Tenant’s Rights – An Introduction to Succession, Assignment and Mutual Exchange Neil Lawlor Partner - Devonshires Assignment • Can only be done by Deed as transfer of Land, i.e. – In writing – State on its face it is a Deed – Executed as a Deed Assignment – Secure Tenant • Only possible when to a person entitled to succeed. Assignment - Assured Tenants • s15 Housing Act 1988 imports implied term into all assured periodic tenants that except with consent a tenant cannot: – Assign the tenancy (in whole or in part) • Consent can be refused for any reason (but check terms under Tenancy Agreement) Assignment - General • If assignment made without a landlord’s consent then the landlord could seek possession on breach of that express term. • Where you have release by one joint tenant in their interest in the joint tenancy, this could be construed as assignment. Mutual Exchange • Secure tenants need written consent. • Assured tenants do not need written consent unless subject to a contractual term within tenancy agreement. Mutual Exchange Secure Tenants – Refusal of Consent • Refusal only on Grounds specified under Schedule 3 Housing Act 1985 • Written notice of refusal with reasons must be given within 42 days of tenant’s application. Mutual Exchange Grounds for Refusal – Secure Tenants • See Schedule 3 Housing Act 1985 – Existing Possession Order or Proceedings Started on Grounds 1-6 of Schedule 2 – Size of Property (under-occupation by incoming tenant/unsuitable) – Non-residential or former employee – Landlord is a charity and incoming tenant’s occupation would conflict with aims of charity Mutual Exchange Grounds for Refusal – Secure Tenants (cont’d) • Property adapted for use by those with disabilities. • Incoming tenant does not fit criteria for tenants of that particular scheme. • Property is subject to a management agreement which tenants have to sign up to and incoming tenant is not or not willing to sign up to that agreement. Mutual Exchange • Consent given must be unconditional, unless there is a breach of obligations such as rent arrears. • Can only be completed by Deed of Assignment. Succession • No automatic termination of tenancy on death. • Joint tenancy vests in surviving tenant. • Sole tenancy – need to check if anyone qualifies for succession. • Children under 18 can succeed. • Succession takes place automatically, do not grant new tenancy agreement without seeking legal advice. Succession – Secure Tenants • Any potential successor must occupy the property at the time of death and be either: – The deceased tenant’s spouse – Be another family member – i.e. parent, grandparent, child, sibling, aunt or uncle or a nephew or niece, step-relatives and illegitimate children. • Family members must reside with the tenant for 12 months prior to the date of death. Succession – Secure Tenants • Where more than one relative is entitled to succeed, if tenant married – then spouse will succeed. • If tenant not married, family members will have to agree between them who to succeed. • If no agreement reached – landlord must decide. Succession – Secure Tenants • Succession can happen only once in a tenancy – check history to see no previous succession. • Where no one is qualified to succeed, then tenancy loses its secure status. Succession – Secure Tenants • If there is someone qualified to succeed, then succession happens automatically. • Successor gets tenancy with all the rights and obligations contained within it. Succession – Secure Tenants • Fixed Term Tenancy – where term has not expired, it will continue to have secure status until either: – Confirmed that tenancy won’t be disposed of in family proceedings; – Tenancy actually disposed of as part of the administration of the deceased tenant’s estate. • Once either of the above happens, the tenancy ceased to be secure. Succession – Secure Tenants • If valid succession, then may still be possible to recover possession on other Grounds. – Only or principal home – Ground 16 (Note – NOSP must be served no earlier than 6 months and no later than 12 months from date of death of previous tenant). Succession – Assured Tenants • Potential successor must have occupied as only or main home immediately before tenant died. • Successor must be a spouse. • Check tenancy terms – may be provision for family members to succeed at discretion of landlord. Succession – Assured Tenants • No right to succeed if succession has already taken place. • If someone qualified to succeed, it happens automatically. Succession – Assured Tenants • If no-one qualified to succeed: – Check if there’s a will – if provides for someone to inherit tenancy, then only one year from death of former tenant to serve NOSP on Ground 7. – If not, then loses status and can be ended by Notice to Quit (copy needs to be served on Public Trustees). Non-Occupation • Parting with possession of the whole of the property • Serve NTQ – tenancy terminates upon expiry. Subletting of Whole of Premises • Subletting whole of Premises – tenants lose security of tenure. • Serve NTQ and without prejudice NOSP on breach of tenancy by subletting. • Issue proceedings on NTQ and alternative breach by subletting and non-occupation Lodgers • Secure tenants have absolute right to take in lodgers. • Lodger vs. sub-tenant. • Consent needed by tenant to sublet but landlord cannot refuse unreasonably and reasons must be provided.
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