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A brief analysis — Part II

Legal

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by Delyth Williams

On the coming into force of the 1988 Act a private sector tenancy granted on or after that date will, save in exceptional circumstances, not be a protected tenancy under the Rent Act 1977. These provisions are very complex and the practitioner must make full reference to the 1988 Act before commencing on any course of action. The exceptional circumstances encompass a tenancy which, inter alia,

  1. is entered into pursuant to a contract entered into before the commencement of the 1988 Act, or
  2. is granted to a person who immediately before the tenancy was granted was a protected or statutory tenant and it is granted by the same landlord.

Phasing out of the Rent Acts

Detailed provisions in section 34 (c)(i), (ii), (iii) and (d) deal with the position where an order for possession has been granted on certain grounds prior to the grant of the tenancy. Further, a tenancy granted by a housing association, a housing co-operative or the Housing Corporation will, save in exceptional circumstances, not be a housing association tenancy. Only in very limited cases will it be possible to grant a secure tenancy, and new restricted contracts of furnished lettings are limited to transitional cases. No further assured tenancies under the Housing Act 1980 can be granted and all existing assured tenancies, save in very limited circumstances, become assured tenancies under the 1988 Act.

The rules as to statutory succession under the Rent Act 1977 are changed in a number of ways by section 39 and Schedule 4. The provisions are complex because where the death is that of the original tenant Part I of Schedule 1 to the Rent Act 1977 has effect subject to the amendments in Part I of Schedule 4 to the 1988 Act, but if it is the first successor who dies Part I of Schedule 1 to the 1977 Act has effect subject to the amendments in paras 5 to 9 only of Part I of Schedule 4 to the 1988 Act. Subject to many qualifications, the two basic changes are, inter alia,

  1. a member of the tenant’s family must satisfy a two-year residence test instead of the former six months and
  2. where a member of the family succeeds, the successor obtains an assured tenancy.

It is important to note that the protection afforded to protected, secure, housing association and agricultural tenancies entered into on or before, or pursuant to a contract made before, January 15 1989 is unaffected by the 1988 Act until some event occurs, such as the death of the tenant.

Changes in housing associations and housing action trusts

The main changes affecting housing associations, not covered in other Parts of the 1988 Act, are contained in Part II, which encompasses sections 46 to 59. A body known as “Housing for Wales” is to take over the functions and role of the Housing Corporation in Wales, and all property in Wales held by the Housing Corporation is vested in Housing for Wales: section 46. By virtue of section 48, section 4(3), (4) is substituted into the Housing Associations Act 1985, thus widening the permissible purposes, objects or powers of housing associations. The remaining sections of Part II of the 1988 Act deal with the following:

  1. powers of guidance as to management of accommodation by registered housing associations; section 49;
  2. the functions of the Housing Corporation and Secretary of State as to grant aid: sections 50-54;
  3. miscellaneous matters: sections 56-59.

Section 60 of the 1988 Act gives the Secretary of State power to designate a housing action trust area for which it is expedient that a housing action trust should be established. In determining whether to designate such an area the Secretary of State shall have regard to such matters as he thinks fit but may have regard to the following factors (section 60 (5)):

  1. the extent to which the housing accommodation in the area as a whole is occupied by tenants or owner-occupiers and the extent to which it is local authority housing;
  2. the physical state and design of the housing accommodation in the area and any need to repair or improve it;
  3. the way in which the local authority housing in the area is being managed; and
  4. the living conditions of those who live in the area and the social conditions and general environment of the area.

Before making a designation order the Secretary of State must consult every local housing authority any part of whose district is to be included in the proposed area and must arrange a ballot or poll of the tenants in the area. If a majority of the tenants is opposed to the making of the designation order, the Secretary of State shall not make the order: section 61(4).

The primary objects of a housing action trust in relation to the designated area for which it is established are (section 63(1)):

  1. to secure the repair or improvement of housing accommodation for the time being held by the trust;
  2. to secure the proper and effective management and use of that housing accommodation;
  3. to encourage diversity in the interests by virtue of which housing accommodation in the area is occupied and, in the case of accommodation which is occupied under tenancies, diversity in the identity of the landlords; and
  4. generally to secure or facilitate the improvement of living conditions in the area and the social conditions and general environment of the area.

As soon as practicable after a housing action trust has been established for a designated area, the trust shall prepare a statement of its proposals with regard to the exercise of its functions in the area: section 64(1). If the Secretary of State so provides in the order, the housing action trust shall be the local planning authority for the whole or any part of the area for the purposes of Part III of the Town and Country Planning Act 1971 and in relation to such other kinds of development as specified in the order. In general, the Secretary of State may designate that the housing action trust has such of the following functions as designated, namely, inter alia:

  1. the functions conferred on a local housing authority by Parts II, VI, VII and IX to XII and XVI of the Housing Act 1985;
  2. the functions conferred by Part II of the Housing Associations Act 1985 on a local authority; and
  3. the functions conferred by sections 39 to 41 of the Land Compensation Act 1973 on the relevant authority.

The Secretary of State may provide for the transfer from a local housing authority to a housing action trust of all or any of the authority’s local authority housing situated in the designated area and any other land held or provided in connection with that local authority housing: section 74. Under section 85 a housing action trust may make such reasonable charge as it may determine for the tenancy or occupation of housing accommodation for the time being held by it. It is to be noted that the detail of the housing action trust scheme is contained in sections 60 to 92 and is too complex to be able to offer more than a brief summary in this article.

Change of landlord: secure tenants

Part IV of the 1988 Act contains provisions conferring on any person who has been approved under section 94 the right to acquire from a public sector landlord the fee simple estate in any buildings each of which comprises or contains one or more dwelling-houses which on the relevant date are occupied by qualifying tenants of the public sector landlord.

This right is not exercisable except by a person who is approved by the Housing Corporation and neither a public sector landlord nor a county council can be an approved person. The application claiming to exercise the right is made to the public sector landlord concerned and within four weeks from the relevant date the landlord must serve on the applicant a notice specifying the name and address of every tenant or licensee of a dwelling-house which the buildings proposed to be acquired comprise or contain. As from four weeks after that date the applicant has, for example, a right to have sight of any document relevant to the proposed transaction in the possession of the landlord. Within 12 weeks of the relevant date the landlord must serve on the applicant a notice stating which property should be excluded from the acquisition for various specified reasons and the applicant has a period of four weeks from the service of the notice within which to notify the landlord in writing of any matters that he does not accept: section 98.

Within eight weeks of the service of the section 98 notice (if there is no dispute as to those matters) or, if there is a dispute, the determination of the dispute, the landlord must serve on the applicant a notice specifying the price that he considers should be payable for the property acquired: section 99.

Subject to the provisions of section 100(3) (where in response to consultation the tenant gives notice of his wish to continue as a tenant of the landlord) and section 103(1) (making payments to the landlord on the occasion of any disposal), the price payable is that which would be realised if sold on the open market by a willing vendor on the following assumptions (section 99(2)):

  1. that it was sold subject to any tenancies subsisting on that date but otherwise with vacant possession;
  2. that it was to be conveyed with the same rights and subject to the same burdens as it would be in pursuance of the right of acquisition;
  3. that the only bidders in the market were persons who on that date either were approved under section 94 above or fulfilled the criteria for approval established under subsection (3) of that section;
  4. that the applicant would, within a reasonable period, carry out such works as are reasonably necessary to put the buildings included in the acquisition into the state of repair required by the landlord’s repairing obligations; and
  5. that the applicant would not be required to grant any leases in pursuance of regulations made under section 100 below.

Any dispute as to the matters contained in the section 99 notice are to be determined by the district valuer.

During the prescribed period the applicant must consult the qualifying tenants in accordance with such provisions as may be prescribed. The applicant cannot serve a notice of intention to proceed under section 103 if less than 50% of the tenants to whom section 102 applies have given notice of their wishes in such manner as may be prescribed or the number of tenants to whom section 102 applies who have given notice in that manner of their wish to continue as tenants of the landlord exceeds 50% of the total number of tenants to whom section 102 applies. The details of the scheme as to duty to complete and consequences on completion, consents required for subsequent disposals and so forth are contained in sections 104 to 114 and the various Schedules to the 1988 Act and the adviser should consult those provisions thoroughly when faced with issues raised by the 1988 Act.

Miscellaneous provisions

The 1988 Act makes numerous changes to various aspects of landlord and tenant law, housing law and aspects of the rent officer service in Part V and in other Parts of the Act. These changes are too numerous to consider in detail in an article of this nature, but they may be delineated as follows:

  1. Changes to strengthen the law providing protection from eviction including provisions for damages for unlawful eviction: Part IV, sections 27 to 33.
  2. Various changes to the rules on premiums on long leases, the implied repairing obligations under the Landlord and Tenant Act 1985 (discussed in greater detail in “Legal Notes” on January 7 at p 78) and operation of the Landlord and Tenant Act 1987: Part V, sections 115 to 119.
  3. The appointment of rent officers together with additional functions to be undertaken by rent officers: Part V, sections 120 and 121 and Schedule 14.
  4. Numerous amendments to the operation of the right-to-buy provisions, repair and improvement notices and rules on the disposals of housing stock: Part V, sections 122 to 136 and various Schedules.

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