On 9 April 2013, the Law Commission published Renting Homes in Wales recommending reforms to the legal framework governing rented housing in Wales. At the core of the report’s recommendations is the creation of a simplified statutory framework that will:
- Reduce to two the number of different tenancy types for renting accommodation: the secure contract (social housing) and the standard contract (private sector rentals).
- Provide model contracts that will set out in clear terms the basis on which individuals occupy rented housing and explain the circumstances in which their right to occupy that accommodation may be terminated.
The recommendations that are proposed in relation to private sector rentals are not discussed in this post.
Background
The reforms set out in the report are based on recommendations made by the Law Commission in 2006 for both England and Wales (see Legal update, Law Commission’s final report on proposals for a new scheme to cover the home rental market). Unlike Westminster (which rejected the proposals on the basis that its housing policy priorities at that stage were focused on extending owner occupation rather than reforming residential renting) the Welsh Government accepted the proposals and asked the Law Commission to review and update its recommendations for the reform of residential renting in Wales.
The recommendations
The scope of the scheme that is proposed in the report’s recommendations means that:
- All tenancies and licences to occupy a home will be occupation contracts unless the arrangements are specifically excluded in Part 2 of Schedule 1 of the draft Bill annexed to the 2006 report.(Exclusions include long tenancies of more than 21 years, agricultural tenancies and Rent Act tenancies.)
- The two main existing statutory regimes will be replaced. These are secure tenancy regime in the Housing Act 1985 (HA 1985) and the assured regime in the Housing Act 1988 (HA 1988) (together with ancillary statutory tenancy types like introductory and demoted tenancies).
- Welsh Ministers will issue uniform contracts that clearly set out the rights and responsibilities of landlords and tenants and the circumstances under which either the landlord or the tenant can terminate the contract.
The contracts
Social housing is provided by local authorities and housing associations. However, the relationship between housing associations and their tenants is currently governed by the laws that apply to the private sector (the assured tenancy regime under the HA 1988). What differentiates the contract of a housing association tenant from a local authority housing tenant under the HA 1985 is the greater security that the latter enjoys, given that:
- Their contract can only be terminated by the local authority if the tenant is in breach of the terms of the agreement and the court determines that eviction of the tenant is reasonable and proportionate.
- There is scope for a family member to succeed to the tenancy.
Therefore, in order to protect the status of existing social housing tenants, the report proposes that new secure contracts will not permit housing association landlords to automatically evict occupiers if they fall into serious arrears. This means Ground 8, one of the mandatory grounds for possession of an assured tenancy contained in Schedule 2 of the HA 1988, will be abolished. Instead, housing association landlords will have to apply to the courts in the same way that local authority landlords are required to. Despite housing associations expressing concerns over abolishing Ground 8, the Law Commission stands by it recommendation to do so on the basis that:
- Security is a hallmark of social lettings and it is entirely appropriate for a judge to oversee the eviction of tenants from the social housing sector. The lack of mandatory grounds for eviction of a social housing tenant will distinguish the secure contract for social housing from the standard contract for private sector rentals.
- Where the landlord is a public body, it is essential for a judge to oversee a secure tenant’s eviction given the developing jurisprudence in connection with Article 8 of the European Convention on Human Rights which make it clear that a person at risk of eviction is entitled to have the question of whether the eviction is a proportionate means of achieving a legitimate aim considered by an independent tribunal. For a discussion of the developing case law, see Practice note, Article 8 of the ECHR: right to respect for private and family life: Housing.
- Ground 8 of the HA 1988 is available as a mandatory ground for possession only in a small proportion of social housing rentals in Wales and the available figures suggest that it is not often used by housing association landlords.
- The Law Commission considers that compliance with the pre-action protocol on rent arrears in social housing (see Practice note, Pre-action protocol for possession claims based on rent arrears) and the judicial training that will accompany the new regime means that the outcomes of possession proceedings based upon rent arrears will become more predictable.
Succession provisions in secure contracts
The Law Commission in its final 2006 report concluded that the rules on succession were too restrictive. The succession provisions for local authority tenants set out in sections 87 and 88 of the HA 1985 allow for one succession (which may to be a surviving spouse or civil partner or to a member of the deceased tenant’s family). In practice, this means that it is rare for a member of a secure tenant’s family to succeed to the tenancy, given that a succession as a consequence of the death of a joint tenant counts as a succession under sections 160 and 161 of the HA 1985. Therefore, the report recommends extending succession rights so that:
- If there is a joint contract, the surviving spouse or partner will succeed to the tenancy through the operation of the survivorship principle.
- If there is no joint contract, the surviving spouse or partner will have a statutory right of succession in priority to any other potential successor (and would be referred to as a “priority successor”). If there is no surviving spouse or partner, then the right to succeed will pass to a wider circle of family members and carers (“reserve successors”). However, in order to be a reserve successor, the individual must occupy the home as their only or principal home at the time of the contract holder’s death through a 12-month period ending with the contract holder’s death. Further, a carer cannot succeed if they are entitled to occupy any other premises as a home.
It has been suggested that an individual who is subject to an anti-social behaviour order or an anti-social behaviour injunction should be prevented from being a reserve successor. The Law Commission has indicated that it would be straightforward to amend its recommended statutory rules to reflect this.
Conclusion
It will be interesting to see whether the Welsh Government implements the Law Commission’s recommendations for reforming social housing rental in Wales. If it does so, it will be comforted to know that the Law Commission’s proposals have been informed by the reforms to social housing law in Scotland. The Housing (Scotland) Act 2001 introduced a single tenancy for the majority of its public sector tenants regardless of whether the landlord was a local authority or a housing association.
It is now expected that the report will inform a White Paper to be issued shortly for consultation by the Welsh Government and that, if the proposals are implemented, legislation in the National Assembly will follow in 2014.