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Renting Homes: the Final Report Volume 1: Report Renting Homes: The Final Report Volume 1: Report Law Com No 297 The Law Commission (LAW COM No 297) RENTING HOMES: THE FINAL REPORT VOLUME 1: REPORT Presented to the Parliament of the United Kingdom by the Secretary of State for Constitutional Affairs and Lord Chancellor by Command of Her Majesty May 2006 Cm 6781 £32.50 Two volumes not to be sold separately The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law. The Law Commissioners are: The Honourable Mr Justice Toulson, Chairman Professor Hugh Beale QC, FBA Mr Stuart Bridge Dr Jeremy Horder Mr Kenneth Parker QC The Chief Executive of the Law Commission is Mr Steve Humphreys. The Law Commission is located at Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ. The terms of this report were agreed on 7 April 2006. The text of this report is available on the Internet at: http://www.lawcom.gov.uk © Crown Copyright 2006 The text in this document (excluding the Royal Arms and departmental logos) may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the document specified. Any enquiries relating to the copyright in this document should be addressed to The Licensing Division, HMSO, St Clements House, 2-16 Colegate, Norwich, NR3 1BQ. Fax: 01603 723000 or e-mail: [email protected] ii THE LAW COMMISSION RENTING HOMES: THE FINAL REPORT CONTENTS PART 1: INTRODUCTION 11 Introduction 11 Terms of reference 12 Our general approach 13 Simplification 13 Increased comprehensibility 14 Flexibility 15 Two key features 16 Landlord-neutrality 16 Consumer protection approach 16 Provisions and terms 17 Relationship of the scheme to consumer protection law 18 Developing the scheme: consensus and controversy 19 The recommended abolition of ground 8 in the social rented sector 20 The recommended abolition of the six-month moratorium 21 Conclusion 22 Changes in the legislative context 23 Anti-social behaviour 23 Housing Act 2004 23 Housing conditions 23 Licensing of houses in multiple occupation 23 Selective licensing 23 Other control provisions relating to residential accommodation 24 Tenancy deposit schemes 24 Overcrowding 24 1 Energy efficiency 24 Grants to bodies other than registered social landlords 24 Implementation in Wales 24 Regulatory impact 26 Outline of the report and Bill 27 PART 2: THE SCHEME IN OUTLINE 29 Coverage 29 Contract types 29 Conversion of existing tenancies and licences to occupation contracts 29 Exceptions 29 Written statement of the contract 30 Terms of the contract 30 Terms relating to key matters 30 Fundamental terms 31 Supplementary terms 31 Additional terms 31 Modifying and varying the contract 31 Modification 31 Variation 32 Transactions relating to the contract 32 Lodgers 32 Adding a party to the contract 32 Sub-letting and transfers 33 Leaving the agreement 33 Obligations under the contract 33 Repairing obligations 33 Improvements 34 Prohibited behaviour 34 2 Obtaining a contract by deception 35 Uninterrupted occupation of the accommodation 35 Landlord’s name and address 35 Consultation on management matters 35 Terminating the contract 35 Possession notices 35 Grounds for possession 36 Termination by the contract-holder 36 Termination by joint contract-holders 36 Abandonment 37 Powers of the court 37 Death of the contract-holder 38 Joint contract-holders: survivorship 38 Succession 38 Excluded contracts 38 Contracts covered by other legislation 39 Contracts excluded on social policy grounds. 39 Other matters 40 Housing benefit 40 Rent regulation 40 PART 3: OCCUPATION CONTRACTS 41 Introduction 41 The occupation contract 42 Contract-holders aged 16 and 17 44 Exceptions 45 Types of occupation contract 47 Secure contracts 48 Standard contracts 48 3 Use of occupation contracts 48 Community landlords 49 Application in Wales 49 Ability of community landlords to make standard contracts 50 Conversion of standard contracts to secure contracts 51 Private landlords 52 The written statement of the contract 52 Content of occupation contracts 52 Key matters 53 Fundamental terms 54 Supplementary terms 55 Additional terms 55 Model contracts 55 Contents of model contracts 56 Landlords’ own contracts 57 Enforcement 57 Procedural sanction 58 Modifying and varying the contract 58 Modification 58 Variation 59 Secure contracts 59 Standard contracts 60 Variation by Act of Parliament 61 Enforcement 61 Conversion of existing tenancies and licences to occupation contracts 61 PART 4: TERMINATION OF OCCUPATION CONTRACTS 63 Introduction 63 General rules 63 4 Fundamental provisions applying to all occupation contracts 63 Termination before the effective date 64 Termination on or after the effective date 64 Joint contract-holders 64 Agreement 65 Repudiation by the landlord 65 Death of the contract-holder 65 Fundamental provisions applying to secure and periodic standard contracts 67 Contract-holder’s notice 67 Other provisions 69 Death of the landlord 69 Expiry of fixed term 69 Surrender and transfer 70 Rescission and frustration 70 Abandonment 70 Securing the premises 71 Recovery of possession 71 Termination by the landlord 73 Fundamental provisions relating to all contracts 73 Discretionary grounds 73 Mandatory ground 74 Procedure – the possession notice 74 The possession claim 74 Effect of possession order 75 Removing the tolerated trespasser 75 Fundamental provisions relating only to standard contracts 76 Landlord’s notice 76 Mandatory grounds 77 5 Possession claim – time restrictions 77 Forfeiture, notice to quit and re-entry 78 Estate management grounds 78 Introduction 78 The estate management grounds 80 Joint contracts – termination 82 Termination by the joint contract-holder 82 Secure and periodic standard contracts 83 Fixed term standard contracts 83 Termination by the landlord 84 Prohibited conduct 85 Exclusion by another joint contract-holder 86 PART 5: POWERS OF THE COURT 88 Introduction 88 Possession claims 88 The possession notice 89 Deemed possession claims 89 Possession orders 89 Special conditions 90 Breach of contract 90 Estate management grounds 91 Contract-holder’s notice 91 Landlord’s notice 91 Landlord’s notice in connection with end of fixed term 92 Serious rent arrears 92 Powers of the court 93 Discretionary grounds 93 Mandatory grounds 93 6 Deception 93 Persons with “home rights” 94 Structured discretion 94 Relevant circumstances 95 General relevant circumstances 95 Relevant circumstances regarding the contract-holder 95 Relevant circumstances regarding the landlord 96 Circumstances regarding other persons 96 Special cases 96 Rent arrears cases 97 Abolition of distress for rent 97 Pilot schemes 97 PART 6: DEALING 99 Introduction 99 Adding a contract-holder to the contract 99 Dealing 100 Impact on the landlord 100 Permitting a person to occupy as a lodger 100 Creating a sub-occupation contract 101 Failure to comply with conditions 103 Termination of head contract 104 Extended possession order 105 Exclusion of contract-holder 106 Excluded contract-holder’s remedies 107 Transferring the contract 108 Transfer to potential successor 108 Transfer to another secure contract-holder — exchanges 109 Transfer of fixed term standard contracts 110 7 Form and effect of transfer 111 Form 111 Effect 111 Unauthorised transfer 112 Landlord and Tenant (Covenants) Act 1995 113 Landlord’s consent 113 Reasonableness 114 The status of the occupation contract 115 The premises 115 The circumstances of the contract-holder 115 The circumstances of the landlord 115 The proposed joint contract-holder 115 Transfer to a potential successor 116 Transfer to a secure contract-holder 116 PART 7: SURVIVORSHIP, SUCCESSION AND RELATED MATTERS 117 Introduction 117 Survivorship 117 Succession rights 118 Introduction 118 The passing of the contract on death 119 Persons qualified to succeed 120 More than one qualified successor 122 Effect of succession 123 The transfer of fixed term standard contracts 124 The estate management ground for possession 125 PART 8: REPAIRS 126 Introduction 126 Fundamental terms 127 8 Limits 128 Access 129 Parties to proceedings 129 Enforcement 129 Waste and tenant-like user 129 Improvements 130 PART 9: PROHIBITED CONDUCT AND ANTI-SOCIAL BEHAVIOUR 131 Introduction 131 Prohibited conduct 132 Fundamental term 132 Enforcement 133 Possession proceedings 133 Injunction 133 Exclusion order 133 Power of arrest 134 Imposition of standard contract 135 Promotion to a secure contract 137 Simultaneous proceedings 137 PART 10: SUPPORTED HOUSING 138 Introduction 138 The new approach 138 Details of our statutory scheme 139 Exclusion of short term provision from the statutory scheme 140 Exclusion of supported housing accommodation from the requirement to enter into secure contracts – the enhanced management period 140 Tools available to the managers of supported housing 140 Extending the enhanced management period 142 9 PART 11: OTHER RIGHTS AND OBLIGATIONS 144 Obtaining a contract by making a false statement 144 Protection of the right to occupy 144 Landlord’s name and address 145 Joint and several liability 145 Management codes and consultation 146 Tenancy deposits 146 APPENDIX A: RECOMMENDATIONS FOR SUPPLEMENTARY TERMS AND OTHER MATTERS 148 Introduction 148 Supplementary terms 148 Recommended supplementary terms for all occupation contracts 148 Recommended supplementary terms for all periodic occupation contracts 149 Recommended supplementary terms for
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