Localism Act 2011 – Changes in Social Housing Tenure
(A). … A Step in the Right Direction?
In this legislation, there is recognition by the Government that a social housing tenancy should not be ‘for life’ and that tenants’ circumstances change, both financially and in family make-up.
Some would say that such ‘recognition’ is long overdue, as often social housing is allocated in times of crisis but tenants continue to live in the property long after their housing need has passed. Meanwhile, housing waiting lists (circa 1.8m people) continue to grow with people and families with an immediate housing need. This is unfair and does not make the best use of a public resource, particularly in the context of the reduction in housing stock.
There is also a conflicting view as to the success of schemes which incentivise tenants to move both within and across tenures voluntarily.
So, are the changes brought about by the Localism Act a step in the right direction? In my view on balance they are but a first step only.
I say this as the legislation does not address the historic problem, (and the similar problem which exists in shared ownership) as the Government has protected the security and rights of existing social housing tenants.
The new provisions of the Localism Act allow for more flexible arrangements with people being allocated social housing in the future, (for tenancies granted after 6 April 2012), the key feature of which is the ability to grant fixed or flexible tenancies, with a mandatory right to possession at the end of the term.
Bodies, such as the Citizens Advice Bureau, objected to the changes to social housing tenure as a result of the shift in the balance of power from tenants in favour of landlords. It was suggested that it is misleading to describe a social housing tenancy as a ‘tenancy for life’, when the average length of occupation for a social housing property is only 7 years.
It was also suggested that the downgrading of tenants’ security of tenure will have a discouraging effect on tenants treatment of their properties, (arguably tenants will no longer seek to make improvements and undertake minor repairs), and toward contributing to the local community.
It is said that the changes will mitigate against the spirit of localism.
(B). Key Tenure Changes
For local authorities, the key changes are:
i. the ability to grant ‘flexible’ secure tenancies;
ii. a flexible tenancy must be granted for a term of at least 2 years;
- a recommended term is 5 years; and
- when the fixed term has expired, the local authority is entitled to possession on a mandatory basis.
To grant a flexible tenancy, a local authority must serve a written notice on a tenant before the tenancy starts (or if it is an introductory tenancy, before the introductory tenancy starts), which must confirm that it is to be a flexible tenancy, the length of its term and the other terms of the tenancy.
After receiving this notice, the tenant has a limited right of review – he/she can only ask the local authority to re-consider whether the length of the tenancy term is in line with the local authority’s policy.
The tenant is required to make such a request within 21 days of his receipt of the notice.
A flexible tenant has the right to terminate his tenancy by giving written notice to the local authority specifying a termination date in more than 4 weeks time. However, this termination cannot take effect if: (1) the tenant is in arrears of rent, or (2) the tenant is material breach of his tenancy.
Local authorities obviously continue to benefit from the Schedule 2, Housing Act 1985 grounds of possession. In addition, they have a further mandatory ground available if they can satisfy three conditions:
(a). the flexible tenancy has come to an end;
(b). the local authority has served a six-month written notice stating that another tenancy will not be granted; and
(c). the local authority has served a two-month written notice requiring possession.
At present, it is unclear as to whether the mandatory right to possession will be lost, if the flexible tenancy has come to an end and a statutory periodic tenancy has arisen before the notices has been served and expired.
The tenant has a right to review of the local authority’s decision not to grant another tenancy. The right arises on the tenant’s receipt of the six-month notice and must be requested within 21 days.
The review must re-consider whether the decision is in line with the local authority’s policy but must also address wider issues, as laid down by the Secretary of State and further, issues of Human Rights and proportionality.
For Housing Associations, the key changes are:
HA’s are expected to:
i. to publish clear and accessible policies outlining the HAs approach to tenancy management;
ii. granting general needs tenants – (a). periodic assured (not an AST) tenancy, or (b). a tenancy for a minimum fixed term of 5 years (or exceptionally 2 years) in addition to any period of probation ;
- giving written notice before the fixed term ends stating whether the HA proposes to grant another tenancy or to end the tenancy;
- restricting the use of probationary tenancies to 12 months, extendable to a maximum of 18 months on giving reasons and the right to a review of that decision;
- offering advice and assistance to tenants on fixed terms whwere no new tenancy will be granted.
The Localism Act gives effect to a number of these expectations by amending section 21 of the Housing Act 1988.
A HA must give the tenant not less than six months notice stating: (1) That the HA does not propose to grant another tenancy on the expiry of the fixed term, and (2) How the tenant can get help and advice about the notice and of any obligation on the HA to provide help and advice.
Unless the HA has served this 6 month notice (as well as the standard section 21 notice requiring possession) the Court may not make a possession order.
Other key points to note:
Local Authorities must publish a non-binding “tenancy strategy” to steer policy making by all social housing providers within its authority area. The deadline for this is 15 January 2013, to allow for consultation with other social housing providers.
Landlord and Tenant 1985, section 11, landlord repair obligations, have been extended to fixed terms of more than 7 years (excluding shared ownership).
Changes have been made to succession to both Local Authority and Housing Association tenancies and encourage mutual exchanges.