Renters' Rights Bill

Written evidence submitted by the Aster Group to the Renters Rights Bill Committee (RRB71)

Executive summary

1. We have concerns about how the proposed legislation contained in the Renters Rights Bill will affect the management of shared ownership properties.

2. The change to the definition of fixed term tenancies and changes to the definition of fixed term tenancies will impact how we seek possession of shared ownership properties on the occasional times there is a breach of tenancy (anti-social behaviour etc.)

3. We request the Committee review as a matter of urgency, the way the Bill is drafted and its impact on shared ownership homes and those living within them across the country.

About Aster Group

4. Aster Group is a registered social housing provider, with over 37,000 homes across southern England and London. We provide homes for social rent, affordable rent, housing for older people, care, temporary accommodation, shared ownership, and leasehold.

5. We became a Homes England Strategic Partner for the Affordable Homes Programme in 2021. This funding continues to support the delivery of our land led schemes.

Our evidence

6. We have concerns about how the proposed legislation will affect the management of shared ownership properties. The current draft of the Bill, in relation to the changes to the definition of fixed term tenancies, will impact on how we seek possession of shared ownership properties on the rare occasions that customers are causing anti-social behaviour and breaching their tenancy.

7. We therefore request that the Committee urgently look specifically at the way the Bill is drafted with regards to the impact it will have on the shared ownership tenure.

8. As context, difficulties arise because of the Bill’s changes to the definition of fixed term tenancies. Section 30 of the Bill proposes to insert (into Part One of Schedule One to the Housing Act 1988) a new category of tenancies which cannot be assured, namely "Tenancies of more than seven years". This will prevent all shared ownership leases from being deemed assured tenancies.

9. Under current legislation, shared owners have fixed term assured tenancies (of at least 125 years as a standard, and 990 years going forward), allowing landlords to rely on the grounds of possession set out in the Housing Act 1988. Should the Bill no longer recognise shared ownership fixed term tenancies, landlords will not be able to rely on the grounds of possession on the occasional time that shared owners are breaching their tenancy terms. This is particularly important to us if shared owners commit repeated acts of anti-social behaviour and we have exhausted all other options. On the infrequent occasions that customers are causing anti-social behaviour, we need to be able to act swiftly to protect neighbours and communities.

10. Should shared  ownership fixed term tenancies be removed from the Bill, landlords will need to rely on leasehold forfeiture provisions. It is our belief that these provisions are insufficient to allow for effective management of shared ownership homes on the rare occasion that enforcement action is required - largely due to the onerous nature and length the process takes, as well as the increased chance of mistakenly accepting payment when there is a breach taking place, a situation that would waive the reported breach (especially where the shared owner is paying for their tenancy element through monthly direct debit).

11. As an example of the above, should a shared owner commit acts of anti-social behaviour, our concern is that the forfeiture rules are insufficient for tackling this in a timely way. This therefore may lead to neighbours and communities continuing to feel the impact of anti-social behaviour, which is against some of the aims of the Bill and indeed not what we want for our communities.

12. Currently with shared ownership leases, dealing with criminality is a simple one stage process, whereas under the proposals the process will mirror that for leaseholders. With leaseholders, the forfeiture process is lengthy and onerous, requiring a two stage process with the Court (usually a First Tier Tribunal) to agree the lease has been breached before we are then able to apply to the Court for possession – both lengthy processes with significant delays within the Court system.

13. Forfeiture rules will also mean that if a landlord accepts even one rent payment from shared owners who are in breach, it could be deemed an acceptance of the shared owners’ breach, meaning that possession can no longer be sought for that breach. This causes us particular concern in relation to preventing and tackling anti-social behaviour as landlords will not always immediately know when a shared owner becomes anti-social, especially if it is a minor breach to begin with.

14. For example, a neighbour may contact our out of hours team over any given weekday or weekend to report an incident with a shared owner. As we will be deemed to have been notified of the breach at the time the incident is reported, should the shared owner make a payment of rent before our teams have been able to review any incidents and put a block on accepting payment, we can be judged to have waived the breach of the lease because we accepted a payment before we were able to mobilise our teams. This will potentially challenge our ability to manage that behaviour effectively and put steps in place to protect neighbours and communities. It will also incur additional cost and may result in us not being able to recover possession at all.

15. In addition, due to the ongoing leasehold and commonhold reform we are uncertain as to what the future legal position will be in terms of forfeiture and we understand that upcoming legislation will remove that as an option. Whilst we recognise that forfeiture may be disproportionate in most circumstances, we do not want to be left in the position where we are unable to rely on either forfeiture or the grounds of possession set out in the Housing Act 1988 in the rare circumstance that it is proportionate.

16. Furthermore, there is also a financial impact of the proposed changes. Currently, if a lessee under a shared ownership lease gets into financial difficulty and is unable to pay their rent, we are able to contact the lender with a notice under Section 8 and the lender is able to clear the arrears by adding the arrears to the customer’s mortgage. Removing this would mean shared owners would need to seek non secured borrowing, which would potentially be much more expensive (for example, through a payday lender). These proposals will remove the link between landlords and lenders and our ability to work in partnership with them to support the shared owner.

17. We hope that this provides sufficient detail to allow the Committee to understand the concerns we have regarding the impact that abolition of fixed term tenancies will have on shared ownership tenancies. We request that the Committee urgently considers how this can be prevented, such as an exception to the abolition of fixed term tenancies solely in relation to shared ownership tenancies.

18. For further information, or should you have any questions about any part of this submission, please do not hesitate to contact us on: communicationsteam@aster.co.uk.

Appendix

19. Please find below two examples of the rare occasions where we have had to seek possession due to anti-social behaviour:

a. One of our customers in a shared ownership property used the home for the manufacture and dealing of drugs over a sustained period of time. This caused widely felt negative community impact. We had to buy back a neighbouring shared ownership property to allow the family with children to relocate on police advice. Arrests and convictions of our customer breaching their tenancy followed and possession was granted earlier this year.

This would not have been possible under the proposed changes as accepting a single month’s rent payment could be considered to have waived the breach of the lease.

b. A separate shared owner was using their flat as a brothel for more than two years. This had a severely detrimental impact on the eight other shared owners in the block and the wider community. The police eventually secured a partial closure order, which was routinely breached by the customer. Multi agency action led to possession proceeding and possession being granted a few months ago.

This would not have been possible under the proposed changes as accepting a single month’s rent payment could be considered to have waived the breach of the lease.

October 2024