The Law Commission

APPENDIX A

RECOMMENDATIONS FOR SUPPLEMENTARY TERMS AND OTHER MATTERS

INTRODUCTION

A.1      In the main body of this Report, we make clear that our Bill sets out the fundamental provisions that must be included, with or without modification, as fundamental terms in the agreement. These fundamental terms largely reflect existing housing rights and obligations found in the current law, but adapted to the Rented Homes scheme.

A.2      These rights do not, however, deal with all the issues that would be expected to be dealt with in an occupation contract. We therefore recommended that a list of supplementary provisions should be prescribed in regulations which would be incorporated as supplementary terms in the agreement. Indeed, in order to ensure that the illustrative model contracts we have provided with this Report look realistic, we have incorporated into them a number of what we would expect to see as supplementary terms.

A.3      Some supplementary terms we positively propose as part of our final recommendations. These are terms where we have considered the substance of the terms and come to a definite conclusion as to what they should be. Others will simply be the "normal" terms one would expect to find in a well drafted agreement. These will be arrived at by the appropriate authority after proper consultation with representatives of the relevant interested parties. However, because both categories are formally and legally the same, it is not possible to distinguish in our illustrative model contracts which terms fall into which category. The tables that follow set out the supplementary terms which we are specifically recommending. They are specified by reference to the term in the illustrative model contracts, where there is one.

SUPPLEMENTARY TERMS Recommended supplementary terms for all occupation contracts

A.4      We recommend the following supplementary terms for all occupation contracts.

Recommended term(s)	Illustrative model secure contract	Illustrative model periodic standard contract
Terms dealing with the extent to which the landlord has the right to enter the premises.	terms 27 to 30, 33 to 34	terms 25 to 28, 31 to 32
The occupier may control who else occupies the premises on a non-contractual basis.	term 35	term 33
The occupier may not breach the statutory rules on overcrowding. This means Part X of the Housing Act 1985, also s 324.	term 36	term 34
Terms covering occupiers' responsibilities, such as occupiers' obligations relating to repairs, adapted versions of the duty to act in a tenant-like manner, and to report disrepair.	term 37	term 35
Landlord's right to carry out repairs at the contract-holder's expense where the contract-holder has failed to take care of the premises.	term 38	term 36
The landlord has a veto on the making of any sub-occupation contract.	term 75	term 78
The landlord may impose conditions on their consent to a sub-occupation contract.	term 75	term 78
A contract-holder can only grant a sub-occupation contract that is a periodic standard contract.	term 75	term 78
The landlord has the right to veto any request by a contractual occupier to transfer their rights to occupy to another, except in the case of transfer to a potential successor or transfer by way of exchange of a secure contract.	term 82	term 79

Recommended supplementary terms for all periodic occupation contracts

A.5      In addition, we recommend the following supplementary terms for all periodic occupation contracts.

Recommended term(s)	Illustrative model secure contract	Illustrative model periodic standard contract
When a periodic occupation contract ends, the landlord will refund the appropriate proportion of any pre-paid rent or other charges.	term 110	term 110
Where the occupier gives notice to terminate the agreement, the minimum notice a landlord can expect from a contract-holder is one calendar month.	term 115	term 115

Recommended supplementary terms for secure contracts

A.6      Furthermore, we recommend the following supplementary term for secure contracts.

Recommended term(s)	Illustrative model secure contract
The contract-holder must occupy the premises as their only or principal home during the whole of the life of the contract. If there are joint contract-holders, at least one of them must occupy the premises as their only or principal home.	term 21

Recommended supplementary terms for standard contracts

A.7      We also recommend the following supplementary terms for standard contracts.

Recommended term(s)	Illustrative model periodic standard contract
The landlord has a veto over improvements proposed by the occupier.	terms 64 to 65
The occupier may take in a lodger subject to the consent of the landlord.	term 77
Term making provision for what happens to deposits and guarantors in the event of a transfer.	term 80

Recommended supplementary terms for fixed term standard contracts

A.8      We also recommend the following supplementary term for fixed term standard contracts.

If the contract contains a break clause, where only one of two or more joint contract-holders invokes the break clause, it will terminate only the interests in and rights under the agreement of that occupier, and not those of the other joint contract-holders.

OTHER MATTERS Statutory Instruments relating to the model contracts

A.9      To avoid the unnecessary proliferation of model contracts, we recommend that there should be as few model contracts as possible. There should at least be one for secure contracts, one for periodic standard contracts and one for fixed term standard contracts.

A.10      We also recommend that a specific model contract be prescribed for supported housing and for prohibited conduct standard contracts.

A.11      The guidance booklet to be published by the appropriate authority with the model contracts should make it clear that all landlords will be able to enhance their occupation contracts in favour of the contract-holder. This guidance booklet (unlike the explanatory notes on the face of the model contracts) will not be statutory.

A.12      We recommend that the statutory instrument which provides for the model contracts, should also contain requirements as to the layout of the contracts, to ensure that it is as user-friendly as possible.

A.13      Information should be provided on the following matters:

(1) ensuring that the contract-holder is alerted to the landlord's other major duties such as the gas and fire safety statutory requirements, which should continue to operate outside the Bill. These provisions will be summarised in the guidance booklet to accompany the contract;

(2) explaining the effect of the fundamental term granting the landlord access to the premises to inspect and carry out repairs^[1] on section 4 of the Defective Premises Act 1972, and the effect of that Act on the term's requirement for notice;

(3) providing brief information about the statutory small repairs procedure ("right to repair");

(4) alerting the contract-holder to the effect of section 27 of the Housing Act 1988 (statutory tort for unlawful eviction or harassment);

(5) alerting the contract-holder to check whether provisions on service and administration charges in the Landlord and Tenant Act 1985 apply;

(6) explaining the mandatory grounds for possession (such as for serious rent arrears) and discretionary grounds;

(7) explaining that the making of unauthorised transactions could result in possession proceedings being taken.

CHANGES TO CIVIL PROCEDURE RULES

A.14      We 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 (see Civil Procedure Rules, rules 55.11 to 55.19).^[2]

A.15      Rules of court will need to be made under clause 231(3) in relation to cases affected by the pilot schemes for rent arrears.

A.16      The Civil Procedure Rules should be amended to provide that:

(1) non-contractual occupants are notified of any proceedings being brought in relation to the premises in which they are living;^[3] and

(2) any person on whom a notice is served under these provisions, and who does not have home rights, may at the court's discretion be joined in the proceedings where the court has a discretion about granting possession.^[4]

A.17      The Civil Procedure Rules should provide that notice of possession proceedings must be served on permitted occupiers over 16. However, in respect of any occupants of whom the landlord has no specific knowledge, a notice addressed to the other occupant(s) delivered at or posted up at the property should suffice.^[5]

A.18      The Civil Procedure Rules should be amended to provide that if the head landlord has given consent to a sub-occupation contract, or has included a term in the contract allowing a sub-occupation contract to be made without consent, then if the head landlord brings proceedings for possession against the original occupier (A) or if the landlord uses the abandonment procedure, the head landlord must serve notice on the sub-occupier (B), who should be entitled to be joined in the action.^[6]

CHANGES TO LEGISLATION

A.19      Although the draft Bill does not contain a schedule of repeals, we anticipate that the following changes and repeals will be needed.

(1) Amendments to ensure that family property orders (defined in clause 237) were available in relation to occupation contracts, for example to:

(b) section 30 of the Family Law Act 1996 to refer to contract-holders under the new scheme;^[7]

(c) schedule 7 to the Family Law Act 1996 to allow courts to make orders for occupation contracts, as they can be made in relation to existing tenancies.

(2) Repeal legislation that deals with the legal status of tenants of residential occupation, most importantly:

(d) the bulk of part 1 of the Housing Act 1988 (assured and assured shorthold tenancies);

(e) most of part 4 of the Housing Act 1985 (secure tenancies); and

(f) chapters 1 and 1A of part 5 of the Housing Act 1996 (introductory tenancies and demoted tenancies);^[8]

(g) parts 1 and 7 of the Rent Act 1977, which deal with the definition of tenants protected by the Rent Acts and their security of tenure, if an order was made under clause 221 abolishing protected and statutory tenants.^[9] Parts 3, 4, 5 and 8 may also need repeal.

(3) Repeals of the law on rent books, Landlord and Tenant Act 1985, sections 4 to 7.^[10]

(4) Excluding occupation contracts from the scope of section 89(1) of the Housing Act 1980.^[11]

(5) Excluding occupation contracts from the scope of section 11 of the Landlord and Tenant Act 1985.

(6) Amendment of sections 3 and 5 of the Protection from Eviction Act 1977 and repeal of sections 3A and 8.

A.20      The gas and electrical appliance safety standards should continue to be set out in their own regulations.^[12]

MISCELLANEOUS

A.21      If the recommendation on the abolition of the six month moratorium is accepted, we suggest that the Department for Work and Pensions might consider whether a new letting should be required to be on a six month fixed term standard contract to qualify for housing benefit.^[13]


 


APPENDIX B ILLUSTRATIVE PERIODIC STANDARD CONTRACT AND ILLUSTRATIVE SECURE CONTRACT

Note 1   See term 29 of the draft standard contract in Appendix B to this Report.     [Back]

Note 2   Renting Homes (2003) Law Com No 284, paras 3.33 and 9.100.    [Back]

Note 3   Renting Homes (2003) Law Com No 284, paras 3.65 and 9.54.    [Back]

Note 4   Renting Homes (2003) Law Com No 284, paras 9.55 and 10.79.    [Back]

Note 5   Renting Homes (2003) Law Com No 284, para 10.78.    [Back]

Note 6   Renting Homes (2003) Law Com No 284, para 12.19.    [Back]

Note 7   Renting Homes (2003) Law Com No 284, para 11.43.    [Back]

Note 8   Renting Homes (2003) Law Com No 284, para 6.50.    [Back]

Note 9   Renting Homes (2003) Law Com No 284, para 6.52.    [Back]

Note 10   Renting Homes (2003) Law Com No 284, para 3.25 and Part 7, n 17.    [Back]

Note 11   Renting Homes (2003) Law Com No 284, para 9.99.    [Back]

Note 12   Renting Homes (2003) Law Com No 284, para 8.121.    [Back]

Note 13   Renting Homes (2003) Law Com No 284, para 6.16.    [Back]

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