TENANCY POLICY Lead Director Director of Operations Reference Pol 19 Homes and Neighbourhoods Committee Committee Review Feb 2019 Board Approval Mar 2018 Version Date Mar 2018 Review Date March 2021 Page 1 of 8 Cobalt Tenancy Policy Ref: POL 19 – Date: 26/03/18 – Revision: 1 – Owner: Director of Operations 1 Introduction & Aim The Tenancy Policy sets our position in terms of the type of agreement we will use in our stock and for particular client groups or circumstances. Cobalt Housing recognises that it is one of the main providers of social housing within the area in which it operates and that housing is a scarce resource. Our policy therefore must reflect the area, our stock and client groups. The aim of this policy is to provide:- • A broad framework of the type of tenancy that Cobalt Housing will provide and the circumstances in which each type will be offered • How they can be ended and details of when housing options advice will be provided. • An overview of mutual exchanges and successions. This policy supports both the Neighbourhood and the Tenant and Customer Experience Strategies, covering the tenancy types and ‘products’ we will offer to new and existing customers. 2 Policy Statement 2.1 The Tenancy Standard, which is part of the regulatory guidance, requires Registered Providers (RPs) to publish a Tenancy Policy, which outlines our approach to tenancy management. There is also a requirement that this policy takes account of the Local Authority’s Tenancy Strategy. 2.2 It also enables RPs to offer homes on an affordable rent and/or fixed term basis, as well as more traditional forms. The tenancy standard provides that RPs should issue tenancies that are compatible with the: • Purpose of the accommodation; • Needs of the individual households; • Sustainability of the community; and • Efficient use of their housing stock. 2.3 Relevant legislation to be considered; • Housing Act 1985 – contains the grounds that landlords must prove to gain possession for secure tenancies and includes the rights of secure tenants. • Housing Act 1988 – contains the grounds that landlords must prove to gain possession and includes the rights for assured and assured shorthold tenants. • Housing Act 1996 (Section 170) – which sets out the duty of RPs to co-operate to such an extent as is reasonable in offering accommodation to those in priority need under the Local Authority’s allocation scheme. • The Localism Act 2011 which allows RPs the flexibility to offer different types and lengths of tenancies. Page 2 of 8 Cobalt Tenancy Policy Ref: POL 19 – Date: 26/03/18 – Revision: 1 – Owner: Director of Operations 2.4 As well as satisfying our regulator this policy sets the framework through which our teams can understand our position and correctly allocate properties. 2.5 Liverpool City Council have a Tenancy Strategy. This strategy takes into account and ensures that our approach to tenancies is in keeping with their expectations. 2.6 This policy covers all allocations made by the organisation and the overarching legal rights conveyed by tenancy agreement to varying types of customers. 3 Policy Principles 3.1 The policy principles are part guided by our views of best practice and what will work best in this area, but also by legal restrictions and rights granted to transferring tenants in some of our properties. 3.2 The detail of how we start, end and review tenancies are set out in the relevant procedures, listed in section 6 below. 3.3 Rents chargeable Cobalt will operate four varying rent charge types; Social – currently our predominant type based on the social rent formula. Can be used on any tenancy type. Affordable – up to 80% of market rent used mainly for new build properties. Affordable rent can be used on lifetime, flexible or Assured Shorthold tenancies. Market rent – the market rate used where our product offer is market rented. It will only be used on this product type with and Assured Shorthold Tenancy. Shared Ownership - an initial rent charge of up to 2.75% rent charge on the unsold equity. The methods through which these are calculated are set out in the rents and service charge setting policy. 3.4 Tenancy Types 3.5 Secure Tenancy. Some of Cobalt’s tenants transferred over from LHT as part of the stock transfer in December 2003. Those that were secure tenants with LHT at this point in time retained a secure tenancy. Those on assured tenancies retained an assured tenancy. The right to remain a secure tenant remains as long as the tenant remains a Cobalt tenant. This type of tenancy is not issued to new tenants. Page 3 of 8 Cobalt Tenancy Policy Ref: POL 19 – Date: 26/03/18 – Revision: 1 – Owner: Director of Operations A tenant under a Secure Tenancy may not be evicted unless we have obtained a court order on one of the grounds listed in schedule two of the 1985 Housing Act or under the absolute ground for possession (under section 84 Housing Act 1985). If an existing secure tenant of Cobalt is granted a new tenancy by Cobalt, aside from if they choose to transfer to a market rent product, then this will be a secure tenancy. This is the only situation in which a new secure tenancy will be granted. 3.6 Protected Assured tenancy agreement. This agreement is used solely for tenants who transferred over to Cobalt from Liverpool City Council as part of the stock transfer in 2003. This agreement was drawn up to replace the previous secure tenancy. The agreement contains contractual rights that replicate some of the statutory rights of secure tenants (such as the right to buy) that are not granted in any of Cobalt’s other agreements. All tenants who are signed up to this agreement retain their tenancy terms and conditions for as long as they remain a Cobalt tenant. So, an existing protected assured tenant of Cobalt will be granted a protected assured tenancy if they transfer within Cobalt’s stock. This is the only situation in which a new protected assured tenancy will be granted. This would not apply should they choose to transfer to a market rent product. 3.7 Starter Tenancy (Assured Shorthold Tenancy) leading to Assured Tenancy The vast majority of new customers will be granted a Starter Tenancy, which will run for 12 months before, providing there have been no serious breaches of the agreement, we will convert it into an Assured Tenancy. The initial 12 month starter period can be extended. An Assured Tenancy is a form of ‘lifetime’ residential Tenancy in England and Wales that grants a degree of security of tenure to the tenant. A tenant under an Assured Tenancy may not be evicted unless we have obtained a court order on one of the grounds listed in schedule two of the 1988 Housing Act. 3.8 Assured Shorthold Tenancy An Assured Shorthold Tenancy is a form of Assured Tenancy with limited security of tenure. An assured Shorthold tenant can be evicted by obtaining a court order following service of a notice requiring possession or by obtaining a court order on one of the grounds listed in schedule two of the 1988 Housing Act. This type of tenancy will be used in the following instances: • Where Cobalt has a short leasehold interest rather than a freehold or long leasehold interest in the property • Intermediate rented properties • Rent to Homebuy and rent to buy properties • Market Rent properties Page 4 of 8 Cobalt Tenancy Policy Ref: POL 19 – Date: 26/03/18 – Revision: 1 – Owner: Director of Operations • Where there are asset management issues that may result in a future disposal of the property. • For temporary accommodation. • Supported Housing, where the type of accommodation or client group makes this a necessity. 3.9 Flexible tenancies (existing) Cobalt Housing agreed with the Regulator of Social Housing (RSH) to allocate a proportion of its stock as affordable rent. In addition, it decided to use a flexible tenancy type for these. These types of tenancies were used to allocate new build properties which had been built post 2011 but were not part of the Homebuy scheme. On review, while the affordable rent element of this is still desirable, there is very limited benefit to the organisation or the community in persisting with Flexible tenancies. We will therefore be contacting each tenant to offer to switch them to an affordable lifetime assured tenancy during 2018. Where this offer is not accepted we will address this at the natural end of the fixed term tenancy. 3.10 Flexible tenancies (future) Flexible tenancies operate for a fixed period of time, which generally (for new tenants) includes a one year probationary period, usually followed by a five year fixed term. During the fixed term of the tenancy the tenant will enjoy the same protection from eviction as a tenant who holds an assured or secure tenancy. Whilst we are generally moving away from the Flexible tenancy offer, we retain the tenancy type and reserve the right to issue these should circumstances require (such as time based property availability) or our local authority partner request this approach. Guidance on how to manage, review and end a flexible / fixed term tenancy are set out in the Flexible tenancy procedure. 3.11 Shared Ownership We currently have a few Shared Ownership properties. As a potential area of growth for the organisation we will continue to offer a Shared Ownership product. The scale and staircasing arrangements will be set scheme by scheme according to funding and planning arrangements. 3.12 Mutual Exchanges Full assured, secure tenants and those with affordable or flexible tenancies have the right to exchange.