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You are here: BAILII >> Databases >> The Law Commission >> Renting Homes (Report) [2006] EWLC 297(3) (May 2006) URL: http://www.bailii.org/ew/other/EWLC/2006/297(3).html Cite as: [2006] EWLC 297(3) |
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3.1 One of the principal reasons why the current law relating to the renting of homes is so complex is the large number of different tenancy types that are found in the legislation. They include: secure tenancies; assured tenancies; assured shorthold tenancies; introductory tenancies; statutory tenancies; protected tenancies; demoted tenancies. Each of these different legislative statuses attracts different sets of rights and obligations, particularly in relation to questions of security of tenure.[1]
the rent must be below a defined level;
the rent must be above a defined level;
the premises must be used as the tenant's only or principal home;
the premises must be let;[2]
the tenancy must not fall within one of the other exceptions listed in Schedule 1 to the Housing Act 1988 (which include lettings to students, agricultural tenancies and lettings by local authorities).
3.3 Analogous provisions define the scope of secure tenancies. In particular, secure tenancies can only be granted by those who meet the "landlord condition".[3] They can only be granted to those who satisfy the "tenant condition".[4]
3.5 A fundamental aim of our project is to simplify this complex range of rules and distinctions.
3.6 Central to the recommended scheme is the concept of the occupation contract. This Part considers issues relating to the creation and use of occupation contracts.[5] Here we discuss:
the concept of the occupation contract;
types of occupation contract;
the use of occupation contracts (including special rules affecting community landlords);
the written statement of the contract;
enforcement;
modification and variation; and
conversion of existing tenancies and licences.THE OCCUPATION CONTRACT
3.7 At the heart of the scheme is the occupation contract.[6] So long as a contract conferring the right to occupy premises satisfies normal common law rules relating to the creation of contracts – that there should be an offer, acceptance of the offer, and consideration[7] - it is potentially an occupation contract within the scope of the scheme. A landlord and a contract-holder can reach a binding occupation contract orally without the need for any written formality.[8]
3.8 In addition, the parties must have the capacity to enter into a contract. (We discuss below the particular recommendations we make in relation to those aged 16 and 17.)[9] In the context of our consultation and research on supported housing,[10] an issue of general application to our scheme arose. This related to capacity to enter into contracts, particularly among those with mental health problems. The lack of clarity in the law made us ask whether our Bill should address this issue. In the event, the enactment of the Mental Capacity Act 2005 has gone a long way to clarifying the law, and setting down decision-making frameworks for those who lack capacity. We have concluded that to make distinct provision in relation to mental capacity and the making of occupation contracts would not be helpful. We note that the Mental Capacity Act 2005 provides for a Code of Practice to be issued by the Lord Chancellor. We recommend to the Department for Constitutional Affairs that this should contain consideration of the relationship between the law of mental capacity and the capacity to enter into occupation contracts.
3.9 A number of points about the definition of "occupation contract" should be noted at the outset.
It is specifically provided that an occupation contract can be either a tenancy or a licence.[11] This avoids historic complications whereby statutory schemes only applied where premises were "let".[12] This definition recognises that the distinction between a lease/tenancy and a licence exists. This will often be important. For example, where a landlord sells their legal estate in a property to another, it is highly relevant whether that estate is subject to a lease or a licence. These issues continue to be determined by application of the current law. We also make explicit that, where an occupation contract is a tenancy, any land registration requirements must be satisfied.[13]
The contract must be made between a landlord and an individual[14] (the "contract-holder"[15]). The contract must confer the right to occupy premises as a home.[16] Where the contract is made with two or more persons, at least one must be an individual.[17] Contracts relating to the occupation of premises for purposes other than occupation as a home fall outside the scope of our scheme. In many situations, such agreements fall within the scope of other statutory schemes, for example business tenancies. These exceptions are set out in schedule 1 to the Bill and are discussed below at paragraphs 3.13 to 3.17.
Despite the breadth of the definition, not all contracts which confer the right to occupy premises as a home fall within the scope of the Bill.[18] These exceptions are set out in schedule 1 and discussed in more detail below.
Most of the ancillary tests currently used to define the scope of statutory protection are removed. Thus, there is no requirement that the rent should be above or below a defined rent limit. Nor is there any requirement that the premises must be occupied as the "only or principal home".[19]
Most importantly in the context of the social rented sector, there is no "landlord condition". Our emphasis on the principle of landlord neutrality means that the scheme will, for the first time, enable the creation of a single type of contract that can apply throughout the social rented sector, irrespective of the identity of the landlord.
Once created, an occupation contract continues in existence either until it is terminated in accordance with the provisions of the scheme, or unless the premises or the contract come within the scope of the exceptions listed in paragraph 3 of schedule 1.[20] In the latter case, the underlying tenancy or licence would continue to exist.[21]Contract-holders aged 16 and 17
3.10 The Bill specifically provides that an individual who has not reached the age of 16 cannot be a contract-holder.[22]
3.11 In the light of responses to our Consultation Papers,[23] we know that the present law can create unnecessary difficulties for landlords who want to make housing provision for, for example, a young person who has had to leave the parental home. This Bill provides that landlords can create occupation contracts with 16 and 17 year-olds.[24]
3.12 To prevent abuse of this rule, it is specifically provided that the contract-holder is not entitled to repudiate the contract, merely because the contract was made when the contract-holder was under 18.[25] Nor will a court be able to treat the contract as unenforceable, merely because it was made when the contract-holder was under 18.[26] In all other respects the Bill applies to the contract-holder, as if they had been 18 at the time the contract was made.[27]
Exceptionscontracts that can never be occupation contracts;
contracts that will not be occupation contracts unless the landlord gives notice stating that the contract is an occupation contract; and
special cases.
contracts made with persons under 16;[28]
long leases;[29]
Rent Act tenancies;[30]
Rent (Agriculture) Act occupancies and tenancies;[31]
agricultural tenancies;[32]
business tenancies;[33] and
tenancies or licences relating to direct access accommodation.[34]
those where no rent or other consideration (for example non-monetary consideration such as labour) is payable;[35]
contracts for another's benefit;[36]
holiday lets;[37]
contracts for the provision of accommodation in a care institution,[38]
contracts for the provision of accommodation in barracks;[39]
contracts for accommodation provided as a temporary expedient;[40] and
contracts for accommodation shared with the landlord.[41]If the landlord decides to give notice that any of these arrangements are to be occupation contracts, the notice must be given in writing before or at the time the tenancy or licence is made.[42]
3.16 Finally there are two cases for which special provision is made.
(1) Contracts for accommodation provided for the homeless:
(a) A tenancy or licence made by a local authority under its housing functions in relation to homelessness is not an occupation contract, unless the provision is to an applicant found to be in priority need and not intentionally homeless.[43] (In this case, the local authority may make a standard contract with the applicant.)[44]
(b) Where a local housing authority makes arrangements with a relevant landlord[45] in pursuance of its interim housing duties, a tenancy or licence is not an occupation contract until the end of the period of 12 months from the date of the authority's decision, or the date following any review or appeal. The relevant landlord may notify the person with whom the tenancy or licence is made, before that date, that it is to be an occupation contract.[46] When this occurs, it may become a standard contract.
(2) Supported accommodation:
Tenancies and licences relating to supported accommodation are not occupation contracts if it is intended that accommodation will be provided for no longer than four months.[47] If accommodation is in fact provided for longer than that period they may become standard contracts.
3.17 The appropriate authority is given power to amend this list of exceptions by order.[48]
TYPES OF OCCUPATION CONTRACT3.18 In place of the current multiplicity of statutory statuses, the scheme provides for just two types of occupation contract: secure and standard.[49]
Secure contracts3.19 Secure contracts are modelled on secure tenancies which currently can only be created by local authorities. As with secure tenancies, secure contracts have a high degree of security of tenure protected by the Bill.[50] They can be created only on a periodic basis.[51] The reason for this is that in the context of the high security of tenure granted by the Bill for a secure contract, having a fixed term would not be useful. If a fixed term secure contract were to be followed on holding over (that is where the contract-holder continues to live there after the expiry of the fixed term) by a periodic secure contract, there would be little point having a fixed term contract in the first place (especially when it would make it harder for the landlord to vary the contract). If a fixed term secure contract were to be followed by something less than a periodic secure contract, it would be significantly less valuable to the contract-holder than a periodic secure contract. The idea of the secure contract is to provide a security gold standard for use in the social sector. To allow fixed term secure contracts would at best muddle the picture, and at worst, undercut that objective.
Standard contracts3.20 Standard contracts are modelled on the current assured shorthold tenancy granted by private landlords. Although they have a low degree of security of tenure protected by statute, there is nothing preventing landlords entering contracts which have a greater degree of security than the Bill requires. Often this happens because it is in the landlord's interest to do so, for example to minimise void letting periods. Standard contracts can be either fixed term or periodic.[52]
3.21 In the case of standard contracts only, the Bill provides that a landlord is able to specify periods where, notwithstanding the existence of the contract, the premises cannot be used for occupation.[53] The purpose of this provision is to enable, for example, universities to enter occupation contracts with their students for the whole academic year, but also enable them to regain possession during vacation periods when the accommodation is needed for conferences. It would be a disproportionate administrative burden for there to be separate contracts for each academic term or semester.
USE OF OCCUPATION CONTRACTS Community landlords3.23 The starting point is that community landlords[54] are required to enter into secure contracts. This principle applies equally whether the landlord has made the contract[55] or become the landlord under the contract.[56] There are four exceptions.[57]
(1) The occupation contract is listed in schedule 2 to the Bill (which provides circumstances in which a community landlord may enter into a standard contract) and the landlord has given the contract-holder the requisite notice that the contract will be a standard contract.[58] Where the landlord's decision to give the notice is subject to judicial review, the contract-holder may apply to the county court for a review on judicial review principles.[59]
(2) The contract is made as a result of a court order following breach of the prohibited conduct term in the contract. [60]
(3) The contract is a new contract which has arisen or has been made at the end of a fixed term standard contract.[61]
(4) The contract is implied when a landlord starts to accept rent from a person who is a trespasser in relation to the premises.[62]Application in Wales
3.24 Special provision is made to enable the National Assembly for Wales to amend the application of these rules to community landlords in relation to premises situated in Wales.[63]
Ability of community landlords to make standard contracts(1) Contracts that would not be occupation contracts at all unless the landlord gave notice stating that they were an occupation contract.[64]
(2) Occupation contracts relating to supported accommodation.[65]
(3) Probationary contracts.[66] Under the present law local housing authorities are required to enter "all or nothing" arrangements; either all their tenancies start as (unprotected) introductory tenancies or they are all (protected) secure tenancies. This means that a person with years of impeccable behaviour may, on moving to another local authority, suddenly find they have lost their statutory protection. Our recommendations replace these inflexible rules and enable community landlords to confer probationary standard contracts on those for whom it is really appropriate.
(4) Contracts for the provision of accommodation to asylum seekers.[67]
(5) Contracts for the provision of accommodation for displaced persons.[68]
(6) Contracts relating to accommodation provided for the homeless to whom the local authority owes a duty.[69]
(7) Service occupancies created by community landlords in certain specified circumstances.[70]
(8) Contracts relating to student accommodation provided by community landlords.[71]
(9) Contracts relating to accommodation provided on a temporary basis, for example on land acquired for development; for persons taking up employment; accommodation provided while works are undertaken; or other cases where there are specific short term arrangements.[72]
(10) Contracts relating to accommodation provided by registered social landlords which is not social accommodation,[73] for example accommodation provided to "key workers" (or to other persons who would not have priority or qualify for accommodation under the landlord's normal allocation rules).
(11) Contracts relating to premises intended for transfer.[74]
3.27 As with the list of exceptions to the scheme as a whole, the appropriate authority can amend this list of special cases by order (although the National Assembly for Wales can do so only if it has not made an order under clause 9).[75]
Conversion of standard contracts to secure contracts3.28 It will be realised, from the list set out above, that there are circumstances where community landlords have power to make standard contracts with people who, in the ordinary course of events, might expect to be provided with accommodation under a secure contract. The Bill makes specific provision for the conversion of certain standard contracts into secure contracts.[76] There are three situations where this can happen:
(1) supported standard contracts;
(2) probationary standard contracts; and
(3) prohibited conduct standard contracts.Private landlords
3.32 Contracts made by private landlords will be standard contracts unless the landlord gives a notice in writing that the contract is a secure contract.[77]
3.33 A contract adopted by a private landlord continues to be of the same type as it was before the contract was transferred to the landlord.[78]
THE WRITTEN STATEMENT OF THE CONTRACT(1) The whole point of the consumer protection approach is to ensure that both parties have a document setting out their respective rights and obligations.
(2) If the relationship breaks down and court or other dispute resolution proceedings are in contemplation, the written statement is evidence of what the parties agreed.
3.35 The written statement must be provided by the landlord no later than two weeks from the date on which the contract-holder was entitled to take occupation of the premises.[79] The contract-holder also has the right to ask for a further written statement at any time.[80]
Content of occupation contracts3.36 Occupation contracts contain four classes of matters or terms:[81]
(1) key matters;[82]
(2) fundamental terms;[83]
(3) supplementary terms;[84] and
(4) additional terms.In order to be complete, a written statement of the contract must set out all of the above as well as the names of the parties. Key matters
3.37 The key matters are defined as:[85]
(1) the premises;
(2) the effective date;[86]
(3) the amount of rent or other consideration;
(4) the rental periods.[87]
3.38 In the case of standard contracts, it is also a key matter whether the contract is periodic or made for a fixed term.[88] Where the contract is for a fixed term, the key matters include the period of the fixed term.[89] Where a standard contract specifies periods during which the contract-holder is not entitled to occupy the premises, the periods of non-occupation must also be set out as a key matter.[90]
3.39 Key matters are exempt from challenge under the unfair terms regulations[91], because they are "core terms" for the purposes of the Unfair Terms in Consumer Contracts Regulations 1999 (in that they define the main subject matter or relate to the adequacy of the price).[92]
Fundamental terms[93]3.40 The most important terms – the fundamental terms – incorporate fundamental provisions in the Bill.[94] Other important terms – supplementary terms – incorporate supplementary provisions set out in regulations made under powers contained in the Bill.
3.41 A fundamental provision may, with agreement of both parties, not be incorporated as a term, if the effect is to benefit the contract-holder.[95] The parties may also agree that a fundamental provision may be incorporated as a term of the contract with modifications, but again only if the modification operates in favour of the contract-holder.[96] Other fundamental provisions can be omitted or incorporated with modifications if this is a necessary consequence of the parties' omission or modification of a particular fundamental provision.[97]
3.42 The fundamental provisions relating to prohibited conduct, obtaining an agreement by making a false statement, survivorship and the death of the contract-holder cannot be omitted or incorporated with modifications.[98]
(1) Fundamental provisions which apply to all occupation contracts.[99] These include, for example, provisions about the termination of contracts, and conduct which is prohibited by the contract.
(2) Fundamental provisions which apply specifically to secure contracts.[100] These include, for example, a provision allowing for the transfer of a secure contract to a potential successor.[101]
(3) Fundamental provisions which apply specifically to standard contracts.[102] These include, for example, provisions about termination of contracts for serious rent arrears.The detail of these fundamental provisions is discussed, in context, below in Parts 4 to 11.
3.44 Fundamental terms are mandatory statutory provisions and as such are not subject to the unfair terms regulations.[103]
Supplementary terms3.45 In addition to fundamental provisions, the appropriate authority may prescribe supplementary provisions.[104] These deal with all the practical matters that one would expect to find in an occupation contract (for example an obligation on the part of the contract-holder to pay the rent) but which do not need the same degree of legislative backing as the fundamental provisions.
3.46 Before prescribing a supplementary provision, the appropriate authority must have regard to whether, assuming it was incorporated into the contract as a term without modification, it would be fair for the purposes of the unfair terms regulations.[105] If the provision is incorporated into the contract unmodified, it will not be subject to the unfair terms regulations.[106]
3.47 The parties are free to agree that a supplementary provision should not be incorporated as a term.[107] They may also agree to incorporate the provision with modifications.[108] If they do so, the resulting term may be subject to challenge as unfair. If the term is held to be void or invalid (under the unfair terms regulations or for any other reason), the contract is treated as incorporating the provision without modification.[109]
Additional terms3.48 These are any other express terms of the contract.[110] Additional terms must be fair and transparent, in accordance with our consumer protection approach.
Model contracts3.50 The Bill provides that the appropriate authority may prescribe model contracts as it sees fit.[111] Where a landlord adopts the relevant model contract, it is not essential for the landlord to provide a personalised version of the whole agreement. Completion of a front page sheet setting out the key matters and a written statement of any additional terms will suffice. The precise form of the model contracts, and any other explanatory material, will be prescribed by the appropriate authority. Two illustrative model contracts are provided in Appendix B.
3.51 The Bill gives the power to the appropriate authority[112] to prescribe model contracts for different descriptions of occupation contracts as it sees fit. The following are descriptions of contracts that the appropriate authority may wish to prescribe:
(1) secure – community landlord;
(2) secure – private landlord;
(3) standard – periodic;
(4) standard – fixed term (less than seven years);
(5) standard – fixed term (seven years or more);
(6) standard – supported.Contents of model contracts
3.53 A model contract for an occupation contract of a particular description is a written statement that:
(1) incorporates as fundamental terms without modification all the fundamental provisions[113] applicable to a contract of that description; and
(2) incorporates as supplementary terms without modification all the supplementary provisions applicable to a contract of that description which have been prescribed by regulations.[114]Landlords' own contracts ENFORCEMENT
(1) No term of the occupation contract is enforceable against the contract-holder until the written statement has been provided, or, if earlier, the effective date.[115] Thus until the written statement is provided (or the contract-holder becomes entitled to occupy the premises), the contract works only one way.
(2) Until the written statement is provided, the contract-holder may, by notice given to the landlord, terminate the contract before the effective date.[116] On giving such notice, the contract-holder ceases to have any liability under the contract, and is entitled to the return of any deposit, rent or other consideration that may have been paid.[117]
(3) The contract-holder may apply to the court for a declaration as to the terms of the contract. The court may attach a statement of the occupation contract to its declaration, or order the landlord to provide a written statement.[118]
(4) Unless the failure to provide the written statement is the fault of the contract-holder, the contract-holder is entitled to compensation. The amount of compensation is a payment equivalent to each day's rent,[119] starting with the date on which the contract-holder's right to occupy began and ending on the day when the written statement was provided. This is subject to a maximum amount, the equivalent to two months' rent.[120] The contract-holder may seek enhanced compensation (up to double) from the court, where they can prove that the refusal of the landlord to provide the written statement was wilful.[121] Because this right to compensation does not arise until the expiry of a period of two weeks starting with the effective date, while the right to terminate early (referred to in sub-paragraph (2)) is only available before the effective date, these remedies are mutually exclusive.
(5) If the written statement is either incomplete, or incorrect, the contract-holder has the right to apply to the court for a declaration.[122] The contract-holder may also ask the court to order compensation to be paid, where the court finds that the failure to complete or the incorrectness was the result of wilful default by the landlord.[123] The contract-holder can apply to the court for an order increasing the amount of compensation.
(6) Where compensation is to be paid, the contract-holder may obtain satisfaction by setting off the compensation owed against rent.[124]Procedural sanction
3.56 In addition, where the landlord under a standard contract fails to provide a written statement of the contract, we recommend a procedural sanction. This will delay the ability of the landlord to take advantage of the notice-only ground for possession. Thus, where a landlord fails to provide a written statement of the agreement within two weeks from the effective date, they will not be able to make a claim for possession until six months after the date on which the written statement of the contract is provided to the contract-holder.[125]
MODIFYING AND VARYING THE CONTRACT Modification3.57 We have discussed above the circumstances in which fundamental and supplementary provisions may be incorporated as terms of the contract with modifications.[126]
Variation3.58 In addition the Bill provides that terms in a contract, once agreed and operative, may be varied.[127] This will be important in many cases, particularly with secure contracts. Apart from anything else, landlords will want to ensure rent levels can be adjusted to match inflation. But there may be other reasons why it becomes necessary to amend the contract. The Bill contains detailed provisions for varying the terms not only of secure contracts, but also periodic and fixed term standard contracts.[128]
Secure contracts3.59 The terms of secure contracts cannot be varied, save as provided for by the Bill.[129]
KEY MATTERS – RENT3.60 The landlord may vary the rent by giving at least two months' notice,[130] stating the new rent.[131] The notice must specify a date on which the new rent is to take effect. The first notice of increase may specify any date.[132] Subsequent notices must specify a date which is not less than one year after the last date on which a new rent took effect.[133]
FUNDAMENTAL TERMS3.61 Fundamental terms may be varied by agreement between the landlord and the contract-holder, so long as the result of the variation is not to reduce the degree of protection afforded to the contract-holder as compared with the fundamental provision which the term incorporates.[134] For example, a landlord may vary the terms so as to exclude one or more of the grounds on which possession proceedings may be taken.
3.62 This does not apply:[135]
(1) to the fundamental terms relating to prohibited conduct;[136]
(2) to the fundamental term which prohibits the making of false statements to secure the occupation contract;[137]
(3) to the fundamental terms on survivorship;[138]
(4) to the fundamental terms relating to the death of the contract-holder.[139]SUPPLEMENTARY AND ADDITIONAL TERMS
3.64 Supplementary and additional terms can also be varied by agreement between the landlord and the contract-holder.[140]
3.65 Further, these terms may be varied after the landlord has given notice to the contract-holder.[141] This must be preceded by a preliminary notice, which gives details of the proposed variation, and time for the contract-holder to comment.[142]
3.66 The notice of variation must specify the variation and the date on which it is to take effect.[143] The landlord must also provide the contract-holder with such information as the landlord considers necessary to explain the nature and effect of the variation.[144] Under our consumer protection approach, varied terms could be challenged for unfairness.
3.67 A written statement, either of the variation itself, or of the whole occupation contract as varied, must be provided within two weeks of the date of the variation of the contract.[145]
Standard contracts3.68 Similar provisions enable the terms of both periodic standard contracts[146] and fixed term standard contracts to be varied.[147] This is subject to the over-riding provision that certain terms of an occupation contract cannot be varied.[148]
3.70 Where a fixed term standard contract expires, it is deemed to become a periodic standard contract by operation of law.[149] In this case, the relevant rent variation terms apply to the new periodic contract.[150]
Variation by Act of Parliament3.71 The terms of any occupation contract may also, of course, be varied by or as a result of any enactment.[151] Our contracts provide a way for Parliament to respond to emerging public concerns in a flexible and straightforward way. For example, though this is currently not the case, it might be envisaged that one day a Government might wish to make the installation of a fire alarm a term of any occupation contract. This provision allows this to be achieved by statutory amendment.
Enforcement3.72 Given the importance of the landlord providing the contract-holder with a written statement of any variation, the Bill provides for the payment of compensation for failure to do this, on bases similar to those provided for failure to provide a written statement of the contract.[152]
CONVERSION OF EXISTING TENANCIES AND LICENCES TO OCCUPATION CONTRACTS(1) On the day on which the new regime comes into effect – the appointed day - existing tenancies or licences that are secure, assured, assured shorthold or other defined forms of tenancies cease to be such. Any such tenancy or licence due to come into effect after the appointed date does not take effect as such but as an occupation contract.[153]
(2) Detailed provisions for the conversion of existing tenancy agreements across to the new scheme are set out in schedule 8.
Note 1 Our recommendations for the rationalisation of the rules on security are discussed below in Part 4. [Back] Note 2 If the agreement constitutes a licence it falls outside the scheme. [Back] Note 3 Essentially, they must be local authorities: Housing Act 1985, s 80. [Back] Note 4 They must occupy the premises as their only or principal home: Housing Act 1985, s 81. [Back] Note 5 The written agreements or occupation contracts were discussed in Parts 7 and 8 of Renting Homes (2003) Law Com No 284. [Back] Note 6 Cl 1(1). In Renting Homes (2003) Law Com No 284 this was called the occupation agreement. [Back] Note 7 It will be possible for a landlord to bring a tenancy or licence in relation to which there is no consideration within the scheme by giving the occupier notice: see sch 1 para 1(2). [Back] Note 8 The Bill specifically provides that any requirements in the Land Registration Act 2002 for tenancies must be satisfied: cl 217. Nothing in the Bill prevents the creation of leases, though long leases are outside the scope of the scheme: see below at para 3.14. [Back] Note 9 Paras 3.10 to 3.12. [Back] Note 12 A phrase interpreted by the courts to mean that there must be an agreement which satisfied the criteria for the creation of a tenancy. The most important restatement of these rules was made by the House of Lords in Street v Mountford [1985] AC 809. Land law purists argued that their interpretation was not in strict accord with the law as previously understood. The new concept is designed to avoid these problems. [Back] Note 14 The individual must be at least 16 years old: cl 1(5). [Back] Note 15 Cl 1(4). In Renting Homes (2003) Law Com No 284 we referred to the contract-holder as the occupier. [Back] Note 17 Cl 1(3). A contract made exclusively with a company could still be an occupation contract if it is confers the right to occupy premises as a home on an individual and the landlord gives notice that the contract is to be an occupation contract. See sch 1 para 1(1) and para 2. [Back] Note 19 A landlord who wishes to impose this requirement will be able to do so in the agreement. A contract-holder who has more than one occupation contract is then in breach of the agreement and liable to face proceedings for possession. But as the purpose of the scheme is to ensure that all contract-holders are informed about their contractual rights and obligations, there is no statutory rule preventing more than one contract from falling within the scope of the scheme. [Back] Note 20 See below, at paras 3.13 to 3.17. [Back] Note 21 Sch 1 para 3(1). [Back] Note 23 Renting Homes 1: Status and Security (2002) Law Commission Consultation Paper No 162; and Renting Homes 2: Co-occupation, Transfer and Succession (2002) Law Commission Consultation Paper No 168. [Back] Note 28 Discussed above, at para 3.10. See sch 1 para 3(2) and see cl 1(5). If a contract is made with a number of people, some over 16, others under 16, the contract will be within the scheme but only those over 16 will be contract-holders. A contract made with someone who is under 16 may become an occupation contract when that person reaches 16 (cl 203). [Back] Note 29 Sch 1 para 3(3)(f) and para 4. In essence these are leases for more than 21 years. We have not made special provision for long leases in our draft Bill but we anticipate that appropriate provision will be made if and when the Bill is taken forward by Government. [Back] Note 30 Sch 1 para 3(3)(c). For the power for the appropriate authority to bring these into the scheme, see cl 221. [Back] Note 31 Sch 1 para 3(3)(b). For the power for the appropriate authority to bring these into the scheme, see cl 222. [Back] Note 32 Sch 1 paras 3(3)(d) and (e). [Back] Note 33 Sch 1 para 3(3)(a). [Back] Note 34 Sch 1 paras 3(3)(g) and 5. This is accommodation for a period of 24 hours or less provided by a community landlord or registered charity. [Back] Note 35 Sch 1 para 1(1). [Back] Note 36 Sch 1 paras 1(1) and 2. [Back] Note 37 Sch 1 para 6(2)(a). Further consideration may need to be given to whether this exclusion ensures that “time-share” agreements fall outside the scope of the scheme. [Back] Note 38 Sch 1 paras 6(2)(b) and 7. [Back] Note 39 Sch 1 paras 6(2)(c) and 8. [Back] Note 40 Sch 1 paras 6(2)(d) and 9. [Back] Note 41 Sch 1 paras 6(2)(e) and 10. This recasts and narrows the present law relating to resident landlords. [Back] Note 42 Sch 1 paras 1(3) and 6(3). [Back] Note 43 Sch 1 para 11(1). [Back] Note 45 This is either a community landlord which is a registered social landlord or a private landlord: sch 1 para 12(5) and cl 226. [Back] Note 46 Sch 1 paras 12(2) to (4). [Back] Note 47 Sch 1 paras 13 and 14. Supported housing is discussed further in Part 10. [Back] Note 49 Cl 2. These labels replace the “Type 1” and “Type 2” labels proposed in Renting Homes (2003) Law Com No 284. We discuss below the requirements relating to the use of each contract type: paras 3.22 to 3.33. [Back] Note 50 We discuss issues relating to security of tenure in Part 4. [Back] Note 53 Cls 3(3) and (4). See also cl 27(2)(c). [Back] Note 54 This term, rather than “social landlords” which was used in Renting Homes (2003) Law Com No 284, is the one used in the Bill. Community landlords are defined at cl 226. [Back] Note 57 Cls 4(2) to (5). Similar exceptions apply where an occupation contract, which is a standard contract, is adopted by a community landlord: cls 5(4) to (7). A fifth exception is where a fixed term standard contract for which a premium was paid is adopted by a community landlord and the contract-holder chooses to have it remain a fixed term standard contract. In addition, a sub-occupation contract transferred to a community landlord will continue as a standard contract: cl 5(2). [Back] Note 58 Cl 4(2)(c). The requirement for a written notice is set out in cl 6. If, despite the notice, the landlord gives the contract-holder a written agreement that is not relevant to a standard contract but only to a secure contract, the landlord may apply to the court to rectify the error: cl 33. [Back] Note 60 Cl 4(3). The power of the court is set out in cl 59. “Prohibited conduct” is discussed below in Part 9. [Back] Note 61 Cl 4(4). A periodic standard contract will arise at the end of a fixed term standard contract if the contract-holder remains in occupation after the end of the term: cl 165(2). [Back] Note 62 Cl 4(5). Such contracts are implied by cl 202. [Back] Note 64 Sch 2 para 1. The circumstances in which this can happen are set out at para 3.15 above. [Back] Note 65 Sch 2 para 2. These contracts are discussed in more detail below in Part 10. [Back] Note 67 Under part 6 of the Immigration and Asylum Act 1999. See sch 2 para 4. [Back] Note 69 Sch 2 para 6. Most occupation contracts for the homeless fall outside the scheme unless the criteria set out here are satisfied. See also above, at para 3.16. [Back] Note 70 Sch 2 paras 7 to 9. [Back] Note 72 Sch 2 paras 11 to 14. [Back] Note 78 Cls 10(2) and (3). [Back] Note 79 Cls 24(1) and 235. [Back] Note 80 Cl 24(3). The landlord may make a reasonable charge for providing a copy in response to such a request: cl 24(4). The written statement must be provided within two weeks of the date of the request or, where a charge is made, the date on which the contract-holder pays the fee: cl 24(5). [Back] Note 83 As defined in cls 11 and 14 to 18. [Back] Note 84 These may be prescribed by the appropriate authority: cl 21. If so, they are deemed compliant with the unfair terms regulations (this term is defined in para 1.36 above): cl 23(1). [Back] Note 86 The effective date is the date on which the contract-holder is entitled to begin occupying the premises to which the contract relates: cl 235. [Back] Note 87 Rental period is the period in respect of which a rent payment falls to be made, eg a week or a month: cl 238. [Back] Note 90 Cl 27(2)(c): the reason for this provision is explained at para 3.21. The ways in which this term may be expressed are set out in cl 3(4). [Back] Note 91 This term is defined in para 1.36 above. [Back] Note 92 See the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No 2083) reg 6(2). [Back] Note 93 In Renting Homes (2003) Law Com No 284 we referred to these as “compulsory-minimum” and “special” terms. [Back] Note 94 See also cl 20. [Back] Note 95 Cl 11(2). Eg the parties may agree that the landlord will not use one of the available grounds for possession, and thus omit that ground from the terms of the contract. [Back] Note 97 Cl 12. For example, if the fundamental term incorporating the fundamental provision allowing for mandatory possession on the grounds of serious rent arrears (cl 187) was omitted from a standard contract, the fundamental term incorporating the provision restricting the use of that possession ground (cl 188) would also have to be omitted. [Back] Note 98 Cl 11(4). The terms are considered further below in Part 9 (prohibited conduct) and at paras 11.2 and 11.3 (obtaining a contract by deception), paras 7.4 to 7.7 (survivorship) and paras 4.15 to 4.17 (death of contract-holder). [Back] Note 103 Cl 13 and the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No 2083), reg 4(2). [Back] Note 104 Cl 21(2), read together with cls 228 and 238. In Renting Homes (2003) Law Com No 284 these were described as “default” terms. [Back] Note 105 Cl 23(2): a provision that was manifestly unfair would be challengeable by way of judicial review. [Back] Note 107 Cl 21(3). In this case the written statement must contain a statement to this effect: cl 25(3)(b). This is to avoid subsequent arguments about whether the term was included in the agreement or not. [Back] Note 110 Cls 25(2)(d) and (5). [Back] Note 112 The Secretary of State, or the National Assembly for Wales: cl 228. [Back] Note 113 Fundamental provisions are considered above, at paras 2.12 and 3.40 to 3.44. [Back] Note 114 Supplementary provisions are considered above, at paras 2.13 and 3.45 to 3.47. [Back] Note 115 Cl 28. The effective date is defined in cl 235. [Back] Note 116 We did consider whether in every case there should be a cooling off period before an occupation contract could come into effect. Although this is a feature of some branches of consumer law, we concluded that in this context it would be impractical, not least because there are occasions where a contract needs to be concluded quickly. [Back] Note 117 Cl 156(3). These rules do not affect any rights under the Consumer Protection (Distance Selling) Regulations 2000 (SI 2000 No 2334): cl 152(1)(b). [Back] Note 119 Cls 34(1) and (2). [Back] Note 121 Cls 34(3) and (5). [Back] Note 122 Cls 31 and 32. [Back] Note 123 Cls 31(9), 32(7) and 34(4). [Back] Note 125 Cls 177(1) and (2). [Back] Note 126 Paras 2.15 to 2.19, 3.41 and 3.47. [Back] Note 127 “Variation” includes the addition and removal of terms: cl 93. [Back] Note 128 Rented Homes Bill Part 3, Ch 1. [Back] Note 135 Cl 81(2). This is similar to the rule relating to the modification of fundamental provisions: see above, at para 3.41. [Back] Note 136 As defined in cl 51. Prohibited conduct is discussed below in Part 9. [Back] Note 142 Cls 82(2) and (3). [Back] Note 145 Cls 83(1) and (2). [Back] Note 147 Cls 89 and 90. [Back] Note 148 See above, at paras 2.17 and 3.62. [Back] Note 150 Cl 165(4) provides that the fundamental provisions applicable to periodic standard contracts are incorporated as terms of the new contract without modification. [Back] Note 151 Cls 79(b), 84(b) and 89(1)(b). [Back] Note 153 Cls 218 and 219. Special arrangements have been made in relation to agreements falling within the Rent Act 1977 (cl 221) and the Rent (Agriculture) Act 1976 (cl 222). The reasons for this are discussed above, at paras 2.5 and 2.6. [Back]
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