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You are here: BAILII >> Databases >> The Law Commission >> RENTING HOMES 1: STATUS AND SECURITY (A Consultation Paper) [2002] EWLC 162(4) (28 March 2002) URL: http://www.bailii.org/ew/other/EWLC/2002/162(4).html Cite as: [2002] EWLC 162(4) |
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Part IV
The Approach in other jurisdictions
4.6 The nature of this provision is, however, changing. The Scottish Executive’s consultation paper[2] described the position thus:
Over the past thirty years the social rented sector in Scotland has become progressively smaller, and it now accounts for less than a third of housing across the country. At the same time as it has diminished in size, however, it has become more diverse. In particular the last quarter century has seen the growth of community-based housing associations as important players in the housing scene, and more recently we have seen increasing interest in exploring other innovative forms of social landlord.
4.7 Until the changes to housing law in England and Wales, introduced by the Housing Act 1996 (which did not apply to Scotland[3]), the legal framework for social housing in Scotland was substantially the same as that of England and Wales.[4] Following the Housing (Scotland) Act 1988 two different forms of legal tenure existed within the social rented sector:
(1) the secure tenancy, provided by the local authority landlord, governed by Part III of the Housing (Scotland) Act 1987; and
(2) the assured tenancy, provided by the housing association landlord, governed by Part II of the Housing (Scotland) Act 1988.
The two forms of tenancy provided different rights to tenants. The right to buy was limited to secure tenants[5] who also enjoyed greater security of tenure. Only assured tenants could be evicted under a mandatory ground – ground 8 – when they owed at least three months arrears of rent.[6]
4.8 The implications of two forms of tenure existing within the social rented sector were made explicit in the consultation paper.[7]
This situation is confusing to tenants, and results in anomalies whereby, for example, two tenants in identical accommodation owned by the same housing association can have significantly different rights and obligations. We believe that there should be a uniform set of rights and obligations across the socially rented sector, so that tenants and landlords know where they stand. In essence, all types of social landlord are providing the same range of services for tenants. The fundamental similarities of the service and the current inequalities in tenancy rights will become even clearer as local authorities and local communities contemplate the merits and implications of transferring houses into community ownership.
4.10 The Scottish secure tenancy is based upon the former secure tenancy scheme. The definition in section 11 of the Housing (Scotland) Act 2001 is broadly similar to sections 79 to 81 of the Housing Act 1985,[8] but is extended to include registered social landlords. The categories of excluded tenancies set out in Schedule 1 of the Act largely overlap. The structure and content of the grounds for possession in Schedule 2 are a modified and updated version of the grounds in Schedule 2 of the 1985 Act.
4.11 Registered social landlords are therefore returned to their pre-Housing (Scotland) Act 1988 position. The rights of their tenants have been aligned with those of local authority tenants. Registered social landlords no longer have available to them the mandatory rent arrears – ground 8 – which was a feature of the assured tenancy scheme.[9]
4.12 There are a number of notable differences between the old and the new schemes. First, the right to succession to a Scottish secure tenancy is extended in section 22 to a second successor.[10] Secondly, there is no ground for possession for under-occupation by a spouse successor as in Ground 16 of Schedule 2 of the Housing Act 1985. Thirdly, once a tenancy is a Scottish secure tenancy it will continue as one even if the landlord and/or tenant ceases to comply with the conditions set out in section 11(1) (b), (c) and (d) of the Act.[11]
4.14 Difficulties have been caused by the failure of the Housing Act 1985 to prescribe a statutory mechanism for a tenant wishing to terminate the tenancy. The tenant is able to use the common law methods of notice to quit or surrender. But it is not always easy for a landlord to know whether there has been a surrender of the property.[12] Nor did the law provide a simple means for the landlord to regain possession of a property it believes has been abandoned.
4.18 Secondly, sections 17 to 21 set out a procedure for the landlord to regain possession by service of four weeks’ notice on the tenant of its intention to terminate the tenancy where it has reasonable grounds for believing that the house is abandoned. The process only requires the court to become involved if a tenant aggrieved by this procedure applies to court for a remedy[13] within six months of the termination of the notice period.[14]
4.20 This contrasts with the requirements of section 83 and section 83A of the Housing Act 1985.[15] These provide for different (and shorter) notice periods where possession is sought on anti social behaviour or domestic violence grounds. Finally section 83 of the Housing Act 1985 allows the court to dispense with the notice requirements when it considers it just and equitable to do so. There is no parallel provision in the Scottish legislation.
4.23 There are also provisions enabling individuals occupying or intending to occupy the house as their only or principal home to apply jointly with the tenant in writing to the landlord to be included as a joint tenant under the tenancy; and enabling “qualifying occupiers”[16] to be joined as parties to possession proceedings.
4.24 The Scottish Executive has given priority to the need to provide social landlords with the means to respond effectively to anti social behaviour both by tenants and others.[17]
4.27 The most innovative measure for the control of anti social behaviour is the short Scottish secure tenancy. The Act does not follow the model which allowed local authorities in England and Wales to elect to use introductory tenancies as probationary tenancies for all new tenants. Instead Scottish social landlords can – where the prospective tenants have within the last 3 years been evicted on conduct grounds, or where the prospective tenant or a person who it is proposed will reside with the prospective tenant is subject to an anti social behaviour order under section 19[18] of the Crime and Disorder Act 1998 – let the property on a short Scottish secure tenancy.
4.30 This provides a flexible tool to manage anti social behaviour at any time during the lifetime of a tenancy and to encourage changed (and improved) behaviour on the part of tenants and their families.[19]
4.31 A landlord can only evict for anti social behaviour when the court decides that it is reasonable to do so. In English law, judges have considerable discretion under the Housing Act 1985 to determine reasonableness[20] and this may lead to a lack of predictable outcomes for both the landlord and the tenant.[21] The Housing (Scotland) Act 2001 structures this discretion. Section 16 (3) sets out the matters which must be taken into account when deciding reasonableness in possession proceedings involving conduct grounds.
4.33 The interface and overlap between the grounds for possession and the offence of harassment is made explicit by providing that harassment is to be construed in accordance with section 8 of the Protection from Harassment Act 1997.[22]
4.35 Section 23 of the Housing (Scotland) Act 2001 sets out the tenant’s right to a written tenancy agreement and information, and provides a power for the Executive to issue guidance as to the form and content of a tenancy agreement. The Scottish Executive has now published a model Scottish Secure Tenancy which is clearly structured and written in plain English.[23]
4.36 The Housing (Scotland) Act 2001 provides important extensions to the core rights of social tenants.
The landlord in a Scottish secure tenancy must-
(a) ensure that the house is, at the commencement of the tenancy, wind and watertight and in all other respects reasonably fit for human habitation, and
(b) keep the house in such condition throughout the tenancy.
4.38 In addition, regulations will set out the extent of the Scottish secure tenant’s right to repair.
(1) that there have been changes in the character of the house of the neighbourhood or other circumstances making the term either unreasonable or inappropriate,
(2) that the term is unduly burdensome compared with any benefit resulting from its performance, or
(3) that the existence of the term impedes some reasonable use of the house.
4.43 If the landlord does not agree the variation the tenant may apply to the court.
(1) temporary lettings to persons moving into the area in order to take up employment there, and for the purpose of enabling that person to seek accommodation in the area;
(2) temporary lettings pending development;
(3) temporary accommodation for homeless persons;
(4) temporary accommodation for persons requiring housing support services; and
(5) accommodation in property not owned by the landlord.
4.46 For example, in Australia – in contrast to the United Kingdom – the general common law principles of landlord and tenant had traditionally applied to residential tenancies, with only minimal intervention by statute in the development of the law. Even those few developments that had occurred had applied equally to all types of tenancy. In the mid-1970s two major reports of the Commonwealth Commission of Inquiry into Poverty concluded that the general common law had failed to adapt to modern residential tenancy needs. New legislation specifically directed to residential tenancies was then mooted in Australia.[24] Over the next 20 years, such legislation was drafted in most Australian States. Despite being politically controversial and strongly contested by landlord interest groups at the time,[25] these reforms are now considered the norm in most Australian States. We have been able to draw some useful conclusions from our analysis.
4.47 First, one very important theme that emerges from the analysis is that landlords’ and tenants’ rights and responsibilities are set within a consumer protection framework.[26] Key features of this approach are that
(1) parties retain their freedom to contract within statutory constraints;
(2) market rents prevail, but with statutory controls on excessive rent increases; and
(3) the statutes contain comprehensive and comprehensible provisions regulating the whole relationship between landlord and tenant.
4.51 It is also worth noting the internet resources dedicated to residential lettings maintained by the relevant state administration. These provide a range of useful information, including tribunal decisions and help-lines for both landlords and tenants.[27]
4.52 In general the statutes are comprehensive in that they cover all residential occupancies with no requirement of exclusive possession[28] and no requirement that the occupancy is as the occupier’s “only or principal home”. This is despite the fact that most of the statutory frameworks include provisions that operate to give residential occupiers exclusive occupationalrights, for instance the covenant of quiet enjoyment.
4.54 Whilst none of the statutes claims that they provide a residential lettings code, it does appear that there is a move towards codifying residential letting provisions in several of the jurisdictions. In particular the Residential Tenancies Act 1997 (Victoria, Australia) contains a comprehensive set of statutory provisions relating to both public and private lettings.[29]
4.56 The Residential Tenancies Act 1987 (New South Wales, Australia) also gives a wide-ranging power to exclude certain types of occupancy by regulation. This has been exercised to exempt, amongst others, premises used for aged persons’ accommodation, leases of certain leasehold strata scheme properties and premises subject to certain equity purchase agreements.[30]
4.57 A full range of issues that may cause conflict between landlords and tenants during the lifetime of the arrangement is regulated. For instance, the landlord’s right of access to the property is set out in detail in several of the statutory frameworks; so, too, are the responsibilities of the landlord for the condition and repair of the premises.[31]
4.60 The majority of the jurisdictions permit the termination of the letting agreement without cause as long as there is compliance with notice and other procedural requirements.[32] However most of the jurisdictions (including all of the Australian statutes considered) also seek to prevent “retaliatory evictions”, that is to say evictions which are simply a response to a tenant exercising or proposing to exercise a statutory right or a power.[33]
4.61 There is a variety of arrangements for ensuring that the parties to the agreement are fully aware of the provisions. Sections 13 and 13(B) of the amended[34] Residential Tenancies Act 1986 (New Zealand) require that the agreement and any variations be in writing and signed by both the landlord and the tenant. Section 13(A) prescribes a relatively extensive minimum of information that must be included in the tenancy agreement. Section 13(C) sets out the default provision that tenancy agreements are not unenforceable on the grounds that they are not in writing.
4.64 In contrast, the Tenant Protection Act 1997 (Ontario, Canada) contains no requirement for a written agreement and no prescribed terms. Information that the landlord must give to the tenant is limited to the legal name and address for the purpose of giving notices or documents under the Act.[35]
4.66 The tribunal system has been very successful in many of these jurisdictions. The caseload of the Australian tribunals has exceeded all expectations, with applications in the large state of New South Wales reaching 20,000 per year. The cases are heard very cheaply; filing fees are extremely low and legal representation is only allowed in exceptional cases. Cases are also heard speedily with applications for compensation usually determined within a month, applications for termination within two weeks and in cases of alleged vandalism or damage to the rental property within a matter of hours.[36]
4.69 The New Zealand legislation differs from its Australian counterparts in that it requires most applications to the tribunal to first be referred to mediation.[37] Mediated agreements constitute a binding and legally enforceable order. This system of mediation is advantageous to the disputants in that it is paid for by the interest from rental deposits.[38] Thus disputes can be resolved at no cost to the parties in a process which may help to improve future relations between them.[39] It also reduces pressure on the tribunal system; two-thirds of residential tenancy disputes in New Zealand are now resolved by mediation without ever coming before the tribunal.[40]
4.70 Deposits can be a major source of tension between landlords and tenants. More than half of the jurisdictions considered provide for the centralised holding of deposits by the state. In general, upon receipt of the deposit the landlord must lodge it with a state-run trust account until the termination of the tenancy agreement. The tribunal or the state administration resolves disputes arising from the return of deposits. [41]
(1) any serious adverse effects the tenancy has had on neighbouring residents or other persons,
(2) whether the breach of the residential tenancy was a serious one and whether, given the behaviour or likely behaviour of the tenant, a failure to terminate the agreement would subject, or continue to subject, neighbouring residents or any persons or property to unreasonable risk,
(3) the landlord’s responsibility to its other tenants,
(4) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal, and
(5) the history of the tenancy concerned.
4.88 All of the legislation we have considered has concentrated on providing comprehensive provisions which are transparent and comprehensible to the landlord and tenant. It is clear that this has to be the basis for a consumer approach to housing law. However it is also clear that simplicity is not necessarily consistent with this approach,[42] and a careful balance has to be achieved between detailing the respective rights and responsibilities of landlords and tenants and overwhelming the parties with prescriptive and technical provisions.
[1]For a helpful summary, see Simon Halliday, “Lessons from North of the Border: a Brief Commentary on the Housing (Scotland) Act 2001” [2001] JHL 79.
[2]Scottish Executive, Better Homes for Scotland’s Communities – The Executive’s Proposals for the Housing Bill (5th July 2000) at para 3 of “The Executive’s strategy and legislative proposals”. Cf http://www.scotland.gov.uk/consultations/housing/bhsc-00.asp
[3]Save for the provisions in the Housing Act 1996, Part IV relating to housing benefit: Housing Act 1996, s 231.
[4]For a useful explanation of Scottish housing law cf Peter Robson and Simon Halliday, Residential Tenancies (2nd ed 1998).
[5]Housing (Scotland) Act 1987, s 61. The right to buy was further preserved for tenants who became assured tenants as a consequence of a voluntary transfer; cf the Housing (Scotland) Act 1987, s.81A, as inserted by Housing Act 1988, s 128.
[6]Ibid, s 18 and Sched 5, Ground 8. Housing Act 1996, s 101 – which reduced the amount of arrears under the equivalent ground in England and Wales to two months – does not apply in Scotland.
[7]Scottish Executive, Better Homes for Scotland’s Communities – The Executive’s proposals for the Housing Bill (5th July 2000) section 1, para 3.
[8]Comparisons are made between the Housing (Scotland) Act 2001 and the Housing Act 1985 because of the greater familiarity of our readership with the statutory framework within England and Wales. However readers should note that the provisions governing secure tenancies in Scotland despite being largely identical to the English provisions were actually contained within the Housing (Scotland) Act 1987.
[9]In “Rights and Security in Housing: the Repossession Process in the Social Rented Sector” (1999) 62MLR 11, Mullen et al point out that in general Scottish housing associations have issued to their tenants a model assured tenancy agreement published by the Scottish Federation of Housing Associations rather than taking full advantage of the Housing Act 1988. The model is designed to give contractual rights for housing association tenants which are as close as possible to existing secure tenants’ rights. Despite this a significant number of housing associations retained and used the mandatory rent arrears ground.
[10]We shall be discussing the question of rights of succession in a later consultation paper: see para 1.11 above.
[11]Section 11(8). Section 11(1)(b) to (d) sets out the landlord and tenant conditions.
[12]Eg Zionmor v Islington LBC (1997) 30 HLR 822. Here the tenants notice addressed to those “who have written graffiti on the walls of my flat” left on the tenants notice board was held not to be conduct that amounted to surrender of his tenancy. The note had not been addressed to the landlord and did not evidence an unequivocal intention to relinquish possession, especially in the context of his continuing right to buy application.
[13]Section 18(3) provides that, where a tenancy has been terminated in accordance with that section, the landlord may take possession of the house without any further proceedings. Section 19(3) outlines the remedies available to a tenant who successfully challenges the termination of a tenancy under s 18(2).
[14]This procedure is a re-enactment of the provisions in the Housing (Scotland) Act 1987, ss 49 to 51. There is no equivalent procedure in the Housing Act 1985.
[15]Much of the complexity is caused by the amendments made under Housing Act 1996, s 147.
[16]“Qualifying occupier” is defined in the Housing (Scotland) Act 2001, s 14(6) as “a person who occupies the house as that person’s only or principal home and who is (a) a member of the tenant’s family aged at least 16 years, (b) a person to whom the tenant has, with the landlord’s consent under section 32(1), assigned, sublet or otherwise given up possession of the house or any part of it, or (c) a person whom the tenant has, with such consent, taken in as a lodger”.
[17]See for instance the introduction to the Scottish Executive’s paper, Housing and Anti social Behaviour: The Way Ahead (14th Jan 2000). Available at http://www.scotland.gov.uk/ library2/ doc10/hasb-00.asp.
[18]The English and Welsh equivalent to this section is found in the Crime and Disorder Act 1998, s 1.
[19]Cf Rebecca Cattermole, “Introductory Tenancies and the Human Rights Act: R (on the application of Johns and McLellan) v Bracknell Forest District Council” [2001] JHL 27 and “Introductory Tenancies and the Human Rights Act” [2002] JHL 7.
[20]Though there is a certain amount of case law on the exercise of discretion: see paras 12.13 and, in connection with anti social behaviour, 13. 72 below.
[21]Cf Jonathan Manning, “Reasonableness: A New Appoach” [1998] JHL 59.
[22]Housing (Scotland) Act 2001, Sched 2, ground 7(2).
[23]Cf http://www.scotland.gov.uk/library3/housing/msst-00.asp
[24]A Bradbrook, “Residential Tenancies Law – The Second Stage of Reforms” (1998) 20 Sydney Law Review 402, 402 to 3.
[25]Ibid.
[26]Eg the Director of the Office of Fair Trading and Business Affairs administers the Residential Tenancies Act 1997 (Victoria, Australia) as provided by s 486 of that Act. Further, s 486(a)(ii) provides that complaints about excessive rent are made to the Director.
[27]Eg http://www.minhousing.govt.nz/tenancy and http://www.pssg.gov.bc.ca/rto/index.htm.
[28]The fact that there is no requirement of exclusive possession in these statutes brings licences within their ambit, and thus makes it unnecessary to distinguish between leases and licences for the purposes of residential lettings in many Commonwealth jurisdictions.
[29]Section 1 of the Act sets out a broad remit which includes defining the rights and duties of landlords and tenants of rented premises, providing for the regulation of caravan parks and moveable dwellings, providing for inexpensive and quick resolution of disputes and for a centralised system for the administration of bonds.
[30]Residential Tenancies (Residential Premises) Regulation 1995, Part 5 (NSW, Australia).
[31]A useful example is s 48 of the Residential Tenancies Act 1986 (New Zealand), as amended by s 21 of the Residential Tenancies Amendment Act 1996 (New Zealand), which sets out in detail when and with what notice the landlord may enter the premises.
[32]Eg the Residential Tenancies Act 1997, s 263 (Victoria, Australia) provides that the landlord is able to give notice to the tenant to vacate rented premises without specifying a reason. The notice period must be at least 90 days.
[33]Eg the Residential Tenancies Act 1997, s 266(2) (Victoria, Australia) provides that a no reason notice or a notice terminating a fixed term tenancy before the end of the fixed term is of no effect if it is given in response to the exercise or proposed exercise, by the tenant, of a right under the Act.
[34]Amended by the Residential Tenancies Amendment Act 1996, s 6 (New Zealand).
[35]Tenant Protection Act 1997, s 8 (Ontario, Canada).
[36]A Bradbrook, “Residential Tenancies Law – The Second Stage of Reforms” (1998) 20 Sydney Law Review 402, 414.
[37]Mediation is a process used for dispute resolution whereby an impartial third party acts as a facilitator to help the parties to come to a mutually acceptable, workable and reasonable settlement of the issues in dispute.
[38]See para 4.71 and note 41 below.
[39]M Slatter, “Landlord and Tenant Disputes in New Zealand: Jaw Jaw not War War” (1988) Conv(NS) 89, 94. Cf also H Wilkinson, “Quicker Routes to Justice? Residential Tenancy Tribunals in New South Wales” (1992) Conv (NS) 141-145.
[40]P Skinner, “Judicial Independence and Residential Tenancy Tribunals” (1998) 7 J Judicial Admin (Aust) 130.
[41]The development of the regulation of deposits in the state of Victoria, Australia provides an interesting example. The Residential Tenancies Act 1980 required landlords to lodge bond moneys in a trust account with an approved financial institution. However, in response to concerns about unsatisfactory interest returns on bond moneys, lack of compliance with the legislation and the perception that the landlord and his agent had control of the bond moneys, a new system was established by the Residential Tenancies Act 1997. The Act set up the centralised and streamlined administration of rental bonds by a new independent body called the Residential Tenancies Bond Authority, which is responsible for the collection, investment and refund of bond moneys. Like the 1980 Act, the 1997 Act sets maximum bond limits, sets out the specific circumstances in which the landlord is entitled to retain an amount of bond money and requires the landlord to give the tenant a signed “condition report”, which provides evidence of the state of the premises at the start of the lease. However, the ResidentialTenancies Bond Authority must not pay out an amount of bond money unless the landlord and tenant make a joint application for a refund or in accordance with a determination of the Residential Tenancy Tribunal
[42]See for example the provisions of the Residential Tenancies Act (ACT), above para 4.63.
