The Homeless Reduction Act 2017 commences on 3 April 2018 (as far as relevant for our readers) and the Ministry of Housing, Communities & Local Government (MHCLG) has published the code of guidance for local authorities.
Overview
The Homeless Reduction Act 2017 intends to reduce homelessness in England (as the title suggests).
Of particular note to readers is the specific provisions in relation to a section 21 notice.
From 3 April 2018, a tenant should be regarded as threatened with homelessness after a valid section 21 notice has been given by a landlord (or by an agent on a landlord’s behalf).
Full details can be found in our article about the Homeless Reduction Act 2017 here.
Code of guidance
The code of guidance published by MHCLG expands on the legislative content.
Unfortunately it’s a little conflicting. On the one hand it says at para 6.35:
The Secretary of State considers that where an applicant is:
(a) an assured shorthold tenant who has received a valid notice in accordance with section 21 of the Housing Act 1988;
(b) the housing authority is satisfied that the landlord intends to seek possession and further efforts from the housing authority to resolve the situation and persuade the landlord to allow the tenant to remain in the property are unlikely to be successful; and,
(c) there would be no defence to an application for a possession order;
then it is unlikely to be reasonable for the applicant to continue to occupy beyond the expiry of a valid section 21 notice, unless the housing authority is taking steps to persuade the landlord to allow the tenant to continue to occupy the accommodation for a reasonable period to provide an opportunity for alternative accommodation to be found.
But then goes on to say (para 6.37):
The Secretary of State considers that it is highly unlikely to be reasonable for the applicant to continue to occupy beyond the date on which the court has ordered them to leave the property and give possession to the landlord.
And further (6.38) …
Housing authorities should not consider it reasonable for an applicant to remain in occupation up until the point at which a court issues a warrant or writ to enforce an order for possession.
Which is it? According to all three paragraphs, it’s not considered reasonable for the tenant to have to occupy –
- beyond expiry of the section 21;
- beyond the date given by the court, or;
- up to the point of a warrant
It’s only the degree of reasonableness that appears to change in each paragraph!
Quite how much use this is going to be for landlord’s will have to be seen.
The guidance then goes on to specify (and in bold in the code) at para 6.38:
Housing authorities should ensure that homeless families and vulnerable individuals who are owed a section 188 interim accommodation duty or section 193(2) main housing duty are not evicted through the enforcement of an order for possession as a result of a failure by the authority to make suitable accommodation available to them.
This is the only paragraph out of the ones above without a degree of reasonableness being mentioned. Therefore, in reality and with a shortage of housing stock, this will likely be the ultimate fallback position of the local authority when considering a homelessness application. That leaves landlords in precisely the same position we were in before the Act came into force!
There was an article 2 weeks ago in the property supplement of the London Evening Standard written by their “regular London landlord”. She wrote she had an application to rent from someone who was giving her father’s name as guarantor. The father had a business, thought to be a takeaway business, but the name of the business was not given. The prospective tenant did not want her father to sign the guarantor form and said to the landlord, let him come and meet you in person. The meeting took place, the father said there is no need for him to sign the guarantor form, as he will verbally guarantee the rent. When he was leaving the meeting, he told the landlord that there is no need to take bank references on his daughter, because she can easily afford the rent.
This set off alarm bells with the landlord. The landlord then took up the bank references as a matter of urgency, and found that the prospective tenant could not afford the utility bills, let alone the rent. How then can tenants be so daft as to apply for something that they cannot afford, and are bound to be evicted from ? The conclusion was that the tenant wanted somewhere to be evicted from. Then the tenant would qualify for council accommodation. Thereby it would be possible to jump the queue, as there is a waiting list of many years for a council flat. Even if a council flat was not given, the council would provide benefits and free housing.
A lesson for landlords is that it is best not to buy property in down at heel areas. The culture is one of seeking benefits and believing the country owes them a living, even if the prospective tenants have come from a foreign country.