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Assignment: Secure and flexible tenancies

This content applies to England

Information about assignment of secure and flexible tenancies.

Introduction

Secure tenancies (including flexible tenancies) are public sector tenancies governed by the Housing Act 1985 (see the section Secure tenancies for more information). It is only possible to assign a secure tenancy in certain specified circumstances.[1]

An attempt to assign a secure tenancy outside the specified circumstances in which assignment is permitted will not transfer the secure tenancy.[2] The assignee will become the new contractual tenant but the tenancy will no longer be secure and the landlord will be able to terminate the tenancy by service of notice to quit.

The Localism Act 2011 created a new procedure for the mutual exchange of tenancies where one of the tenancies to be exchanged is a flexible tenancy (see the Flexible tenancies section for more on these). This is dealt with separately, below (under 'Tenancies 'transferred' under the right to exchange'), although the exchange is not achieved by way of assignment.[3]

Tenancies assigned under the right to exchange (mutual exchange)

Mutual exchanges take effect where both parties have assigned their respective secure tenancies[4] or with certain assured tenants of private registered providers of social housing (PRPSHs).[5]

As a flexible tenancy is a form of secure tenancy, a flexible tenant can exchange by way of assignment with another flexible tenant. However, when a flexible tenant wants to exchange with a secure or assured PRPSH tenant, a different procedure for the mutual exchange will apply (see below,  Tenancies 'transferred' under the right to exchange (mutual exchange)).

A mutual exchange may only take place with written consent from the landlord. Exchanges can take place between more than two tenants as long as they all have their respective landlords' consent. If a secure tenant exchanges with an assured tenant, the former will become an assured tenant and the latter will become a secure tenant.

Landlord's refusal to consent

The landlord can only refuse consent on one or more of the grounds set out in Schedule 3 to the Housing Act 1985:

Grounds connected with court proceedings

  • a court order to give up possession has been granted against the tenant or the proposed assignee
  • proceedings or a notice of proceedings for possession have been served on the tenant or the proposed assignee under the grounds 1 to 6 of the discretionary grounds for possession
  • (in force from 20 October 2014) proceedings or a notice of proceedings for possession have been served on the tenant or the proposed assignee under the mandatory ground for possession for antisocial behaviour (section 84A Housing Act 1985) [6]
  • a relevant order (certain anti-social behaviour orders or injunctions) or suspended ground 2, 2ZA, 14 or 14ZA possession order is in force [7]
  • an application is pending before any court for a relevant order, a demotion order or a ground 2, 2ZA, 14 or 14ZA possession order to be made in respect of the tenant or the proposed assignee or a person who is residing with either of them.[8]

Grounds connected with the accommodation

Consent can be refused where the accommodation is:

  • substantially more extensive than is required by the proposed assignee
  • not reasonably suitable for the needs of the proposed assignee and her/his family
  • adapted for a person with disabilities and the exchange would result in such a person no longer living there
  • certain types of tied accommodation
  • one of a group let to people with special needs (eg sheltered accommodation), special facilities are available nearby and the exchange would result in such people no longer living there
  • the property is managed by a PRPSH under a particular type of management agreement,[9] where at least half the members of the PRPSH are tenants, at least half the tenants are members and the assignee refuses to become a member .

Grounds connected with the landlord

Consent can be refused where the landlord is:

  • a charity and the proposed assignee's occupation conflicts with the objects of the charity
  • a housing association/PRPSH or trust providing accommodation for people with special needs and the exchange would result in such people no longer living there

If consent is withheld for any other reason or on grounds not as specified above, consent is treated as given and the assignment can go ahead. If the landlord fails to respond see 'notice of refusal to consent' below.

In addition if the tenant is in arrears or has breached a term of the tenancy, the landlord may give consent on the condition that the arrears are paid or the breach is remedied before the assignment can take place.[10]

Notice of refusal to consent

If the landlord wishes to rely on any of the grounds for refusal above, it must serve a notice on the tenant specifying the ground and giving particulars of it.

The landlord must give notice of refusal within 42 days of the tenant's application for consent. Outside this time limit, the landlord loses the right to withhold consent on any of the above grounds. However, the failure by the landlord to reply within 42 days is not to be treated as the giving of consent and the assignment cannot just go ahead. The tenant must take action, for example, by applying for an injunction or a declaration in the county court to compel a reply, s/he cannot simply proceed to assign the tenancy in default.

Tenancies 'transferred' under the right to exchange (mutual exchange)

There are specific rules in section 158 of the Localism Act 2011 governing mutual exchange where:[11]

  • at least one of the tenants is a flexible tenant, or an assured shorthold tenant of a PRPSH or of a housing trust that is a charity,

and

  • at least one of the tenants is a periodic secure tenant, or a fully assured tenant of a PRPSH or of a housing trust that is a charity.

The periodic secure tenancy or fully assured tenancy involved must have started before section 158 of the Localism Act 2011 came into effect (ie 1 April 2012).[12] This means that periodic secure tenancies or fully assured tenancies created on or after 1 April 2012 cannot use this statutory right to exchange with a flexible tenant/assured shorthold tenant.

Each tenant wishing to exchange under these rules must make their request in writing to their own landlord. A mutual exchange may only take place if each landlord gives written consent. The exchange is not achieved by way of assignment, rather it is achieved by the grant of a new tenancy so that each tenant retains their existing status (where the landlord condition for creating that type of tenancy allows for it).

Exchanges can take place between more than two tenants as long as they all have their respective landlords' consent.

Landlord's refusal to consent

The landlord can only refuse consent on one or more of the grounds as set out in Schedule 14 to the Localism Act 2011.[13] These include all grounds as set out in Schedule 3 to the Housing Act 1985 (see above under 'Tenancies assigned under the right to exchange'), in addition to the following:

  • the tenant is in rent arrears
  • the tenant is otherwise in breach of a term of the tenancy agreement.

If the landlord wishes to rely on any of the grounds for refusal above, it must serve a notice on the tenant specifying the ground and providing details of it, within 42 days of receiving the tenant's request for a mutual exchange. Outside this time-limit, the landlord loses the right to withhold consent on any of the above grounds.

However, the failure by the landlord to reply to the tenant's request is not to be treated as the giving of consent. In this circumstance, for the transfer to go ahead, the tenant must apply for an injunction in the county court.[14]

Exclusions

An assured shorthold tenant does not have the statutory right under section 158 of the Localism Act to mutually exchange their tenancy where:[15]

  • her/his tenancy is for a fixed term of less than two years, or
  • her/his tenancy is periodic, or
  • the rent payable under her/his tenancy is

In these cases a mutual exchange may only take place if each landlord gives permission, for example through a contractual term in the tenancy agreement.

Tenancies assigned by way of property adjustment orders

Where a court makes a property adjustment order, under sections 23A or 24 of the Matrimonial Causes Act 1973, or under section 17(1) of the Matrimonial and Family Proceedings Act 1984, or under paragraph 1, Schedule 1 to the Children Act 1989, ordering that a sole or joint tenancy be transferred to one party in matrimonial proceedings, it will be necessary to assign the tenancy to give effect to the order. When the court orders the assignment, if there is a term of the tenancy prohibiting assignment or prohibiting assignment without the landlord's consent, it will still be a breach of tenancy to assign unless consent is obtained.

The courts also have powers to transfer tenancies under the Family Law Act 1996. This transfer does not take effect by way of assignment and so is not included in the list of specified circumstances in which assignment is permitted. More information about these orders is included in the Relationship breakdown section.

Tenancies assigned to a potential successor

A secure tenancy can be assigned to a person who would be qualified to succeed the tenant if the tenant died immediately before the assignment.[16] For information about persons entitled to succeed to a secure tenancy, see the page on Succession: Secure and flexible tenancies.

An assignment must be executed before an assignor moves out of the property (ie when it is still her/his only or principal home) if s/he intends to do so, otherwise the secure tenancy status is lost.

Joint tenants

A joint secure tenancy cannot be assigned to a potential successor. In the event of the death of a joint tenant, the remaining sole tenant will succeed to the tenancy by survivorship, not by statutory succession as defined in the Housing Act 1985.[17] The House of Lords held that the right to assign a secure tenancy to a person who would be qualified to succeed to the tenancy if the tenant died immediately before the assignment did not apply to a joint secure tenancy. [18]

Counts as a succession

An assignment to a potential successor counts as a succession, as such there can be no further succession when the assignee tenant dies.[19]

Factors to consider

In many cases, there will be a choice as to whether the tenancy should be assigned before death or whether it is better to wait and allow succession to occur. There are several factors to consider when deciding which method is preferable, including:

  • using assignment could prevent a dispute arising between two potential successors on the tenant's death, as the tenant could choose the person to whom the tenancy is to be transferred while s/he is alive
  • assignment could prevent the local authority from obtaining possession under Ground 15A for under-occupation (see the page Discretionary grounds plus suitable accommodation for more information) against a member of the family, as that ground only applies where a person has succeeded to the tenancy on the death of the tenant (see the section on Succession for more information) and not where the tenancy has been assigned during the tenant's lifetime.

Prohibition in tenancy agreement

If the tenancy agreement contains an absolute prohibition against assignment, despite the fact that the courts have held that an assignment under this exception is effective to transfer the secure tenancy,[20] it is arguable that the assignee could be subject to an action for possession under Ground 1 of Schedule 2 to the Housing Act 1985 for the breach of a term of the tenancy.

However, Ground 1 is a discretionary ground and the court may not consider it reasonable to grant possession as the Act expressly provides for such assignments and the assignee would probably have succeeded on the death of the tenant. When deciding whether to grant possession, the court may look at the reasons for the assignment, for example the tenancy may have been assigned to avoid possession under Ground 15A (under-occupation) or to avoid liability for rent arrears. The same could apply if there was a qualified prohibition and the tenant assigned without consent.

Fixed-term secure tenancies granted before 5 November 1982

Fixed-term secure tenancies granted before 5 November 1982 can be assigned but they will cease to be secure tenancies after the assignment unless they fall under one of the above specified circumstances in which secure tenancies can be assigned.

Wales

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] s.91 Housing Act 1985.

[2] s.91(3) Housing Act 1985.

[3] s.158 Localism Act 2011.

[4] s.92 Housing Act 1985.

[5] s.92 Housing Act 1985 as amended by s.163 Local Government and Housing Act 1989.

[6] ground 2ZA, Sch.3 Housing Act 1985 as inserted by s.100 Anti-social Behaviour, Crime and Policing Act 2014

[7] ground 2A, Sch.3 Housing Act 1985 as amended by para 15(6), Sch.11(1) Anti-social Behaviour, Crime and Policing Act 2014.

[8] ground 2A, Sch.3 Housing Act 1985 as amended by para 15(6), Sch.11(1) Anti-social Behaviour, Crime and Policing Act 2014.

[9] Management agreement is defined by s.27 Housing Act 1985.

[10] s.92(5)(6) Housing Act 1985.

[11] s158 Localism Act 2011.

[12] s.158(6) Localism Act 2011; s.6 The Localism Act 2011 (Commencement No. 4 and Transitional, Transitory and Saving Provisions) Order 2012 SI 2012/628.

[13] s.159 Localism Act 2011; Sch.14 Localism Act 2011 as amended by s.100 and para 47, Sch.11(1) Anti-social Behaviour, Crime and Policing Act 2014.

[14] s.110 Housing Act 1985.

[15] reg.3 Transfer of Tenancies and Right to Acquire (Exclusion) Regulations 2012 SI 2012/696; see also para 7.3 of the Explanatory Memorandum to those regulations.

[16] s.91(3)(c) Housing Act 1985.

[17] Burton v Camden LBC [2000] UKHL 8; Solihull MBC v Hickin [2010] EWCA Civ 868.

[18] Burton v Camden LBC [2000] UKHL 8.

[19] Peabody Donation Fund Governors v Higgins [1983] 1 WLR 1091.

[20] s.91(1) Housing Act 1985.

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