Welfare Reform and Work Bill (HL Bill 92)

Welfare Reform and Work BillPage 37

(4) If the tenancy begins after the beginning of the first relevant year, the
registered provider must secure that—

(a) the maximum amount of rent payable to the registered provider by
the tenant in respect of the part of the relevant year falling after the
5tenancy begins, where the tenancy begins after part of a relevant year
has elapsed,

(b) the maximum amount of rent payable to the registered provider by
the tenant in respect of the following relevant year, where the
tenancy begins as described in paragraph (a), or

(c) 10the maximum amount of rent payable to the registered provider by
the tenant in respect of the relevant year, where the tenancy begins
at the beginning of a relevant year,

is the amount that would be payable if the social rent rate applied during
that period.

(5) 15If—

(a) the tenancy comes to an end after part of a relevant year to which
sub-paragraph (3) or (4) applies has elapsed, or

(b) sub-paragraph (3) or (4)(a), (b) or (c) ceases to apply in relation to the
tenancy after part of the relevant year in question has elapsed,

20sub-paragraph (3) or (4) 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.

Tenancy of affordable rent housing

3 (1) This paragraph applies in relation to a tenant of social housing in England
25if—

(a) the tenancy begins after the beginning of 8 July 2015, and

(b) the accommodation is affordable rent housing (see paragraph 4).

(2) If the tenancy begins before or at the beginning of the first relevant year, the
registered provider must secure that the maximum amount of rent payable
30to the registered provider by the tenant in respect of the first relevant year is
the higher of—

(a) the amount found by—

(i) determining the rate of the market rent for that social housing
when the tenancy begins, and

(ii) 35determining the amount that is 80% of the amount that
would be payable in respect of a year if that rate had applied
during the year, and

(b) the amount that would be payable in respect of the first relevant year
if the tenant were paying rent at the social rent rate.

(3) 40If the tenancy begins after the beginning of the first relevant year, the
registered provider must secure that—

(a) the maximum amount of rent payable to the registered provider by
the tenant in respect of the part of the relevant year falling after the
tenancy begins, where the tenancy begins after part of a relevant year
45has elapsed, or

(b) the maximum amount of rent payable to the registered provider by
the tenant in respect of the relevant year, where the tenancy begins
at the beginning of a relevant year,

Welfare Reform and Work BillPage 38

is the higher of the amounts described in sub-paragraph (4).

(4) The amounts referred to in sub-paragraph (3) are—

(a) the amount found by—

(i) determining the rate of the market rent for that social housing
5when the tenancy begins,

(ii) determining the amount that is 80% of the amount that
would be payable in respect of a year if that rate had applied
during the year, and

(iii) (if necessary) reducing that amount in proportion to the part
10of that relevant year that elapsed before the tenancy begins,
and

(b) the amount that would be payable in respect of the period in
question if the tenant were paying rent at the social rent rate.

(5) If the tenancy begins after the beginning of the first relevant year and not at
15the beginning of the second or third relevant year, the registered provider
must secure that the maximum amount of rent payable to the registered
provider by the tenant in respect of the relevant year following the one in
which the tenancy begins is the amount found under sub-paragraph (2) or
(3) (disregarding the proportionate reduction) reduced by 1%.

(6) 20If—

(a) the tenancy comes to an end after part of a relevant year to which
sub-paragraph (2), (3) or (5) applies has elapsed, or

(b) sub-paragraph (2), (3) or (5) ceases to apply in relation to the tenancy
after part of the relevant year in question has elapsed,

25sub-paragraph (2), (3) or (5) 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.

(7) The market rent is to be determined using a RICS valuation method.

4 (1) This paragraph has effect for the purposes of paragraph 3.

(2) 30Affordable rent housing is accommodation identified by regulations made
by the Secretary of State as accommodation that may be let as social housing
at an affordable rent.

(3) Regulations under sub-paragraph (2) may, in particular, make provision for
identifying accommodation that may be let as social housing at an
35affordable rent by reference to an agreement or arrangement relating to the
provision of social housing by a registered provider.

(4) Regulations made by virtue of sub-paragraph (3) may, for example, make
provision by reference to—

(a) an agreement relating to the exercise of a power under section 5 or 19
40of the Housing and Regeneration Act 2008 (powers of the Homes and
Communities Agency as regards the provision of housing or other
land and financial assistance);

(b) an agreement relating to the exercise of a power under section 30 or
34 of the Greater London Authority Act 1999 (general and subsidiary
45powers of the Greater London Authority);

(c) an agreement between a local authority and the Secretary of State
under section 11(6) of the Local Government Act 2003 (agreement
about capital receipts payable to the Secretary of State);

Welfare Reform and Work BillPage 39

(d) an arrangement between a local authority and the Homes and
Communities Agency, the Greater London Authority or the
Secretary of State under which rents for social housing may be set on
a particular basis.

(5) 5Regulations under sub-paragraph (2) may define “affordable rent” and may,
in particular, provide that it is a rent set in accordance with a method
specified, or of a description specified, in the regulations.

(6) The methods that may be specified in the regulations include, but are not
limited to, methods that provide for a maximum level of rent when
10accommodation is initially let to be a certain percentage of market rent in
certain cases or circumstances.

(7) A reference to an amount of market rent includes a reference to an amount
payable by way of service charge.

(8) RICS valuation method” means a method for determining market rent that
15complies with standards for valuation published from time to time by the
Royal Institution of Chartered Surveyors.

Part 2 Exceptions and exemptions

Exceptions

5 (1) 20Part 1 does not apply in relation to a tenant of social housing if—

(a) the 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) 25Part 1 does not apply in relation to social housing of a registered provider if,
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
30of the mortgagee’s powers to enforce the mortgage,

(b) a 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
35enforce the mortgage, or

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

and 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
40of 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 exercise 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) 45If—