Assignment of secure, flexible and introductory tenancies
Limited circumstances that allow assignment of secure, flexible, introductory, and local authority demoted tenancies.
- Assignment of secure and flexible tenancies
- Tenancies assigned under the right to exchange (mutual exchange)
- Tenancies 'transferred' under the right to exchange (mutual exchange)
- Tenancies assigned by way of property adjustment orders
- Tenancies assigned to a potential successor
- Fixed-term secure tenancies granted before 5 November 1982
- Right of assignment for introductory tenancies
Assignment of secure and flexible tenancies
Secure tenancies, including flexible tenancies, are public sector tenancies governed by the Housing Act 1985.
It is only possible to assign a secure tenancy in certain specified circumstances.[1]
Under section 143K of the Housing Act 1996, a local authority demoted tenancy cannot be assigned, except as part of proceedings under family law.
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. The exchange is not achieved by way of assignment.[3]
Tenancies assigned under the right to exchange (mutual exchange)
A mutual exchange by assignment takes effect where a secure tenant exchanges their tenancy with:
another secure tenant[4]
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 applies.
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
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 [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
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 their 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, special facilities are available nearby and the exchange would result in the people with the special needs 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, they cannot simply proceed to assign the tenancy in default.
Challenging the refusal to consent
There is no formal route of appeal for a tenant to challenge the refusal to consent by the landlord, for example, if the ground used is incorrect.
A tenant might be able to challenge the reason for refusal by:
submitting a complaint to the landlord
if needed, escalating this complaint to the Housing Ombudsman or Local Government and Social Care Ombudsman
As a refusal to consent to a mutual exchange is a decision taken by a public body, it might also be possible to challenge the decision by judicial review.
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 1 April 2012 when section 158 of the Localism Act 2011 came into effect.[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, 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.
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]
their tenancy is for a fixed term of less than two years, or
their tenancy is periodic, or
the rent payable under their tenancy is affordable rent, Intermediate rent, Mortgage Rescue rent or shared ownership rent
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 is 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.
Tenancies assigned to a potential successor
A secure tenancy can be assigned to a person who would qualify to succeed the tenancy if the tenant died immediately before the assignment.[16] This is usually a spouse or civil partner, but if there is no spouse or civil partner a member of the family might qualify.
An assignment to a potential successor counts as a succession. There can usually be no further succession when the new tenant dies.[17]
Find out more about council tenancy succession.
The assignment must happen while the property is the tenant's only or principal home. Secure status is lost if the tenant moves out before assignment, so the tenancy cannot be assigned.
Joint tenancy
A joint secure tenancy cannot be assigned to a potential successor.[18]
When a joint tenant dies, the surviving tenant inherits the tenancy by survivorship.[19]
Benefits of assigning the tenancy
A tenant might have a choice whether to assign the tenancy before death or whether it is better to wait and allow a succession.
Assigning the tenancy could prevent the local authority from obtaining possession under ground 15A. This ground allows the landlord to seek possession where the property is too large for the successor. The landlord can only use the ground when a person has succeeded to the tenancy on the death of the tenant and not when the tenancy was assigned.
Find out more about ground 15A.
Assigning the tenancy might prevent a dispute between two potential successors on the tenant's death. The tenant can choose who takes over the tenancy while they are alive.
When the tenancy does not allow assignment
The tenancy agreement might contain an express term prohibiting assignment or only allowing assignment with the landlord's consent. When the tenant assigns the tenancy to a successor, the landlord might take possession action against the new tenant on the grounds of a breach of the tenancy using ground 1.
Ground 1 is a discretionary ground and the court might not consider it reasonable to grant possession. The courts have held that an assignment to a potential successor is effective to transfer a secure tenancy.[20]
When making their decision the court might look at the reasons for assignment. For example, where the tenancy might have been assigned to avoid possession under ground 15A or to avoid liability for rent arrears.
Find out more about discretionary grounds for possession.
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.[21]
Right of assignment for introductory tenancies
Introductory tenancies were introduced by the Housing Act 1996. Similarly to secure tenancies, introductory tenancies can only be assigned in the following circumstances:[22]
by a court order under section 24 of the Matrimonial Causes Act 1973, section 17(1) of the Matrimonial and Family Proceedings Act 1984, or Schedule 1 to the Children Act, or
by the tenant to someone who would have been entitled to succeed had the tenant died
What the tenancy agreement says about assignment will also be relevant in the same way as for secure tenancies.
It is not possible to mutually exchange a property let on an introductory tenancy.
Last updated: 27 October 2022