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You are here: BAILII >> Databases >> The Law Commission >> Renting Homes (Report) [2003] EWLC 284(11) (15 November 2003) URL: http://www.bailii.org/ew/other/EWLC/2003/284(11).html Cite as: [2003] EWLC 284(11)

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PART XI

SPECIFIC ISSUES 2: JOINT OCCUPATION

Introduction

11.1     So far this Report has proceeded on the basis that there is just a single occupier. The reality is that many premises are occupied by more than one person. The scheme we propose must be sufficiently robust and clear to accommodate this fact, and the fluidity with which many people organise their lives.
11.2     This Part deals with a number of specific issues relating to the joint occupation of rented premises. These are:

(1) joint occupation agreements;

(2) adding new parties to the agreement;

(3) joint occupiers leaving the agreement;

(4) an additional ground for possession if a joint occupier withdraws from the agreement or abandons the premises;

(5) the rights of non-contractual occupants in relation to possession proceedings; and

(6) amendments to the Family Law Act 1996.

Joint occupation agreements

11.3     A distinction must be made at the outset between those joint occupiers who are in occupation because they are parties to an occupation agreement and other joint occupants, who are there on a non-contractual basis. These include: the members of the family of an authorised occupier, guests or some lodgers. We discuss the position of non-contractual occupants below, paragraphs 11.36 – 11.39.
11.4     The current law of landlord and tenant provides that where an estate in land is granted to two or more persons, they (or the first four named, if there are more than four^[1]) acquire the legal estate as joint tenants. This means that, on the death of one of them, the survivor(s) take the whole of the estate.
11.5     Joint tenants are jointly and severally liable for all obligations under the tenancy agreement, unless there is any provision to the contrary.^[2] Each tenant is therefore liable to the landlord in full, although a joint tenant who has met an obligation in full has a right of recovery from other joint tenants to the extent of his or her share.^[3]
11.6     It will often be in the interests of both landlords and occupiers that occupation agreements are granted to a number of joint occupiers. Landlords have a larger number of people to proceed against should there be breaches of the agreement in respect of the rent or other obligations. Occupiers have others on whom they can rely in respect of these obligations. Additional joint occupiers will also have contractual rights directly against the landlord, and an automatic right to succeed to the occupation agreement.^[4] Nothing in our proposed scheme should discourage the creation of joint occupation agreements.
11.7     For the purpose of our scheme, we recommend that where joint occupiers reside in premises under the terms of an occupation agreement, their occupation should be on the basis that their liability is joint and several.^[5] Thus breach by one occupier of the terms of the agreement (for instance, to pay rent) means that the full liability of the other party or parties to pay the rent remains unaffected. A joint occupier who has met an obligation in full has the right of recovery for the other joint occupier(s) to the extent of their share.
11.8     If the parties wish to move away from this position and take on unequal liabilities in relation to the premises, they should be able to do so by negotiating individual contracts with the landlord. For example, if two or more surviving joint occupiers wish to re-allocate the way in which they occupy the property, say into two or more flats, they should negotiate with the landlord a termination of the current agreement and a grant of two or more new occupation agreements covering the relevant premises.
11.9     We recommend that:

(1) joint holding of occupation agreements should be possible;

(2) the holders should hold as joint occupiers and therefore be jointly entitled to the benefits of the agreement; and

(3) joint occupiers have joint and several liability.

11.10     Two more specific issues follow from this. They relate to:

(1) numbers of joint occupiers; and

(2) survivorship.

Numbers of joint occupiers

11.11     Section 34(2) of the Law of Property Act 1925 limits the number of persons who may hold a legal estate in land to four. Any more than that hold an equitable interest only. We regard these principles as irrelevant to housing law.
11.12     We recommend that there should be no limit to the number of persons to whom joint rights of occupation in respect of a home may be given under an occupation agreement, whether initially or by the subsequent addition of a party to the agreement. We also recommend that the landlord should be entitled to set, in the occupation agreement itself, a maximum number of occupiers. This number must, in accordance with normal UTCCR principles, be fair. This is subject to the overriding statutory rules on overcrowding, currently found in Part X of the Housing Act 1985, which must not be broken. (These recommendations are without prejudice to the law relating to the registration of the legal interests of joint tenants, which should not be changed.)

Survivorship

11.13     Under current land law, where a joint tenant dies, the survivor(s) takes over his or her rights under the principle of survivorship. We recommend that this principle be adapted to those with joint occupation agreements.
11.14     Thus we recommend that there should be a compulsory-minimum term in type I and type II periodic occupation agreements that joint occupiers will hold their interests on the basis that if any occupier dies or the interest of that occupier is terminated, the remaining occupier(s) will take over the agreement, and all the rights and obligations going with it.^[6]
11.15     In relation to fixed term type II agreements only, it would be a default term. The parties could then agree that on the death of any joint occupier his or her interest in the agreement is to be transferred in accordance with the provisions of his or her will or intestacy (or that any joint occupier shall be able to require that this shall be so by giving notice to this effect to the others) and that this is to take effect for all purposes.

Adding new parties to the agreements

11.16     In recent years, there has been an increasing tendency, particularly amongst social landlords, to grant joint tenancies to those living together. The focus is particularly on couples who are husband and wife or living together as husband and wife. We seek to take these trends forward and to rationalise current best practice by creating a right which enables the occupier to ask to add another person into the occupation agreement jointly with him or her, without the need for terminating the original agreement and creating a new one. The objective is to ensure as much flexibility as possible.
11.17     We recommend that there should be a compulsory-minimum term in the occupation agreement giving the occupier the right to ask to add a person to the agreement as a new joint occupier.^[7] It would be subject to the landlord's consent, which could not be unreasonably withheld.
11.18     We offer, as guidelines, a number of possible instances where a refusal might be reasonable.

(1) Refusal of consent might be justified by considering the implications of the proposed new joint occupier becoming the sole occupier at a later date. For example, consent might reasonably be refused if there were doubts about the ability of the new occupier to shoulder all the obligations under the agreement; if the new occupier had no need for the type of housing involved (for example, housing adapted for the disabled); if the application amounted to an attempt to jump the queue for social housing; or if the original agreement was for a service occupancy to be held in name of the employee alone.

(2) The objects of a charitable registered social landlord should have a major influence on whether it would be reasonable to add a new joint occupier.

(3) Any relevant housing management agreement made by the landlord with representatives of occupiers should be taken into account.

(4) A landlord might reasonably refuse consent where the proposed new occupier was shown to be in rent arrears to any landlord, or he or she or any member of his or her family had been found to have engaged in anti-social behaviour.

(5) The landlord will be entitled to take into account the total number of occupiers who would end up entitled to live in the home. This should not exceed either the statutory overcrowding limit in the Housing Act 1985 Part X, or the number of occupiers set by the landlord in the agreement.

11.19     A landlord might be reluctant to allow a new joint occupier to be brought into the agreement because this could have the effect of anticipating a succession^[8], thereby enabling a succession to take place at a later date, which would not otherwise have occurred. For example, grandmother G (the occupier under the agreement), daughter D and granddaughter C all live in the same home. Landlord L assumes that D will succeed on G's death, as a member of G's family, but that the occupation agreement will end on D's death. G asks to bring D in as joint occupier. L is unhappy because D will then automatically succeed by survivorship, as a remaining joint occupier; C would at a later date also have the right to succeed on D's death as a member of D's family. In this situation, instead of the agreement coming to an end on D's death, the agreement would not come to an end until C's death. In the light of this, we think it should be possible for the landlord to give consent to the request to add C to the agreement subject to a condition that this would count as a statutory succession. Assuming that the overall effect of giving permission subject to this condition was reasonable^[9], this would have the effect of removing C's right to succeed.
11.20     A landlord might also be reluctant to give consent to adding an occupier to the agreement where he suspected that the original occupier might, after the new occupier has been added, proceed to disappear. In such a case it might be reasonable to make the giving of consent subject to a condition that the original occupier cannot withdraw as a joint occupier for a period of, say, three months. Questions relating to the reasonableness of conditions will, naturally, depend heavily on the particular circumstances of the case.
11.21     Where an occupier is refused permission to add a joint occupier, he or she ought to have the right to apply to the county court for a declaration that the refusal is unreasonable. Such a declaration, if made, should also have the effect of ordering the addition of the proposed new joint occupier into the occupation agreement jointly with the current occupier, as from the date of the order or some other date fixed by the court. Similarly, if the landlord sought to impose an unreasonable condition before granting consent, the occupier should have the ability to ask the court to make an appropriate order. At the same time, the court should have power to amend any other terms of the agreement if it considers it necessary to do so.
11.22     New joint occupiers should not normally become liable for pre-existing liabilities. A default term in the agreement would provide that the new joint occupier would only be liable for future breaches under the agreement (save where liability arises under a continuing breach) ^[10] and would only be able to take action in respect of future breaches of the agreement by the landlord. However, it should be regarded as reasonable for the landlord to impose a condition, on giving consent for the bringing in of a new joint occupier, that outstanding breaches of the agreement are rectified; and, as potentially reasonable, that the incoming joint occupier is required to accept liability for certain specified outstanding breaches.
11.23     The right to ask to add an occupier should apply to all agreements within the scheme, whether type I or type II. (The impact of the right will be much greater in the former case than in the latter, but this should not prevent an occupier under a type II agreement seeking permission, particularly where the agreement is a longer fixed-term one.)
11.24     There should be a default term in the agreement that any decision as to who the non-contractual occupants are should be a matter for the occupier under the agreement.

Joint occupiers leaving the agreement

Notice

11.25     Under the present law, a joint tenancy can only be brought to an end by the complete termination of the agreement. If one of several joint tenants gives notice to quit, it brings the whole tenancy to an end, regardless of the wishes or even knowledge of the other(s).^[11] Attempts to limit this rule have been unsuccessful.^[12] But it is a rule that can cause considerable injustice.
11.26     Under the Housing (Scotland) Act 2001, section 13, a joint tenant under a Scottish secure tenancy has a right to bring his or her interest in the tenancy (and not the whole joint tenancy) to an end by giving four weeks' notice to the landlord and the other joint tenants.
11.27     We recommend that a joint occupier should be able to terminate his or her interest in a joint agreement by means of a notice, without bringing the whole of the agreement to an end. Provision should be made for the remaining joint occupiers to be warned of what has happened and of its implications for them. The model occupation agreements should provide information about the required content of the notice.
11.28     We recommend that:

(1) the effect of a notice given to the landlord by a joint occupier under an occupation agreement (whether type I or type II) is merely to terminate his or her interest in and rights under the agreement;

(2) the landlord should be required to give a copy of the notice to all the other joint occupiers under the agreement within a month of receipt of the notice, at the same time giving them written warning that they may need to take steps to protect their position in the home; and

(3) it should be a default term of any fixed term type II agreement with a break clause that where only one of two or more joint occupiers operates the break clause, it will only terminate that occupier's interest in and rights under the agreement.

11.29     Once the joint occupier has issued such notice, and after the period of the notice has expired, he or she should acquire no further rights and obligations under the agreement.
11.30     The statutory model agreements should contain a specimen notice which could be used either by a joint or sole occupiers terminating the agreement.

Abandonment

11.31     It may also happen that a joint occupier simply walks away from the agreement, without giving notice to the landlord. In such a case if should be possible for the landlord to use the abandonment procedure^[13] to terminate that occupier's interest in the premises.
11.32     In this case, as other joint occupiers will remain in the premises, it will not be possible for the landlord automatically to regain possession of them, as we recommend should be able to happen when the premises are completely abandoned. In such circumstances, the additional ground of possession outlined in the following paragraphs would also apply.

Additional ground for possession if a joint occupier withdraws from the agreement or abandons the premises

11.33     We recommend that in type I agreements there should be a compulsory-minimum term providing that where there are joint occupiers (say, A, B and C) then if A gives notice of intention to quit the agreement, or abandons the agreement, the landlord should have a limited right to bring proceedings for possession against B and C. The reason for this recommendation is, for example, because:

(1) the landlord is a social landlord who does not feel that the remaining occupier(s) has/have the requisite degree of housing need;

(2) because the property is too large for the remaining occupier(s); or

(3) because it contains special features (for example, adaptation for a person with disabilities) which are not needed by the remaining occupier(s).

11.34     A landlord should take the following steps.

(1) As where other possession proceedings are contemplated, the landlord should give written notice of intention to take proceedings to the remaining joint occupiers. In accordance with our normal rules, the period of notice will be a minimum of one month and a maximum of three months.^[14]

(2) The notice must be issued within six months of the landlord receiving A's notice, or within six months of the effective date of the second notice under the abandonment procedure or the date of the court decision confirming that notice if it is challenged in court proceedings, whichever is the later.^[15]

(3) Following expiry of the notice period, actual proceedings against B and C would have to be commenced within six months.

11.35     We recommend that this should be a discretionary ground for possession. In addition a court would only be able to order possession, subject to the provision of suitable alternative accommodation, on the basis that the property in question is no longer appropriate for occupation by the remaining joint occupier(s).

Rights of non-contractual occupants in relation to possession proceedings

11.36     In general, the occupier(s) under an occupation agreement should be able to determine who else may be present in the property. It would be open to the landlord to use a substitute term in the agreement on this subject, for example about the numbers of guests permitted to stay in the home. Most non-contractual occupants will be there for short periods of time. Some will be there on a longer term basis, for example members of the occupier's family.
11.37     Where a landlord takes possession proceedings against the occupier, we think that non-contractual occupants who are present in the property with the permission of the occupier(s) should be given notice of this. Where relevant (particularly, where the ground for possession is a discretionary one) the non-contractual occupants should also have an opportunity of intervening in the proceedings in order to argue against the making of an order.
11.38     A number of analogous rules already exist.

(1) In mortgage possession proceedings, the mortgagee must serve a notice at the premises 14 days before the hearing, addressed to all occupiers there, stating that possession proceedings are being taken against the mortgagor.^[16] The occupiers may apply to be joined as defendants at the court's discretion.^[17]

(2) In landlord and tenant cases if the landlord knows of anyone who may be entitled to claim relief against forfeiture as an under-lessee, the particulars of claim must be served on that person.^[18]

(3) Under section 14(3) of the Housing (Scotland) Act 2001 the landlord is under a duty before starting possession proceedings to investigate and establish so far as is reasonably practicable whether there are qualifying occupiers of the property and, if so, their identities.^[19] The landlord must serve copies of any notice seeking possession on any such person. They have a right to be joined as parties to any subsequent proceedings.

11.39     We recommend that:

(1) there should be a default term in the occupation agreement giving the occupier the ability to decide who else may occupy the property on a non-contractual basis; this should be subject to the overcrowding provisions of Housing Act 1985, Part X, and to the contractual occupier's responsibilities for preventing anti-social behaviour by other non-contractual occupants;^[20]

(2) the CPR should provide that notice of possession proceedings must be served on (a) any sub-occupier holding under an occupation agreement granted by a contractual occupier; (b) all members of the family aged over 16 years of a contractual occupier, and (c) any other person aged over 16 years entitled or permitted by a person coming within (a) or (b) to live at the property. ^[21]

Amendments to the Family Law Act 1996

11.40     Currently section 30 of the Family Law Act 1996 contains matrimonial home rights for spouses, as opposed to tenants, to occupy properties. They include

(1) the right to have a payment or tender of rent by a spouse who is not a tenant treated as made on behalf of the other spouse who is a tenant (section 30(3)), and

(2) the right to have a non-tenant spouse's occupation of a home treated as occupation (as a residence or as an only or principal home as the case may be) by the tenant spouse for the purposes of housing legislation (section 30(4)).

11.41     These rights would normally end on the making of a possession order, because they usually only last as long as the tenant spouse is entitled to occupy the property by virtue of a beneficial estate or interest or contract, or a right to remain in occupation under an enactment (section 30(8)(b)). The rights can be enforced by an occupation order under section 33. Former spouses (under section 35(13)) and current or former cohabitants (under section 35(13)) can also apply for occupation orders (sections 35(13) and 36(13)).
11.42     In relation to secure and assured tenancies, where the tenant's spouse or former spouse has matrimonial home rights under the Family Law Act 1996 (or a former spouse or cohabitant or former cohabitant with rights under an order under sections 35 or 36 of the Family Law Act 1996) and the tenancy is terminated by the court, the spouse or former spouse has the same rights, while remaining in occupation, in relation to, or in connection with any adjournment, stay, suspension or postponement of possession proceedings as he or she would have if the tenancy had not been terminated.^[22]
11.43     We recommend that section 30 of the Family Law Act 1996 should be amended to refer to occupiers under the new scheme. Where the occupier obtains an adjournment, stay, suspension or postponement of a possession order, the rights of other parties to occupy and tender rent should be preserved until the possession order is enforced. The holders of these statutory rights should be given the right to be joined to possession proceedings and the same rights as the occupier to defend themselves against the making of a possession order and to apply after a possession order for any adjournment, stay, suspension or postponement.

Note 1    Law of Property Act 1925, s 34(2).    [Back]

Note 2    See C Harpum, Megarry and Wade, The Law of Real Property (6th ed 2000) paras 9-002 – 9-008.    [Back]

Note 3    Chalmers, Guthrie and Co v Guthrie (1923) 156 LTJ 382.    [Back]

Note 4    Because of this, it is important that a landlord should not agree to the creation of a joint occupation agreement without being aware of the implications of these principles. Consent to adding a new occupier to the agreement should always be required; this is discussed below at paras 11.16 – 11.24.    [Back]

Note 5    We shall leave open the possibility of joint occupiers agreeing between themselves if they wished to do so how their liability for obligations under the agreement is ultimately to be borne as between them (even though one of them may have had to pay the landlord in full).    [Back]

Note 6    This is discussed further in paras 14.21 – 14.22 below.    [Back]

Note 7    This transaction should be capable of being effected with the same degree of informality as a transfer: see paras 13.26 – 13.32 below.    [Back]

Note 8    We discuss the impact of the death of a joint occupier in Part XIV.    [Back]

Note 9    For example because C was in well paid employment and not in need of social housing.    [Back]

Note 10    C Harpum, Megarry and Wade, The Law of Real Property (6th ed 2000) para 15-039.    [Back]

Note 11    See Greenwich London Borough Council v McGrady (1982) 46 P & CR 223; Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478.    [Back]

Note 12    Newlon Housing Trust v Alsulaimen [1999] AC 313.    [Back]

Note 13    Set out at paras 9.61 – 9.77 above.    [Back]

Note 14    Paras 9.49 and 9.51 above.    [Back]

Note 15    Para 9.68 above.    [Back]

Note 16    CPR Part 55.10.    [Back]

Note 17    CPR Part 19.    [Back]

Note 18    CPR PD 55.4, paragraph 2.4.    [Back]

Note 19    These are defined in section 14(6) as other people occupying the property as their only or principal home who are members of the tenant’s family aged at least 16 or are (with the landlord’s consent) lawful assignees, sub-tenants or persons given possession of the home or any part of it, or lodgers.    [Back]

Note 20    Anti-social behaviour is discussed in Part XV.    [Back]

Note 21    In respect of any occupants of whom the landlord has no specific knowledge, a notice addressed to the other occupant(s) (excepting [name(s) of authorised occupier(s) under agreement]) delivered at or posted up at the property should suffice.    [Back]

Note 22    See the Housing Act 1985, ss 85(5) to (5A) and the Housing Act 1988, ss 9(5), (5A).    [Back]