

Note 26    Cl 146(2).    [Back]

Note 27    Cl 146(4). The basic residence condition is discussed above, at para 7.22.    [Back]

Note 28    Cl 142(3).    [Back]

Note 29    Cl 142(4).    [Back]

Note 30    Cl 142(5).    [Back]

Note 31    Cl 143(1).    [Back]

Note 32    Cl 143(2).    [Back]

Note 33    Cl 143(3).    [Back]

Note 34    Cl 143(4).    [Back]

Note 35    Cls 143(5) to (7).    [Back]

Note 36    Cl 143(8).    [Back]

Note 37    Cl 147(1). The relevant date is the day on which the contract would have ended under clause 159 if no-one had been qualified to succeed. The date the contract would have ended if no-one had been qualified to succeed is one month after the contract-holder’s death, or if earlier, the date when the landlord was notified of the contract-holder’s death by authorised persons.    [Back]

Note 38    Cl 147(2).    [Back]

Note 39    Cl 148.    [Back]

Note 40    Cl 150.    [Back]

Note 41    Cls 148(3) to (5).    [Back]

Note 42    Cl 149(3).    [Back]

Note 43    Cl 133(1). In such a case, the normal rules in cl 159 on what happens on the death of the contract-holder do not apply: cl 133(3). Further, the rules on succession (see above, at paras 7.8 to 7.30, and cl 141) do not apply: cl 133(2).    [Back]

Note 44    Cl 136(1).    [Back]

Note 45    Cl 136(2).    [Back]

Note 46    Cl 136(3).    [Back]

Note 47    Cl 186(4).    [Back]

Note 48    The ground is discussed in more detail above: paras 4.82(1) and 5.42(1).    [Back]

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