The pace of change in housing law is set to be relentless in 2012. Scott Greenwood considers the key developments.
2011 was an interesting legal year as far as housing was concerned. We saw the Localism Bill receive Royal Assent, while the Government also proposed various reforms with regards to anti-social behaviour. An array of cases meanwhile went before our senior courts in relation to challenges under the Human Rights Act, resulting in the most recent Supreme Court authority of Powell & Others.
So what do we have in store for us in 2012?
The Localism Act, as far as tenure is concerned, makes various amendments to the Housing Act 1988 in relation to the assured shorthold tenancy regime so as to make it easier for registered providers (housing associations) to use fixed term assured shorthold tenancies as part of their affordable rent programme.
In relation to local authorities, there is going to be the introduction of the flexible tenure with the intention of granting of a fixed term tenancy for a minimum of two years rather than a tenancy for life. There will be repeals under the Act once this is commenced as to the sealing of agreements and also the requirement to register agreements with the Land Registry where the length of term will be seven years or more.
The affordable rent regime is a revolutionary concept in social housing whereby funding can be released for development purposes by securing affordable rents on properties at 80% of the market value. A similar principle will apply to local authorities in relation to flexible tenure.
A significant number of large housing groups have contracted with the Homes & Communities Agency in relation to this development programme and a significant number of groups throughout the sector are up and running in relation to affordable rents.
It will be interesting to see what challenges lie ahead in relation to this new regime. One interesting requirement in the Act is in relation to local authorities setting a tenancy strategy within 12 months of commencement of the Act. They are required to do so by co-operating with housing associations in their local areas.
In previous articles I have commented on the reforms the Government has proposed via consultation both through the Home Office and the Department of Communities of Local Government. These proposals continue to pick up momentum, with the Government – having closed consultation – considering these proposed reforms. It is looking likely that at some stage we may well have a mandatory ground for possession based on anti-social behaviour.
The interesting proposal, if it comes into effect, will be the community trigger, whereby a specified number of individuals in a community can complain to an independent body if they believe an anti-social behaviour partnership agency has failed to act in relation to their complaints. If this is enacted, it will be interesting to see how this develops as a strand of legal challenge and whether it will result in a convoluted statutory duty on behalf of partners in taking steps to enforce against anti-social behaviour within their communities.
If and when these reforms do become legislation, which is possible this year, no doubt there will be various challenges, particularly in relation to mandatory possession under human rights, although one would assume that if it becomes law, the Government will issue a compatibility certificate in relation to the reforms proposed.
One would have thought that after Powell & Others the law is pretty settled in relation to mandatory possession actions and human rights challenges. The Supreme Court has clearly set out that only in exceptional cases are defences likely to succeed. However, there are cases, as there will always be, pending before the European Court of Human Rights and as we have seen from the European Court of Human Rights in the case of United Kingdom v McCann, they have a very different approach in interpreting UK domestic law than our domestic courts. It could be that there will continue to be a conflict between the authorities which come out of the ECHR and our authorities which are developed through our senior courts. Just to recap, it is important to note that our senior courts are only obliged to consider case authorities from the European Court of Human Rights, they are not obliged to follow them and be bound by them.
One area which has received much commentary since the birth of human rights within English law under the Human Rights Act has been where one joint tenant terminates a joint tenancy by serving a Notice to Quit, leaving the remaining occupier in the property as a trespasser and subject to trespasser proceedings. There have been various challenges in our courts in relation to this which have been unsuccessful. We note from the McCann case that the European Court of Human Rights has a differing view and I suspect there may well be more cases on this point as the year progresses and we need to watch this space as to whether our courts change their view on this point.
There remains an intention to bring local authorities under the same regulatory requirements as housing associations. The Localism Act, once commenced, proposes the disbanding of the TSA with its powers and duties being transferred to the HCA as the main regulatory governing body.
The TSA is presently consulting on their final proposal of the Tenancy Standard for social housing. One interesting point which has arisen from that proposed standard is that for general needs periodic assured tenants, it may be possible for a registered provider to grant a fixed term tenancy between two to five years and not be bound to grant periodic tenancy as is presently the case. Further in this Standard, there is a proposal that where there is a starter periodic assured shorthold tenancy, it could be extended for a further six months, if there is good reason, making a total of 18 months for the period of that tenancy, subject to review right.
One other interesting area of regulatory reform will be the approach taken on review following service of a Minded to Notice on a fixed term affordable rent tenant. The Act as it presently sits merely provides for review mechanisms for flexible tenancies (local authorities tenancies) but not fixed term assured shorthold tenancies of housing associations, although the Regulator has proposed that there should be a similar regime in place. There is a debate within the sector at present as to whether such a review mechanism should form part of a complaints process or a separate process. No doubt this practice will be developed as time goes by.
Criminalisation of Sub-letting
The issue of unlawful sub-letting of social housing remains very high up on the Government’s agenda and ministers are proposing legislative reform so as to make sub-letting a criminal offence. The Government has launched consultation, which ends on 4 April, on this proposal.
The general intention at this stage in the proposal is to provide local authorities with firm powers of prosecution but with the cooperation and assistance of housing associations within their local areas. For those organisations which are carrying out tenancy audits and dealing with tenancy fraud, it is worth them consulting the DCLG Guidance titled Tackling Unlawful Sub-Letting & Occupancy: Good Practice for Social Landlords.
Right to Buy
A further proposal of the Government which may pick up momentum this year is in relation to its proposal to not only allow greater discount in relation to the right to buy throughout the social housing sector, but also to extend the right to buy to one million families in housing association properties. If this becomes law, this will clearly be very challenging for the sector.
The Welfare Reform Bill continues to go through the Lords and the House of Commons. There has been a lot of discussion and debate in the Lords and the Lords have expressed concerns, as to some of the proposals, in particular rules proposed on under occupation and also the loss of benefits for people that are disabled. It will be interesting to see what final version goes back to the Commons before it becomes an Act. This Bill is proposing a massive overhaul of all welfare benefits within this country with a general concept of a universal credit which will not only deal with benefits run by the DWP but also local authority housing benefit and council tax benefit.
Scott Greenwood is a housing solicitor at Radian Housing Group.