Welfare Reform and Work Bill (HL Bill 86)

(2) If—

(a) the tenancy of particular social housing comes to an end after part of a
relevant year has elapsed, or

(b) this section ceases to apply in relation to the tenancy of particular social
5housing after part of a relevant year has elapsed,

the requirement in subsection (1) has effect in relation to the part of the relevant
year falling before that time with a proportionate reduction in the maximum
amount of rent payable to the registered provider by the tenant.

(3) The amount of rent payable to the registered provider by the tenant in respect
10of the 12 months preceding the first relevant year is to be treated for the
purposes of subsection (1) as having been the greater of the following
amounts—

(a) the amount of rent that would have been payable in respect of those 12
months if the rate of rent applicable at the beginning of 8 July 2015 had
15applied during those 12 months, and

(b) if the Secretary of State consents to the use by the registered provider of
a different day (“the permitted review day”), the amount of rent that
would have been payable in respect of those 12 months if the rate of
rent applicable at the beginning of the permitted review day had
20applied during those 12 months.

(4) A consent given for the purposes of subsection (3) may be a consent given for
a particular case or for a description of cases.

(5) If a tenancy existing in the first relevant year began at or before the beginning
of 8 July 2015 but less than 12 months before the beginning of the first relevant
25year, the tenancy is to be treated for the purposes of subsection (1) as having
begun at least 12 months before the first relevant year (and subsection (3) is to
have effect accordingly).

(6) For the purposes of this section a relevant year, in relation to a registered
provider, is—

(a) 30in the case of a private registered provider whose practice as regards
the greater number of its tenancies is to change rent payable no more
than once a year and with effect from a single date other than 1 April
(“the review date”)—

(i) a year beginning on the first review date to occur after 1 April
352016, or

(ii) a year beginning on the first, second or third anniversary of that
date;

(b) in any other case, a year beginning on 1 April 2016, 1 April 2017, 1 April
2018 or 1 April 2019.

(7) 40For the purposes of subsection (6), a private registered provider’s practice as
regards its tenancies is to be determined by reference to its practice as regards
the tenancies of its social housing in the year ending with 31 March 2016 (and
a private registered provider which has no tenancies of its social housing in
that year is to be regarded as having no practice as regards its tenancies).

(8) 45A private registered provider whose practice is as described in subsection
(6)(a) is to be regarded as having complied with the preceding subsections if it
treats tenants in its social housing as if its relevant years were the years
mentioned in subsection (6)(b).

(9) This section is subject to—

(a) section 26 (provision about excepted cases);

(b) Schedule 2 (further provision about social housing rents).

22 Exceptions

(1) Section 21 does not apply in relation to a tenant of social housing if—

(a) 5the accommodation is low cost home ownership accommodation;

(b) the accommodation is both low cost rental accommodation and low
cost home ownership accommodation (see section 71 of the Housing
and Regeneration Act 2008).

(2) Section 21 does not apply in relation to social housing of a registered provider
10if, where the registered provider’s interest in the property that consists of or
includes the social housing is subject to a mortgage—

(a) the mortgagee is in possession of the interest in the property or the part
of the property that includes the social housing, in the exercise of the
mortgagee’s powers to enforce the mortgage,

(b) 15a receiver has been appointed in relation to the interest in the property
or the part of the property that includes the social housing by—

(i) the mortgagee, in the exercise of the mortgagee’s powers to
enforce the mortgage, or

(ii) the court, in connection with enforcing the mortgage,

20and that appointment is in force, or

(c) a person has been appointed by the mortgagee, in the exercise of the
mortgagee’s powers to enforce the mortgage (including, in the case of
a floating charge which relates to the interest in the property, the power
under paragraph 14 of Schedule B1 to the Insolvency Act 1986), to
25exercise powers that include a power to sell or otherwise dispose of the
interest in the property or the part of the property that includes the
social housing and that appointment is in force.

(3) If—

(a) a registered provider’s interest in property that consists of or includes
30social housing was made subject to a mortgage, and

(b) the interest in the property, or the interest in the part that includes the
social housing, is sold or otherwise disposed of after the coming into
force of section 21 by—

(i) the mortgagee, in the exercise of the mortgagee’s powers to
35enforce the mortgage,

(ii) a receiver appointed by the mortgagee or by the court as
described in subsection (2)(b), or

(iii) a person appointed by the mortgagee as described in subsection
(2)(c),

40section 21 ceases to apply in relation to that social housing at the time of that
sale or other disposal.

(4) In subsections (2) and (3)—

• “mortgage” includes a charge or other security;

• “mortgagee” includes a person who is entitled to take steps to enforce a
  45charge or other security.

(5) The Secretary of State may by regulations provide for section 21 not to apply in
cases prescribed by the regulations.

(6) Regulations under subsection (5) may in particular make provision about—

(a) tenants of a description prescribed by the regulations;

(b) tenancies of a description prescribed by the regulations;

(c) accommodation of a description prescribed by the regulations;

(d) 5accommodation which satisfies conditions prescribed by the
regulations, including conditions relating to the funding of its building
or refurbishment;

(e) events of a description prescribed by the regulations.

(7) Regulations made by virtue of subsection (6)(a) may include provision about
10tenants whose income exceeds, or whose household’s incomes exceed, an
amount prescribed by the regulations during a period prescribed by the
regulations.

(8) Regulations made by virtue of subsection (6)(e) may include provision about
periods during a tenancy when the rent payable is temporarily reduced or
15waived.

(9) Regulations under this section must be made by statutory instrument.

(10) A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

23 Exemption of a registered provider of social housing

(1) 20The regulator may issue a direction mentioned in subsection (2) in respect of a
private registered provider if—

(a) the condition in subsection (4) or (5) is satisfied, and

(b) the Secretary of State consents.

(2) The directions are—

(a) 25a direction that section 21 does not apply in relation to a private
registered provider specified in the direction;

(b) a direction that section 21 is to have effect in relation to a private
registered provider specified in the direction as if in section 21(1) for “at
least 1% less than” there were substituted “no more than”;

(c) 30a direction that section 21 is to have effect in relation to a private
registered provider specified in the direction as if section 21(1) required
at least the lesser reduction specified in the direction;

(d) a direction that section 21 is to have effect in relation to a private
registered provider specified in the direction as if section 21(1) required
35the private registered provider to secure that the amount of rent
payable by a tenant of their social housing increased by no more than
the percentage specified in the direction.

(3) The regulator may specify in a direction—

(a) the period during which it is to have effect, and

(b) 40the social housing in relation to which it is to have effect.

(4) The condition in this subsection is that the regulator considers that complying
with section 21 would jeopardise the financial viability of the private registered
provider.

(5) The condition in this subsection is that the circumstances of the private
registered provider satisfy requirements prescribed in regulations made by the
Secretary of State.

(6) The regulator may publish a document about the measures that the regulator
5considers could be taken by a private registered provider to comply with
section 21 and to avoid jeopardising its financial viability.

(7) The Secretary of State may issue a direction mentioned in subsection (8) in
respect of a local authority if the condition in subsection (10) or (11) is satisfied.

(8) The directions are—

(a) 10a direction that section 21 does not apply in relation to a local authority
specified in the direction;

(b) a direction that section 21 is to have effect in relation to a local authority
specified in the direction as if in section 21(1) for “at least 1% less than”
there were substituted “no more than”;

(c) 15a direction that section 21 is to have effect in relation to a local authority
specified in the direction as if section 21(1) required at least the lesser
reduction specified in the direction;

(d) a direction that section 21 is to have effect in relation to a local authority
specified in the direction as if section 21(1) required the authority to
20secure that the amount of rent payable by a tenant of their social
housing increased by no more than the percentage specified in the
direction.

(9) The Secretary of State may specify in a direction—

(a) the period during which it is to have effect, and

(b) 25the social housing in relation to which it is to have effect.

(10) The condition in this subsection is that the Secretary of State considers that the
local authority would be unable to avoid serious financial difficulties if it were
to comply with section 21.

(11) The condition in this subsection is that the circumstances of the local authority
30satisfy requirements prescribed in regulations made by the Secretary of State.

(12) The Secretary of State may publish a document about the measures that the
Secretary of State considers could be taken by a local authority in order to
comply with section 21 and to avoid serious financial difficulties.

(13) Regulations under this section must be made by statutory instrument.

(14) 35A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

24 Enforcement

(1) Part 2 of the Housing and Regeneration Act 2008 is amended as follows.

(2) In section 220 (grounds for giving an enforcement notice to a registered
40provider), after subsection (11) insert—

“(11A) Case 11 is where the registered provider has failed to comply with
section 21 of the Welfare Reform and Work Act 2016.”

(3) In section 227 (grounds for imposing a penalty on a private registered

provider), after subsection (7) insert—

“(7A) Case 7 is where the registered provider has failed to comply with
section 21 of the Welfare Reform and Work Act 2016.”

(4) In section 237 (grounds for requiring a private registered provider to pay
5compensation), after subsection (3) insert—

“(4) Case 3 is where the registered provider has failed to comply with
section 21 of the Welfare Reform and Work Act 2016.”

(5) In section 247 (management tender), in subsection (1), after paragraph (a) (and
before the “or” following it) insert—

“(aa) 10a registered provider has failed to comply with section 21 of the
Welfare Reform and Work Act 2016,”.

(6) In section 251 (appointment of manager of a private registered provider), in
subsection (1), after paragraph (a) (and before the “or” following it) insert—

“(aa) a private registered provider has failed to comply with section
1521 of the Welfare Reform and Work Act 2016,”.

25 Further provision about social housing rents

In Schedule 2—

(a) Part 1 makes further provision about the maximum amount of rent that
registered providers must secure is payable in respect of a relevant year
20or part of a relevant year by a tenant of their social housing in England;

(b) Part 2 contains provision about exceptions, exemptions and
enforcement;

(c) Part 3 contains general provision.

26 Provision about excepted cases

(1) 25The Secretary of State may by regulations make provision about the maximum
amount of rent payable to a registered provider in respect of a relevant year, or
a part of a relevant year, by a tenant of social housing in relation to whom—

(a) section 21 does not apply because of an exception in regulations under
section 22;

(b) 30a provision about levels of rent in Part 1 of Schedule 2 does not apply
because of an exception in regulations under paragraph 5 of that
Schedule.

(2) The Secretary of State may by regulations make provision about the maximum
amount of rent payable to a registered provider by a tenant of social housing—

(a) 35in respect of the part of the relevant year after an exception in
regulations under section 22 ceases to apply;

(b) in respect of the part of the relevant year after an exception in
regulations under paragraph 5 of Schedule 2 ceases to apply;

(c) in respect of the following relevant year (if any).

(3) 40Regulations under subsection (1) or (2) may, in particular, require registered
providers to secure that the maximum amount of rent payable in respect of a
relevant year, or part of a relevant year, is an amount determined as specified
in the regulations.

(4) Regulations under subsection (1) or (2) may make provision about disapplying
or modifying a requirement in the regulations as it relates to a registered
provider.

(5) Regulations made by virtue of subsection (4) may, in particular, enable the
5Secretary of State or the regulator to issue a direction that disapplies or
modifies a requirement as it relates to a registered provider.

(6) Regulations made by virtue of subsection (5) may provide for a direction to
specify—

(a) the period during which it has effect;

(b) 10the social housing in relation to which it has effect.

(7) Regulations made by virtue of subsection (5) may—

(a) provide for conditions to be satisfied before a direction is issued;

(b) provide for the regulator to obtain the consent of the Secretary of State
before issuing a direction.

(8) 15Regulations under subsection (1) or (2) may make provision about the
enforcement of the regulations, including provision applying Part 2 of the
Housing and Regeneration Act 2008 with modifications.

(9) Regulations under this section must be made by statutory instrument.

(10) A statutory instrument containing regulations under this section is subject to
20annulment in pursuance of a resolution of either House of Parliament.

27 Implied terms

(1) A lease or other agreement by virtue of which a person is a tenant of a
registered provider contains, by virtue of this subsection, an implied term
enabling the registered provider to reduce the amount of rent payable by the
25tenant, without giving prior notice, where the reduction is made for the
purpose of complying with a requirement imposed by or under section 21 or
26 or Part 1 of Schedule 2.

(2) Subsection (1) has effect notwithstanding any express provision in a lease or
other agreement.

(3) 30Section 102 of the Housing Act 1985 (variation of terms of a secure tenancy) has
effect subject to subsection (1).

28 Change of registered provider

(1) This section applies if—

(a) particular social housing of a registered provider becomes social
35housing of another registered provider (“the transferee”), and

(b) the social housing is subject to a tenancy that began before the social
housing became the transferee’s social housing.

(2) Sections 21 to 26 and Schedule 2 have effect in relation to the amount of rent
payable by the tenant under the tenancy as if—

(a) 40the transferee’s relevant years were the same as the initial registered
provider’s relevant years, and

(b) rent payable by the tenant before the social housing became the
transferee’s social housing were rent payable to the transferee in
respect of such earlier periods.

(3) Subsection (4) applies if, immediately before the social housing became the
5transferee’s social housing, a requirement imposed by or under section 21 or
26 or Part 1 of Schedule 2 was disapplied or modified as regards the social
housing—

(a) by a direction under section 23 or paragraph 6 of Schedule 2, or

(b) under section 26(4).

(4) 10If the social housing becomes the transferee’s social housing otherwise than at
the beginning of a relevant year of the initial registered provider, the
requirement continues not to apply or continues to apply as modified (as the
case may be) until—

(a) the relevant year of the initial registered provider current when the
15social housing becomes the transferee’s social housing comes to an end,
or

(b) if earlier, the tenancy comes to an end.

(5) In this section a reference to a relevant year of an initial registered provider
includes, in the case of an initial registered provider that has ceased to exist, a
20reference to what would have been a relevant year of an initial registered
provider if it had not ceased to exist.

(6) In this section “initial registered provider”, in relation to a tenancy of social
housing, means the first registered provider which—

(a) was subject to a requirement imposed by or under section 21 or 26 or
25Part 1 of Schedule 2 as regards the tenancy, or

(b) would have been so subject but for its being disapplied—

(i) by a direction under section 23 or paragraph 6 of Schedule 2 or
under section 26(4), or

(ii) by or under section 22 or paragraph 5 of Schedule 2.

29 30Transitional provision

(1) This section applies if, immediately before the rent restriction period ends—

(a) a lease or other agreement by virtue of which a person is a tenant of a
registered provider contains provision under which rent will or may be
increased with effect from a date or dates specified in the lease or other
35agreement (“rent review dates”), and

(b) the registered provider is subject to a requirement imposed by or under
section 21 or 26 or Part 1 of Schedule 2 as regards the tenant.

(2) The lease or other agreement contains, by virtue of this subsection, an implied
term enabling the registered provider to treat a date that falls—

(a) 40after the rent restriction period ends, and

(b) before the first rent review date to occur after the rent restriction period
ends,

as if that date were the first rent review date to occur after the rent restriction
period ends (instead of the date provided for in the lease or other agreement).

(3) 45Subsection (4) applies if, under the provision mentioned in subsection (1)(a),
the intervals between rent review dates may only be intervals of 51 weeks or
more.

(4) The lease or other agreement contains, by virtue of this subsection, an implied
term enabling the registered provider, if it acts as mentioned in subsection (2),
to treat the relevant date as if it were the second rent review date to occur after
the rent restriction period ends (instead of the date provided for in the lease or
5other agreement).

(5) In subsection (4) “the relevant date” means the date that precedes the second
rent review date by the same period as the date treated under subsection (2) as
the first rent review date precedes the first rent review date provided for in the
lease or other agreement.

(6) 10The lease or other agreement contains, by virtue of this subsection, an implied
term requiring the registered provider, if it acts as mentioned in subsection (4),
to treat the date that precedes each subsequent rent review date by the same
period as if it were that subsequent rent review date (instead of the date
provided for in the lease or other agreement).

(7) 15The lease or other agreement contains, by virtue of this subsection, an implied
term providing that, if the registered provider treats an earlier date as if it were
a rent review date because of a term implied by subsection (2), (4) or (6), other
provision in the lease or other agreement is to have effect accordingly.

(8) Nothing in this section prevents the registered provider and the tenant varying
20or excluding by agreement a term implied by virtue of this section.

(9) Section 102 of the Housing Act 1985 (variation of terms of a secure tenancy) has
effect subject to subsections (2), (4), (6) and (7).

(10) In this section “rent restriction period”, in relation to a tenant of a registered
provider, means the period during which the registered provider might be
25subject to a requirement imposed by or under section 21 or 26 or Part 1 of
Schedule 2 as regards the tenant.

30 Rent standards

Sections 194(2A) and 198(3) of the Housing and Regeneration Act 2008 (the
powers of the regulator to set and revise standards relating to levels of rent) are
30subject to sections 21 to 23, 26 and 28 and Schedule 2.

31 Interpretation

(1) In sections 21 to 30, this section and Schedule 2—

• “affordable rent” and “affordable rent housing” have the meaning given
  by Schedule 2;

• 35“local authority” has the same meaning as in the Housing Associations
  Act 1985;

• “low cost home ownership accommodation” has the meaning given by
  section 70 of the Housing and Regeneration Act 2008;

• “low cost rental accommodation” has the meaning given by section 69 of
  40the Housing and Regeneration Act 2008;

• “private registered provider” means a private registered provider of
  social housing (see section 80 of the Housing and Regeneration Act
  2008);

• “registered provider” means a registered provider of social housing (see
  45section 80 of the Housing and Regeneration Act 2008);

• “the regulator” means the Regulator of Social Housing;

Welfare Reform and Work BillPage 28

• “relevant year” has the meaning given by section 21;

• “rent” includes payments under a licence to occupy;

• “service charge” means an amount payable by the tenant of particular
  accommodation as part of, or in addition to, the rent, and which is
  5payable, directly or indirectly, for services, repairs, maintenance,
  improvements or insurance or the landlord’s costs of management;

• “social housing” has the same meaning as in Part 2 of the Housing and
  Regeneration Act 2008 (see sections 68 and 72 of that Act);

• “the social housing rents provisions” means sections 21 to 30, this section
  10and Schedule 2;

• “tenancy” includes a licence to occupy;

• “tenant” includes a person who has a licence to occupy.

(2) In the social housing rents provisions, a reference to the beginning of a tenancy
is a reference to the day on which, under the terms of a lease or other
15agreement, the tenant is entitled to possession under the tenancy, subject to
subsection (3).

(3) For the purposes of the social housing rents provisions, a tenancy of particular
social housing is to be regarded as having been assigned to the tenant under
the following tenancy (and not as coming to an end) where—

(a) 20that tenancy is followed by another tenancy of that social housing and
at least one person is both a tenant under the first tenancy when it
comes to an end and a tenant under the following tenancy when it
begins,

(b) that tenancy gives rise to another person’s statutory or assured tenancy
25of that social housing by virtue of Part 1 of Schedule 1 to the Rent Act
1977 (statutory tenants by succession), or

(c) that tenancy gives rise to another tenancy of that social housing by
virtue of paragraph 13 of Schedule 1 to the Rent Act 1977 (change of
statutory tenant by agreement and with consent of landlord),

30but a tenancy of particular social housing is to be regarded as coming to an end
on being assigned by way of exchange (and the assignee is to be regarded as a
tenant whose tenancy began at that time).

(4) References to the tenant under a tenancy of particular social housing are to be
read in accordance with subsection (3).

(5) 35In the social housing rents provisions, a reference to an amount of rent payable
to a registered provider for social housing—

(a) in the case of social housing that is affordable rent housing and is let at
an affordable rent, includes a reference to an amount payable by way
of service charge, and

(b) 40in the case of other social housing, does not include a reference to an
amount payable by way of service charge.

Final

32 Power to make consequential provision

(1) The Secretary of State may by regulations make such amendments and
45revocations of subordinate legislation (whenever made) as appear to the
Secretary of State to be necessary or expedient in consequence of any provision
of this Act.

(2) In this section “subordinate legislation” has the same meaning as in the
Interpretation Act 1978.

(3) Regulations under this section must be made by statutory instrument.

(4) A statutory instrument containing regulations under this section is subject to
5annulment in pursuance of a resolution of either House of Parliament.

33 Extent

(1) The following provisions of this Act extend to England and Wales, Scotland
and Northern Ireland—

(a) section 1 (full employment: reporting obligation);

(b) 10sections 4, 5 and 6 (life chances);

(c) section 9(2) and (6) (freeze of rates of child benefit for four tax years);

(d) section 10 and paragraph 2 of Schedule 1 (freeze of certain tax credit
amounts for four tax years);

(e) section 11 (changes to child tax credit);

(f) 15section 32, this section, section 34 and section 35.

(2) The following provisions of this Act extend to England and Wales—

(a) section 2 (apprenticeships reporting obligation);

(b) section 3 (support for troubled families: reporting obligation);

(c) sections 21 to 31 and Schedule 2 (reduction in social housing rents).

(3) 20The following provisions of this Act extend to England and Wales and
Scotland—

(a) sections 7 and 8 (benefit cap and review of benefit cap);

(b) section 9(1), (3), (4) and (5) and paragraph 1 of Schedule 1 (freeze of
certain benefits for four tax years);

(c) 25section 12 (changes to child element of universal credit);

(d) section 13 (employment and support allowance: work-related activity
component);

(e) section 14 (universal credit: limited capability for work element);

(f) section 15 (universal credit: work-related requirements);

(g) 30sections 16 to 19 (loans for mortgage interest etc);

(h) section 20 (expenses of paying sums in respect of vehicle hire etc).

34 Commencement

(1) The following provisions of this Act come into force on the day on which it is
passed—

(a) 35section 8(7) and (8);

(b) sections 9 and 10 and Schedule 1;

(c) section 21(3) and (4);

(d) section 23;

(e) paragraphs 6 and 10 of Schedule 2 and section 25, so far as relating to
40paragraphs 6 and 10;

(f) section 32, section 33, this section and section 35.

(2) The following provisions of this Act come into force at the end of the period of
two months beginning on the day on which it is passed—