Provider Homes Managed (Approx)

1. Introduction

1.1 The Housing and Regeneration Act 2008 (“H&RA”)[1] received the Royal Assent 22nd July 2008. It is anticipated that a number of the critical provisions will come into force on 6th April 2009. The current secondary legislation is SI 2008/2358; SI 2008/2831; SI 2008/2839. The H&RA extends to 326 sections and 16 schedules. It introduces major changes as to how social landlords will be regulated. It also includes a number of important amendments to housing law, including the abolition of tolerated trespassers. It also introduces “family intervention tenancies”.

1.2 As a result of government policies over the last thirty years, RSLs are now allocating as much social housing in England as LHAs. Only 210, out of 354 LHAs retain housing stock, much of which is outsourced to Arms Length Management Organisations (ALMOs)[2]:

Provider Homes Managed (approx)

RSLs 1,900,000

LHAs (retained stock) 1,300,000

ALMOs 800,000

1.3 There are now 60 large RSLs, or group structures, each of which manage more than 10,000 homes. These comprise some 55% of RSL stock. However, there are also some 1,165 small RSLs with less than 250 units, often making specialist provision. In 2007, RSLs were building, or acquiring, some 30,000 additional new homes a year, funded in the ratio of £1 of public money to £2 of private finance. In (Weaver) v London & Quadrant Housing Trust [2008] EWHC 1377 (Admin), the Administrative Court held that the RSL was a public authority for the purposes of judicial review and the Human Rights Act 1998 in the management and allocation of its housing stock. An appeal to the Court of Appeal is currently listed for 23rd or 24th February 2009.

1.4 In December 2006, Professor Martin Cave began his independent review of social housing regulation in England. His remit was to establish a clear set of objectives for the regulation of social housing to underpin any new regulatory system. His report, “Every Tenant Matters: A review of social housing regulation” (June 2007) identified three principles for the regulation of social housing[3]:

·  to ensure continued provision of high quality social housing;

·  to empower and protect tenants;

·  to expand the availability of choice of provider at all levels in the provision of social housing.

1.5 Professor Cave concluded that the objective of expanding the supply of social housing is best promoted by the diversity of organisations engaged in ownership and management. His proposed regulatory regime allows such alternative providers to compete on level terms. The choice afforded to tenants should extend to choice of tenure. He noted the current failure to adequately separate policy and regulation leading to the unacknowledged implementation of policy by regulation.

1.6 In a speech to the Fabian Society in February 2008, Caroline Flint, the housing minister, noted that more than half of all households in the social rented sector have no working aged adults employed. She suggested that social housing could be used as part of the government’s welfare to work strategy. Tenants could risk eviction if they failed to find employment.

1.7 A more measured discussion is to be found in “Ends and Means: The Future Roles of Social Housing in England”[4] published by Professor John Hills in February 2007. He suggests the need to move beyond an approach of rationing towards the key question “how can we help you afford decent housing?” Housing should not be seen in isolation from other policy objectives to support people’s livelihoods and to boost the means at their disposals. Choice based lettings and homelessness prevention strategies should be seen in this context.

1.8 A Housing Reform Green Paper was due to be published before the end of 2008. The CLG had indicated that the following issues would be addressed:

·  The high levels of worklessness in social housing;

·  The length of waiting lists;

·  Low social mobility; and

·  Geographic concentrations of deprivation.

1.9 On 7th October, the Chartered Institute of Housing published paper “Rethinking Housing”[5] which supports the controversial proposal of abolishing social tenancies for life. The CIH, in partnership with CLG, have launched an e-forum to debate the issues feeding into the green paper over the coming months. Participants can contribute to the debate at http://housingreform.cih.co.uk.

1.10 On 3rd October, Margaret Beckett was appointed as the 8th Labour housing minister. She has recently distanced herself from suggestions that the CLG were drawing up proposals to end social tenancies for life and subject them to regular reviews of tenants’ financial circumstances. Labour colleagues were furious at remarks attributed to her in an interview in the Times on 10th November. Next day, she stated that she had made no decision on either the content or timing of the green paper. It is probable that this will now slip well into 2009.

2. The Regulation of Social Landlords

2.1 The H&RA creates two new bodies:

(i) The Homes and Communities Agency (HCA); and

(ii) The Office for Tenants and Social Landlords (s.81) which is rather to be known as the Tenant Services Authority (TSA).

2.2 Part I establishes the HCA. It is intended to deliver more social and affordable housing and to promote regeneration in line with the Housing Green Paper “Homes for the Future: more affordable, more sustainable” (July 2007)[6]. It replaces both the Urban Regeneration Agency and the Commission for the New Towns which currently operate under the joint name of English Partnerships. The HCA will also take on certain functions of the Housing Corporation (HC) relating to investment in housing

2.3 Part 2 relates to the regulation of social housing. The Housing Corporation is abolished. Part I of the HA 1996 is amended to restrict the current “registered social landlord” system to Wales. The TSA will regulate “registered providers of social housing” in England which will include current RSLs, together with other bodies who choose to register. Social housing includes both low cost rented accommodation and low cost home ownership with either shared ownership or an equity percentage. The new registered providers may include for-profit organisations. Section 114 makes provision for the TSA to regulate LHAs and ALMOs.

2.4 The current timescale is as follows:

(i) 1st December 2008: The TSA and the HAS will be formally launched. The Housing Corporation will be abolished. The TSA will regulate RSLs within the Housing Corporation’s current regulatory framework.

TSA: Chief Executive - Peter Marsh (formerly deputy chief executive of the Housing Corporation; Chair - Anthony Mayer (formerly Chief Executive of the GLA (2000-8) and the Housing Corporation (1990s)).

HCA: Chief Executive: - Sir Bob Kerslake (former Chief Executive of Sheffield CC); Chair – Robert Napier (currently Chair of English Partnerships)

(ii) December 2008 – July 2008: Consultation with tenants and social landlords on the TSA’s proposed standards and approach to regulation.

(iii) August – November 2009: Statutory Consultation on the new regulatory framework.

(iv) 1st April 2010: The new regulatory framework will come into effect. LHAs will be brought within the new regulatory regime.

2.5 The ten fundamental objectives of the TSA are (s.86):

1. to encourage a supply of good quality social housing;

2. choice and protection for tenants (actual or potential);

3. opportunity for tenants to be involved in management;

4. efficient, effective and economic provision by landlords;

5. social landlords are financially viable and well managed;

6. encourage contribution to the broader well-being of localities;

7. encourage investment in social housing;

8. avoid imposition of unreasonable burden on public funds;

9. to minimise interference and apply principles of good regulation

(“proportionate, consistent, transparent and accountable”);

10. to guard against misuse of public funds.

2.6 The TSA may set standards for registered providers (s193). In setting such standards, the regulator shall have regard to the desirability of registered providers being free to choose how to provide services and conduct business (s.194(3).

2.7 The TSA talk of achieving a level playing field between LHAs and RSLs. It is difficult to see how this can be achieved whilst:

(i) LHAs and RSLs allocate accommodation according to different statutory regimes;

(ii) Tenants occupy their homes under different statutory codes (secure and assured tenancies);

(iii) There remains uncertainty as to whether RSLs are public authorities for the purposes of (a) judicial review; (b) the HRA and (c) equality duties.

There is a real concern that the regulatory tail is wagging the dog of social housing.

3. Killing Off the Tolerated Trespasser

3.1 Section 299 makes provision about possession orders and their effect on secure, assured, introductory and demoted tenancies including provision about the status of existing occupiers. Whilst the section appears straightforward, the devil is in the detail. Schedule 11 extends to 26 paragraphs. It is currently anticipated that this provision will be brought into effect on 6th April 2009. The legislative options were discussed in “Tolerated Trespassers”[7], a consultation paper published by Communities and Local Government (CLG) in August 2007. A “Summary of Responses to the Consultation on Tolerated Trespassers”[8] was published in April 2008. There was general support for legislative change which should be retrospective to address the problem of the growing underclass of tolerated trespassers.

3.2 The H&RA only addresses part of the problem. It does extend to where there has been a change of landlord whilst the occupant has been a tolerated trespasser. Schedule 11 of the Act permits the Secretary of State to make provision for such cases by secondary legislation (para 24). On 25th September, the Secretary of State issued a further consultation paper “Tolerated Trespassers: Successor Landlord Cases”[9] (. Responses are sought by 19th December. It is hoped that any changes could also be implemented by April 2009. The extent of the problem is unclear as is apparent from the following questions which are directed primarily towards RSLs who have been involved in Large Scale Voluntary Transfers:

·  What is the usual practice of successor landlords when dealing with tolerated trespassers? Will tolerated trespassers generally be offered a new tenancy and, if so, what type of tenancy will they be offered? Does this differ from the type of tenancy offered to transferring tenants?

·  In what circumstances would tolerated trespassers not be offered a new tenancy?

·  Is it possible to identify tolerated trespassers who transferred and have not been offered a new tenancy? If so, is it considered that the numbers are likely to be significant or relatively small?

3.3 The legislation is based on the law as it stood in July 2008. On the 8th October, four appeals had been listed for hearing with a time estimate of 6 days:

(i) Knowsley HT v White [2007] EWCA Civ 404; [2007] 1 WLR 2897: the

issue is whether the concept of “tolerated trespasser” has any relevance to the regime of assured tenants under the Housing Act 1988.

(ii) London & Quadrant v Ansell [2007] EWCA 326; [2007] HLR 37 and Porter v Shepherds Bush Housing Association [2008] EWCA Civ 196; [2008] HLR 35: which affirm the concept of the “entrenched tolerated trespasser” established in Marshall v Bradford [2001] EWCA 594 and Swindon BC v Aston [2002] EWCA Civ 1850; [2003] HLR 42. It is to be noted that in each of these cases, the possession order used the template of Form N28 (1993) – see Ansell at [23] and Porter at [5].

(iii) Islington LBC v Honeygan-Green [2008] EWCA Civ 363; [2008] 1 WLR 1350: the consequences of reviving a tenancy under s.85 Housing Act 1985 on a pending “right to buy” application.

3.4 These appeals were duly listed before Lords Hoffmann, Walker, Brown, Mance and Neuberger. The current situation is as follows:

(i) The appeal in Ansell was resolved before 8th October and was not listed. There was a private agreement between landlord and tenant. It is surmised that the landlord agreed to recognise Ms Ansell as a tenant provided that she did not proceed with her appeal.

(ii) The appeal in Porter was settled on the 1st day. The landlord did not resist the appeal accepting that Marshall and Swindon were wrongly decided.

(iii) The appeal in White was heard on 8th and 9th October. Judgment is awaited. It is possible that the House of Lords will decide that the regime of tolerated trespasser has no relevance to assured tenants.

(iv) The appeal in Islington was heard on Monday 13th October. It is understood that their Lordships will address a range of issues relating to tolerated trespassers under Housing Act 1985, including that of the “entrenched tolerated trespasser”. In the light of the concessions made in the Porter appeal, it is probable that their Lordships will rule that that Marshall and Swindon were wrongly decided.

The Solution for the Future

3.5 Schedule 11 amends the relevant legislation to provide that the tenancy ends when the possession order is executed. Up until that date, the contractual relationship between landlord and tenant will continue. This is achieved as follows:

·  Secure Tenancies: Section 82 HA 1985 is amended by para 2 of Schedule 11;

·  Assured Tenancies: Section 5 HA 1988 is amended by para 6.

·  Assured Shorthold Tenancies: Section 21 HA 1988 is amended by para 9.

·  Introductory Tenancies: Section 127 HA 1996 is amended by para 11.

·  Demoted Tenancies: Section 130 HA 1996 is amended by para 13.

3.6 These changes will apply to any possession order made after the commencement date (para 14). However, they will also apply to cases where a possession order was made before the commencement date, provided that the tenancy has not ended pursuant to that order. Thus, they will apply to all cases where there is a subsisting postponed possession order in Form N28A, provided that no date upon which possession is to be surrendered has been subsequently fixed.

3.7 There is also an important amendment to the extended discretion provided in s.85(4) HA 1985 (para 3) and s.9(4) HA 1988 (para 8), to give a court a wider discretion to discharge or rescind a possession order. Currently, that discretion can only be exercised where the tenant has strictly complied with the conditions specified in the order. Thus where a tenant has cleared the arrears of rent, the Court has no discretion to discharge the order if the tenant was late with just one payment (see Marshall). These provisions will apply to all possession orders, whether made before or after the commencement date (para 14(3)).