Law

We’re evidently going to be spared any new legislation this year, as nothing directly relating to housing figured in the Queen’s speech in November.

But that doesn’t mean 2005 is going to be boring. Lots of new housing laws will come into effect as existing legislation is enacted. First up will be changes to the right to buy, which come into force on 18 January. The qualifying period will rise from three to five years; landlords will be allowed to exclude the right to buy where demolition is planned; there will be new rules on the repayment of discounts; and new landlords will get right of first refusal. Changes to voluntary sales by social landlords will also come into force on 18 January and parallel changes to the preserved right to buy and the right to acquire are expected.

Some time in February or March, expect the Court of Appeal’s decision on rent rises. Some social landlords use the statutory method of increasing rents annually for their assured tenants, as in the 1988 Housing Act. Others rely on a term in a rent review clause in the tenancy agreement. The Court of Appeal must decide what position the law takes if they use the wrong form, or complete the statutory form incorrectly, or use the rent review clause incorrectly.

On the last day of February, a host of leasehold reforms take effect, affecting every social landlord that owns and manages leasehold dwellings. Perhaps the most important are new restrictions on a landlord forfeiting a lease. From 28 February, no landlord will be able to forfeit a lease for non-payment of a “small sum” – defined as £350 or less – so landlords will have to use other means of recovery if one of their leaseholders owes them money, for service charges for example.

From this same date no landlord will be able to forfeit for some other breach (altering premises without permission, for example) without first proving the leaseholder has breached the lease. And landlords must serve a formal demand before a leaseholder is liable for ground rent. Other leasehold reforms, such as new service charge forms, will start later in the year, though the exact dates aren’t yet known (many are wondering, in fact, why it’s taking so long). But at some point this year social landlords must send leaseholders new forms if they want to be paid for service charges. If they fail to do this, leaseholders can withhold payment.

Other statutory laws, such as new housing rights for same-sex partners, are set to come into force this year on dates that have not yet been announced. One of these will give social landlords additional tools for tackling antisocial behaviour, with a power to extend the period of a probationary tenancy, new restrictions on exchanging tenancies and the ability to suspend the right to buy in cases of antisocial behaviour.

Fail to send the new form and you might not be paid for service charges

Changes to commonhold

Since 27 September 2004, commonhold has been available for new housing developments by social or private developers. But how will shared-ownership leases be accommodated in this new regime?

The restrictions on leasing residential commonhold units, such as a commonhold house or a flat, rule out the traditional shared-ownership lease as a method of delivering low-cost homeownership. A second set of commonhold regulations is expected, perhaps in April or May, which will provide for shared-ownership leases within commonhold. This will allow social landlords to consider commonhold for new housing developments.

A few days before Christmas the Court of Appeal also reached a decision on cases where a landlord seeks possession on the mandatory rent arrears “ground 8”. It found that, although the court can adjourn the claim in exceptional cases (illness, for instance), housing benefit misadministration is not an acceptable basis for doing that. Something to bear in mind for the new year.