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Housing Law - Demotion - Hitting the Anti-Social Where it Hurts?

By : Dean Underwood

In March 2003, the Government outlined its proposals for tackling anti-social behaviour across the community in its White Paper: Respect and Responsibility~taking a stand against anti-social behaviour. The Anti Social Behaviour Act 2003 - a melange of disparate legal powers and duties - implements those proposals. It provides the police with power to close crack houses and greater power to disperse intimidating crowds. It bestows greater responsibility on parents for their children's behaviour. In the context of housing, social landlords are not overlooked. When Part 2 of the Act comes into force, social landlords will inherit new powers, which will engage them more than ever before in controlling problem tenants. One such power will be the ability to apply to the court for a 'demotion order', temporarily removing a tenant's security of tenure. This article examines the new demotion powers of social landlords and the principal characteristics of demoted tenancies with a view to assessing their likely impact when Part 2 of the Act comes into force.

The statutory framework

Section 14 of Part 2 to the 2003 Act inserts sections 82A and 6A into the Housing Acts 1985 and 1988. The new sections empower local authorities, Housing Action Trusts (HATs) and Registered Social Landlords (RSLs) to apply for a demotion order against a secure or assured tenant. If granted, the order will terminate the secure or assured tenancy, whereupon a demoted tenancy will take effect.

Pre-requisites

Before applying for the order, the landlord must serve notice on the tenant. In the case of assured tenancies, the tenant must be given at least 2 weeks' notice [s6A(7) of the 1988 Act]. A secure tenant, by contrast, must be given at least four weeks' notice [s83 of the 1985 Act (as amended)]. The court will not grant a demotion order unless it is satisfied that:

  1. the tenant or a person residing in or visiting the dwelling house has engaged or has threatened to engage in conduct defined in new sections 153A and 153B of the 1996 Act, namely: 

    153A: conduct,which is capable of causing nuisance or annoyance to any person and which directly or indirectly relates to or affects the landlord's housing management functions and which is capable of causing nuisance or annoyance to (a) a person with a right to reside in or occupy housing accommodation owned or managed by the landlord; (b) a person with a right to reside in or occupy other accommodation in the neighbourhood of the accommodation referred to in (a) above; (c) a person engaged in lawful activity in or in the neighbourhood of accommodation referred to in (a) above; or (d) a person employed(whether or not by the landlord)in connection with the exercise of the landlord's housing management functions;or

    153B: conduct, which involves using or threatening to use the landlord's accommodation for an unlawful purpose. and
  2. it is reasonable to make the order.

Consequences

If the court accedes to the order and the landlord is a local authority or HAT, the demoted tenancy will in effect be a 12-month introductory tenancy, governed by section 143A of the Housing Act 1996, with detailed provisions as to possession proceedings, including internal review procedures, and rights reflecting those for introductory tenancies.

If on the other hand the landlord is a RSL, the demoted tenancy will be an assured shorthold tenancy ('AST'), regardless of whether it was previously secure or assured. Section 15 of the Act inserts a new section 20B into the Housing Act 1988, which governs the new AST. During the demotion period, the landlord can bring possession proceedings in the ordinary way, including issuing section 21 proceedings to terminate a demoted AST. However, at the end of one year, starting with the day when the demotion order takes effect, the demoted tenancy will cease to be an 'introductory' tenancy or AST, unless the landlord has given notice of possession proceedings. If the landlord has given notice, the tenant's demoted status will continue beyond the standard 12 months, delaying promotion of the tenancy for a further 6 months if the landlord does not commence possession proceedings. If the landlord does not serve notice or alternatively does not commence possession proceedings within the 18-month limit, the demoted tenancy will be promoted. On promotion, former secure tenants of local authorities and HATs will revert to a secure tenancy and former assured tenants of RSLs will recover their fully-assured status. However, former secure tenants of RSLs will also become fully assured tenants and will not revert to their previous secure status.

Comment

There can be little doubt about the intent behind the demotion provisions of the 2003 Act. They are hard-hitting, arguably draconian provisions, which implement a 'prevention and cure' approach to anti-social behaviour, not only threatening to hit problem tenants where it really hurts - their security of tenure - but actually providing social landlords with the ability to land that punch. The demotion order promises to be a powerful disincentive to anti-social tenants. The question is, in practice is it likely to be any more than that?

In the writer's view, in all but the most serious cases, there is good reason to think not. At first blush, the demotion order appears to be a convenient compromise between protecting the landlord's interests on the one hand and safeguarding the tenant's security on the other: it gives the problem tenant a last chance to retain a tenancy of at least some description while ensuring that the landlord can evict with greater ease. To that extent, it appears an attractive option. However, the consequences of making a demotion order are undoubtedly severe and, in all but the most serious cases, demotion is likely to appear a disproportionate sanction.

During the demotion period, the tenant is extremely vulnerable to eviction: the landlord can terminate a demoted AST by issuing accelerated possession proceedings and does not have to wait 6 months from the start of the new tenancy. Further, the new regime operates particularly harshly on secure tenants of RSLs. Once demoted, they will never regain their secure status, but will acquire an assured tenancy at the end of demotion, thereby losing the right to buy and the right to a fair rent.

With that in mind, the writer's view is that the courts will prefer and will more readily grant a suspended possession order in ASB cases than they will a demotion order. At present, the 2003 Act raises more questions for landlords, tenants and practitioners than it provides answers. How will the courts react to the new demotion provisions? How will they define 'behaviour, which is capable of causing nuisance or annoyance' under new section 153A? The question inevitably depends on personal perception: what is tolerable to one tenant may be intolerable to the next. How direct an effect must that behaviour have on the landlord's housing management functions to satisfy section 153A? Is the new demoted tenancy regime ECHR compatible? Does it discriminate against secure tenants of RSLs?

These are but a few of the many questions, which the courts will need to resolve before the effect of the demotion provisions can be fully appreciated. It remains to be seen whether they retain their intended shape and hard-hitting effect once those questions have been answered. In the meantime, they remain a veritable hunting ground for the insightful practitioner.