What are the new grounds for possession of residential tenancies introduced by the Housing Act 1988?
As is well known by now (and has been reported elsewhere in Estates Gazette), the Housing Act 1988 received royal assent on November 15 1988. Part I of the Act (which deals with private sector rented accommodation) came into force on January 15 1989. Those private sector tenancies created on or after January 15 can be classified as follows.
(A more detailed discussion of the types of tenancy will be found in the article which appears at p 28 of last week’s issue.)
Rent Act 1977 not repealed
The Housing Act 1988 has not repealed the Rent Act 1977 (although it has repealed some provisions in it and has made various amendments to it). Existing protected tenancies have not been abolished, but it is the clear policy of the 1988 Act to phase them out.
As soon as a spouse, or other person, succeeds to a tenancy on the death of a protected or statutory tenant, the tenancy becomes an “assured tenancy” under the new Act and is no longer protected under the 1977 Act. A “spouse” for these purposes includes a person who was living with the deceased at the time of his (or her) death “as his or her wife or husband” (whether they were formally married or not). In the case of any other member of the family, he or she must have been residing with the protected tenant for the period of two years immediately before the death. This is an increase on the pre-existing period of six months, but there is a transitional provision to protect persons who have already been living with a protected or statutory tenant (as a member of his or her family) for six months up to January 15 1989. Any such person will be allowed to succeed to the tenancy (in the absence of a spouse) and to be given an assured tenancy under the new Act, even if the protected or statutory tenant dies before another 18 months have passed: Sched 4, para 3.
Although there is now, in principle, only one right to succeed to a tenancy on the death of a protected or statutory tenant, there is one harmless exception to this principle. If the protected of statutory tenant’s family consisted of two or more persons at the time of his or her death, one of whom succeeds to the tenancy (ie becomes an assured tenant) and thereafter dies, any other member of that same family who was living with the first successor at the time of that death may succeed to the assured tenancy. But this will be possible only if the person in question had been living with the first successor for the period of two years prior to his or her death (or may claim the protection of the transitional provision referred to above, by showing that he or she had been living with the first successor for the period of six months prior to January 15 1989 and up to the time of the death, however shortly afterwards it might have occurred).
No further successions are permitted, no matter how large the original tenant’s family was at the time of his or her death: Sched 4 para 6.
Assured tenancies
It is clear, therefore, that an assured tenancy may come into being in one of two broad ways: (1) it may be created by a landlord in favour of a tenant on or after January 15 1989; or (2) it may arise by virtue of a spouse (or some other person) succeeding to a pre-existing tenancy on or after January 15 1989. If the assured tenant is not himself (or herself) a successor to the original tenant, there will be one statutory right of succession. This right is given by section 17 and is limited to the tenant’s spouse (or quasi-spouse), provided he or she was occupying the dwelling-house as his or her only or principal home immediately prior to the original tenant’s death.
In all other circumstances it is possible for a person to inherit the assured tenancy under the will or intestacy of the original tenant (or even that of a successor tenant), but the landlord will then have one year in which he may successfully bring proceedings to recover possession of the dwelling from the new tenant: see below.
Schedule 2 to the Housing Act 1988 contains eight mandatory grounds for recovering possession from an assured tenant (or a “statutory periodic tenant”, if a fixed term assured tenancy has expired). These mandatory grounds are in Part I of the Schedule. The Schedule also contains a further eight discretionary grounds, which are in Part II of the Schedule. It should be remembered that none of these “grounds” will replace the existing “Cases” which constitute the grounds for obtaining (or seeking to obtain) possession in the case of a protected or statutory tenant under the Rent Act 1977. For so long as a tenancy remains a protected or statutory tenancy, the Rent Act 1977 will continue to provide the answer as to whether or not possession proceedings can successfully be brought. But, as has already been seen, these tenancies will not outlive the existing generation of tenants, and their successors (if any) will be assured tenants under the new Act.
Mandatory grounds
The mandatory grounds for possession are those where the court must make an order for possession in favour of the landlord. The only duty of the court is to decide whether it is “satisfied” that one or more of these grounds alleged by the landlord has been “established” on the balance of probabilities. The landlord is under a duty to serve a notice on the tenant indicating his intention to seek possession and indicating the ground (or grounds) on which he intends to do so. This applies both to mandatory and discretionary grounds, but, except in one case (see below), the court does have a power to dispense with the necessity of serving such a notice if it “considers it just and equitable” to do so: section 8(1):
The first mandatory ground (Ground 1) is an enlarged version of Cases 11 and 12 in the Rent Act 1977. If the landlord has served a notice at or before the beginning of the tenancy indicating that possession might be recovered under Ground 1, he may then recover possession in the following circumstances:
- if he (or any person who is joint landlord with him) occupied the dwelling-house as his only or principal home at “some time before the beginning of the tenancy” (ie at any time before the tenancy was created); or
- if he (or any person who is joint landlord with him) requires the dwelling-house as his only or principal home, or as the only or principal home of his spouse; or
- if some person who has derived title from the landlord who originally gave the notice, otherwise than by acquiring it for money or money’s worth, requires the dwelling-house as his only or principal home.
(Thus, for example, a child who has inherited the landlord’s interest, or who has received it as a gift, may claim possession, but a person who has bought the reversion may not.) As soon as the reversionary interest has been sold, the right to recover possession ceases, even if the purchaser then passes it on to another person as a gift or on his death. It should be noted, however, that if the landlord who gave the notice has previously occupied the house as his only or principal home, he may recover possession for any reason (eg because he wants to sell it with vacant possession).
Ground 2 deals with mortgages. It permits the landlord to recover possession if the mortgagee is entitled to exercise his power of sale and desires vacant possession in order to exercise that power. This applies only if the tenancy were granted after the mortgage (for, if it were otherwise, the mortgagee would have no right to vacant possession). In order to exercise this ground, the landlord should have served a notice on the tenant at (or before) the commencement of the tenancy, indicating that possession might be recovered from him.
It should be noted that, in both Ground 1 and Ground 2, the court has a discretion to dispense with the requirement of notification at or before the commencement of the tenancy if it considers it “just and equitable” to do so. Existing case law under the Rent Act 1977 indicates that this discretion will be very sparingly used in a “Ground 1” situation. In a “Ground 2” situation, the position is less clear. However, it is much more likely that a mortgagee will bring proceedings against both the landlord and the tenant to obtain vacant possession (relying upon his “title paramount”), rather than that a landlord will bring proceedings against his tenant under Ground 2.
Grounds 3, 4 and 5 are not new (they have their counterparts in the Rent Act 1977). Grounds 3 and 4 provide the reverse side to two types of letting which are outside statutory protection altogether. Because “holiday lettings” and “lettings to students” (by educational institutions) are excluded from the definition of an “assured tenancy” (see Schedule 1 to the 1988 Act), some leeway is granted to landlords to permit efficient use of such accommodation out of season, or when students are not to be found. Thus Case 3 allows a “holiday landlord” to recover possession from a person who is not on holiday, and Case 4 allows an educational institution to recover possession from a person who is not one of its students, provided that he (the tenant) was given notice from the start that possession might be recovered from him under the appropriate ground. Ground 5 deals with dwelling-houses occupied by ministers of religion (which, of course, includes non-Christian religions).
Ground 6 is a new ground. It covers works of demolition or reconstruction to the whole or a substantial part of the dwelling-house, or substantial works to the whole or any part of the dwelling-house (or the building which contains it). It therefore resembles the situation which is already well known in the law of business tenancies (see section 30(1)(f), Landlord and Tenant Act 1954). The landlord has to show that the work in question cannot reasonably be carried out without the tenant’s giving up possession and, of course, he must also show that his intention is a genuine one. Thus in Cunliffe v Goodman [0] 2 KB 237 (a case relating to the Landlord and Tenant Act 1927), Asquith LJ made the point that an “intention” connotes a decision on the part of the landlord, not a contemplation or a hope:
An “intention” to my mind connotes a state of affairs which the party intending — I will call him X — does more than merely contemplate: it connotes a state of affairs which, on the contrary, he decides, so far as in him lies, to bring about, and which, in point of possibility, he has a reasonable prospect of being able to bring about, by his own act of volition.
Notwithstanding this constraint, Ground 6 is clearly a powerful weapon in the hands of the landlord. For this reason there are a number of safeguards. First, the tenant must be offered a variation of the terms of his tenancy if such a variation is practicable and would permit the work to be carried out (eg by allowing access to the contractors). Second, the tenant must be offered an assured tenancy of part only of the dwelling-house if this is practicable and would permit the work to be carried out (eg by giving up the rooms which need to be demolished or reconstructed). Third, the landlord cannot rely on Ground 6 at all unless he acquired his interest in the dwelling before the tenancy was created or acquired that interest subsequently otherwise than by purchasing it for money or money’s worth. Therefore, the landlord must be the person who created the tenancy, or he must have inherited his reversionary interest from the original landlord or received it as a gift. (This therefore mimics the position in Case 1.)
Ground 7 deals with succession on death to assured tenancies (and the new “statutory periodic tenancies” — see above diagram). As has already been seen, statutory succession is possible (in favour of a spouse) under section 17 provided the deceased tenant was not himself a successor. In all other cases, it is possible for the tenancy to devolve on the tenant’s intestacy, or under his will, to some relative of his or to some other person. Ground 7 deals with this situation. If the tenancy is (or has become) a periodic tenancy, the landlord is given one year from the date of the death (or from the date on which he should reasonably have become aware of the death) to commence possession proceedings. In the meantime, he is permitted to accept rent from the new tenant without prejudicing his right to recover possession (unless he agrees in writing to a change in the amount of the rent, the period of the tenancy, the premises to be let, or any other term of the tenancy).
Ground 8 deals with a prolonged failure to pay rent. If at the date of the landlord’s notice and also at the date of the hearing the tenant has not paid the lawful rent for 13 weeks (in the case of a weekly or fortnightly tenancy — three months otherwise), the landlord will be entitled to possession. (In this case, the court has no power to dispense with the requirement under section 8 (that the landlord must serve a notice of his intention to commence proceedings, together with the grounds).) As with all the mandatory grounds for possession, the court has no power here to suspend the operation of such a possession order (eg to allow the tenant extra time to pay the arrears): section 9(6).
Discretionary grounds
Part II of Schedule 2 contains eight further grounds where the court “may make an order for possession if it considers it reasonable to do so”.
Ground 9 deals with the landlord’s offer of “suitable alternative accommodation” (this is supplemented by Part III of Schedule 2). Ground 10 deals with arrears of rent which are not sufficiently great to amount to mandatory grounds (under Ground 8). Ground 11 deals with persistent delays on the part of the tenant to pay the rent (even if he was not actually in arrears with his rent at the time when the proceedings were commenced). Ground 12 deals with other obligations of the tenancy which the tenant has broken or failed to perform (ie covenants not relating to the payment of rent). Ground 13 deals with acts of waste, neglect or default by the tenant causing the condition of the dwelling-house (or the common parts) to deteriorate. It also covers any such conduct on the part of a lodger or subtenant if the tenant has not taken reasonable steps to have him removed.
Ground 14 deals with conduct on the part of the tenant (or any other person residing in the dwelling-house) which is a nuisance or annoyance to adjoining occupiers. It also deals with the case where the tenant (or any other person residing in the dwelling-house) has been convicted of using or allowing the house to be used for immoral or illegal purposes. Ground 15 deals with the ill-treatment of furniture (in a furnished tenancy). Ground 16 deals with the case where the tenant was granted the tenancy because of his employment with the landlord, but his employment has since ceased. (But it should be noted that many such persons — eg caretakers — are not tenants at all, but only licensees.)
Finally, it should be noted that a tenancy will cease to be an assured tenancy if the tenant ceases to use it as his only or principal home (see section 1(1)). The meaning of this phrase (and related phrases) has already been discussed in “Mainly for Students” (June 25 and July 9 1988).