Section 189: Information to help tenants decide whether to exercise right to buy etc

441.     Previously, landlords had a duty under section 104 of the Housing Act 1985 to provide general information about the express terms of their secure tenancies, the Right to Buy, and the landlord's repairing obligations. This section places an additional, more specific, duty on landlords to supply information to tenants about such matters as the Secretary of State specifies by Order, to help tenants decide whether to exercise the Right to Buy. The Secretary of State's functions in respect of Wales have been transferred to the National Assembly for Wales.

442.     It is intended that the matters will mainly concern the responsibilities and consequences of being a homeowner, such as meeting the costs involved in buying and maintaining a property - for example, stamp duty, fees, and insurance - and then the costs of repairs and maintenance (including service charges levied on leaseholders who have bought flats).

443.     Landlords will have to keep the information up to date, so far as is reasonably practicable, and must make the information available in accordance with the requirements of new section 121B of the Housing Act 1985, i.e. at the landlord's principal offices and such other places as it considers appropriate. The landlord must also publish the information and supply copies of it directly to tenants at such times as are prescribed by the Secretary of State.

     Section 190: Termination of rent to mortgage scheme

444.     The Rent to Mortgage scheme is a form of shared ownership for those tenants who cannot afford to buy their homes outright under the Right to Buy scheme. Section 190 will end the scheme. There will be a grace period of 8 months after Royal Assent, during which existing tenants who are eligible to buy under the Rent to Mortgage scheme can still do so.

Section 191: Secure Tenancies: Withholding Of Consent To Mutual Exchange

445.     Mutual exchanges occur when two tenants of social landlords swap homes by legally assigning their tenancies to each other. The permission of the landlord of both tenants is required. The landlord of a secure tenant can not refuse permission unless the grounds set out in Schedule 3 to the Housing Act 1985 are met.

446.     Section 191 introduces a new Ground 2A into Schedule 3 of the Housing Act 1985. The landlord of a secure tenant may refuse an application if a specified type of injunction, an anti-social behaviour order or a possession order granted on the grounds of nuisance is in force or if court action to obtain such an order or a demolition order is pending against the tenant, the proposed assignee or a person who resides with either of them.

447.     A demotion order is an order obtained under provisions inserted in the Housing Act 1985 and the Housing Act 1988 by the Anti-Social Behaviour Act 2003, which ends a secure or an assured tenancy and replaces it with a demoted tenancy, which is essentially a probationary tenancy.

448.     An anti-social behaviour order is an order obtained under the Crime and Disorder Act 1998, which places specified limitations on the conduct of the individual against whom it is made.

Section 192: Right to Buy: suspension by court order

449.     Section 192 will enable landlords of secure tenants to seek an order suspending the right to buy for a specified period in respect of the tenancy on the grounds of anti-social behaviour. The court may only grant such an order if it is satisfied that the tenant or a person residing in or visiting the property has engaged or threatened to engage in anti-social behaviour (which includes using the premises for unlawful purposes), and that it is reasonable to make the order.

450.     When deciding if it is reasonable to make the order, the court will consider, in particular, whether it is desirable for the property to be managed by the landlord during the suspension period, and to the effect the behaviour has had, or would have if repeated, on other people.

451.     A suspension order will end any existing applications to exercise the RTB and prevent any new applications being made during the period specified by the court. The suspension of the RTB does not have any impact on the accumulation of discount or qualifying period.

452.     The landlord may request, on one or more occasions, an extension to the suspension period, however the court may not extend the suspension period unless, since the making of the suspension order (or since the last extension) the tenant, or a person residing in or visiting the property, has engaged or threatened to engage in anti-social behaviour, and that it is reasonable to make the further order.

453.     Section 192 allows regulations to be made that will continue the effect of a suspension order where the secure tenant becomes an assured tenant, as he would otherwise be able to exercise the Preserved Right to Buy (sections 171A-171H Housing Act 1985), or the Right to Acquire (section 16-17 Housing Act 1996), instead of the Right to Buy.

Section 193: Right to buy: suspension of landlord's obligation to complete

454.     Section 193 prevents a tenant from being able to compel completion of a Right to Buy sale if an application is pending for a demotion order, a suspension order, or a possession order sought on the basis of Ground 2 of Schedule 2 of the Housing Act 1985 (anti-social behaviour), until those proceedings have ended, and none of those orders have been made. If a demotion order or outright possession order is made, the tenant will lose their secure tenancy and thus also lose the right to buy. If a suspension order is made, it will end any existing applications to exercise the RTB and prevent any new applications being made during the period specified by the court.

455.     A demotion order is an order obtained under the Anti-Social Behaviour Act 2003 which ends a secure tenancy and replaces it with a less secure form of tenancy, which is essentially a probationary tenancy. After the demotion period, normally one year, a tenant may become a secure tenant again and regain the right to buy.

456.     A suspension order is an order suspending the right to buy for a specified period in respect of the tenancy on the grounds of anti-social behaviour obtained under section 192 of this Act.

Section 194: Disclosure of information as to orders etc. in respect of anti-social behaviour

457.     This section allows any person to provide relevant information to a landlord of a secure tenant to enable the landlord to exercise its discretion under new sections 191 and 193. It also allows regulations to be made to allow information to be disclosed to a landlord of an assured tenant on the same basis in respect of applications for the preserved right to buy and the right to acquire. This section applies to information as to whether any of the specified orders or proceedings relating to anti-social behaviour are in force or pending.

Sections 195-198: Disposals by local authorities

458.     These sections carry over the changes made in respect of the Right to Buy in sections 185-188 to voluntary disposals by local authorities of properties at a discount under section 32 of the Housing Act 1985.

459.     Voluntary disposals by local authorities can be made under section 32 of the Housing Act 1985, but require the Secretary of State's consent. A General Consent has been issued permitting sales at a discount, but only on terms that mirror the Right to Buy scheme. Specific consent can be granted to sell properties on more generous terms, however, if necessary or desirable in particular circumstances.

460.     With respect to section 197, and the landlord's right of first refusal, the Government wishes to preserve the existing position for local authorities in rural areas. Local authorities can choose between a right of first refusal, and a restriction requiring sales to be made only to local people. The General Consent will allow this freedom of choice to continue.

Sections 199 -201: Disposals by Registered Social Landlords

461.     These sections carry over the changes made in respect of the Right to Buy in sections 185 -188 to voluntary disposals by Registered Social Landlords of properties at a discount under section 9 of the Housing Act 1996.

462.     The voluntary disposal of properties by Registered Social Landlords (e.g. housing associations) under section 9 of the Housing Act 1996 requires the consent of the Housing Corporation. General consent has been given for properties to be disposed of at a discount, on terms no more generous than the statutory Right to Buy or Right to Acquire scheme, where the Registered Social Landlord has a voluntary sales policy in place. Registered Social Landlords that do not have a voluntary sales policy in place require specific consent from the Corporation in respect of any disposals. Specific consent can be sought from the Housing Corporation if a Registered Social Landlord wishes to dispose of properties on more generous terms, if necessary or desirable in particular circumstances.

463.     With respect to section 200, and the landlord's right of first refusal, the Government intends to allow Registered Social Landlords in rural areas to choose between a right of first refusal, and a restriction requiring sales to be made only to local people. The Housing Corporation's consent will allow this freedom of choice.

Section 202: Right of assured tenant to acquire dwelling not affected by collective enfranchisement

464.     This section preserves the Right to Acquire for assured tenants of Registered Social Landlords (RSLs) in cases where long leaseholders living in the same block of flats as non-qualifying assured tenants enfranchise (i.e. purchase the freehold compulsorily).

465.     Under the Leasehold Reform, Housing and Urban Development Act 1993, qualifying tenants of flats (i.e. long leaseholders) were given rights to collective enfranchisement. By Schedule 9, paragraph 3, where flats are let out to non-qualifying tenants (i.e. those who are not long leaseholders) by a housing association freeholder, and enfranchisement occurs, there is a mandatory leaseback by the new freeholder to the housing association of those flats, so that the housing association remains as the immediate landlord of the tenants. (Housing association includes RSLs in this context).

466.     The Right to Acquire (RTA) is a statutory scheme under which some tenants of RSLs are given the right to purchase their rented home at a discount by section 16 of the Housing Act 1996. Previously, in order for the Right to Acquire to apply, section 16(3)(a) required that the freehold interest in the dwelling must at all times have been held by an RSL or a public sector landlord.

467.     Therefore, when a group of RSL leaseholders enfranchise, the other RSL assured tenants in the same block who are not long leaseholders lose their statutory Right to Acquire their rented home. This was an unintended consequence of leasehold legislation.

468.     Section 202 extends the definition of freehold interest in the dwelling (in section 16(3) of the Housing Act 1996) so that it still applies even where a mandatory leaseback has taken place. The section thereby preserves the Right to Acquire for RSL assured tenants in cases where a group of leaseholders in the same block buy the freehold. The Right to Acquire is conferred also upon those from whom it has already inadvertently been removed.

Sections 203 -205: Disposals by housing action trusts

469.     These sections carry over the changes made in respect of the Right to Buy in sections 185-188 to voluntary disposals by Housing Action Trusts of properties at a discount under section 79 of the Housing Act 1988.

470.     Voluntary disposals by Housing Action Trusts can be made under section 79 of the Housing Act 1988, but require the Secretary of State's consent. Consent would not generally be given for disposals on terms more generous than the Right to Buy, but specific consent could be given to sell properties on more generous terms, however, if necessary or desirable in particular circumstances. Voluntary disposals by Housing Action Trusts are not common, but may become more frequent as the few remaining Trusts near the end of their work and need to find new owners for all their property.

471.     Of the three remaining Housing Action Trusts, two will close in 2005 and the last will conclude its work by the end of 2007.

Section 206: Particulars of site agreements to be given in advance

472.     Section 206 substitutes section 1 and amends section 2 of the Mobile Homes Act 1983, which concern agreements made between a site owner and an occupier wishing to station a mobile home on a site, their terms, and the enforceability of the terms of that agreement.

473.     Site owners are now required to provide a prospective occupier with a written statement of the terms of the occupation agreement 28 days before any agreement for the sale of the mobile home to the occupier is made. A shorter period can be agreed in writing between the parties if they so choose.

474.     If a site owner has not provided the written statement in advance as required, he may not enforce any of the express terms of the agreement, unless he applies to court within six months of either the making of the agreement or of providing the statement (whichever is the later), for an order that the express terms should have full or partial effect. Where an express term is for the benefit of other occupiers of the site, it is considered more likely that a court will agree that it should be enforceable against the occupier. However the court will have to balance those considerations against how fair it is to the occupier to be bound by a term of which he had no, or insufficient, notice.

475.     An occupier can rely upon express terms which are in their favour, even if the statement is not provided in time by the site owner, and can enforce such a term any time after the agreement has been made in the normal way by issuing court proceedings.

476.     The existing power for either party to apply to court for an order to change or delete an express term - as opposed to enforcing a term - is preserved. However, the time limit has been changed so that applications must now be made within six months of the making of the agreement, or six months of receiving the written statement (whichever is later).

477.     If a site owner fails to produce a written statement at all, the occupier can apply to the court any time after the making of an agreement for an order requiring the site owner to produce the written statement.

478.     The provisions, which set out the requirements with which a statement must comply, and which give a power to the Secretary of State to prescribe further requirements, are also preserved.

Section 207: Implied terms relating to termination of agreements or disposal of mobile homes

479.     Section 207 amends paragraphs 6, 8 and 9 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 and adds Part 3 to that Schedule.

480.     Section 207(2) amends paragraph 6, the grounds upon which a site owner may apply to court to end an agreement with an occupier, is to remove the "age" of the home as a relevant factor for termination of agreement. A site owner may continue to apply to court to end an agreement on the basis that the "condition" of a home is having a detrimental effect upon the amenity of the site, or is likely to have such an effect in the next five years. Section 207(2) also gives discretion to the court to adjourn termination proceedings to give the occupier time to effect particular repairs, if this would be reasonably practicable, and if the occupier has indicated that he is willing to carry out those repairs.

481.     Section 207(3) amends paragraph 8, and applies where an occupier wishes to sell their home. Occupiers are only permitted to assign their occupation agreements to a person approved of by the owner, although this approval cannot be unreasonably withheld. A time limit of 28 days has been introduced, by the end of which the site owner must approve the potential purchaser, unless it is reasonable for him not to do so, and also must give or withhold approval in writing. If the approval is given subject to conditions, the conditions must be specified. If approval is withheld, then reasons must be given. If at the end of the 28 day period, the occupier has not received a decision in writing, they can apply to the court for an order declaring that the person is approved. The duty to give approval is a contractual duty. Breach of this duty means that the occupier could seek an award of damages for breach of contract.

482.     Section 207(4) makes similar provision where an occupier wishes to gift their home, and carries across the changes of paragraph 8 to paragraph 9.

483.     By 207(5), a new duty is imposed on a recipient of an occupier's request for approval, where the recipient is not an owner, but does have an estate or interest in the site. The recipient will be under a duty to pass the request on to the owner.

484.     The duty to pass on a request for approval is a statutory duty, breach of which entitles the occupier to seek an award of damages from a court.

485.     These changes will generally apply to existing agreements, as well as to those made on or after the day on which this Act comes into force. However, they will not affect any application to terminate an agreement which has been made before the day that the section comes into force, nor will they affect any requests for approval made before that day.

Section 208: Power to amend terms implied in site agreements

486.     Section 208 inserts a new power in the Mobile Homes Act 1983 for the appropriate national authority to make an order to prescribe new implied terms for site agreements and to amend or delete existing terms.

487.     The first time this power is exercised, the order can affect the implied terms in existing agreements between site owners and occupiers, that is, agreements which were made before the day on which this order comes into force, so exercise of the power can have retrospective effect. However, future exercises of the power cannot be retrospective.

488.     The appropriate national authority must consult organisations which are representative of interests which would be affected by such an order, such as those representing occupiers, and also those representing site owners. Both Houses of Parliament must approve any order made under the power.

Section 209: Protected sites to include sites for Gypsies

489.     Section 209 amends section 1 of the Caravan Sites Act 1968 to extend the meaning of 'protected site' to include sites owned by County Councils providing accommodation for Gypsies. This will mean that sections 2-4 of the Caravan Sites Act 1968 will apply to these sites and the occupiers of them, i.e. the requirement for minimum length of notice in section 2,

the protection from unlawful eviction and harassment contained in section 3, and provision for the suspension of eviction orders in section 4. The change does not have any retrospective effect, i.e. it does not affect any notice given or proceedings begun before section 209 comes into force, or conduct occurring before that date.

Section 210: Extension of protection from harassment for occupiers of mobile homes

490.     Section 210 amends section 3 of the Caravan Sites Act 1968 to give mobile home occupiers equivalent protection to that given to tenants in conventional housing against harassment and unlawful eviction.

491.     Section 210(2) amends the existing offence in section 3(1) (offence where a person, with the specified intent, does acts calculated to interfere with the peace or comfort of the occupier etc.), so that "likely to interfere" is substituted for "calculated to interfere" with the peace or comfort. This should make it easier for local authorities to prosecute site owners who harass occupiers with the intention of making them leave their home, or to refrain from exercising any right or pursuing any remedy.

492.     Section 210(3) makes it an offence for a site owner or his agent to do acts likely to interfere with an occupier's peace and comfort or to persistently withhold services if he knows or has reasonable cause to believe this will cause the occupier to leave his home, or to refrain from exercising any right or pursuing any remedy. It enables local authorities to prosecute for harassment without needing to prove an actual intention on the part of the site owner (or agent) to harass.

493.     Section 210(4) makes the offences in the Caravan Sites Act 1968 either-way offences instead of summary only. It also increases the maximum sentence available on summary conviction from 6 to 12 months' imprisonment. The maximum sentence for conviction on indictment is 2 years.

Section 211: Suspension of eviction orders

494.     Section 4 of the Caravan Sites Act 1968 gives discretion to the courts to suspend eviction orders made in respect of most privately owned caravan sites. Section 205 extends this discretion to local authority owned and managed caravan sites, allowing the courts to suspend any order for periods of up to 12 months at a time. The change does not affect any proceedings begun before Section 211 comes into force.

Section 212 : Tenancy deposit schemes

495.     Section 212(1) places a duty on the appropriate national authority to make arrangements to ensure that one or more tenancy deposit schemes (TDSs) are established to safeguard deposit monies paid in connection with assured shorthold tenancies.

496.     Section 212(2) provides that TDS schemes will have two main purposes. They must aim to safeguard tenancy deposits paid in connection with an assured shorthold tenancy and to facilitate the resolution of disputes arising in connection with such deposits. All authorised tenancy deposit schemes must comply with the requirements of Schedule 10.

497.     The appropriate national authority will be able to make arrangements with a body or person, known as the scheme administrator, to set up and manage a TDS on their behalf. The intention is for these to be contractual arrangements with private organisations. However, the sections do not limit these arrangements to just private organisations; the appropriate national authority is free to make arrangements with either private or public organisations.

498.     Schemes are expected to be self-financing, but section 212(4) allows the appropriate national authority to give financial assistance, for example by way of a grant or to make payments to procure one or more schemes if necessary. The authority will also be able, if it wishes, to provide a financial guarantee for schemes, for example should the scheme be at risk from becoming insolvent. However, the appropriate national authority is under no obligation or duty to cover all, or any, of a scheme's financial obligations.

499.     Section 212 (7) allows the appropriate national authority to make regulations giving additional powers to or conferring duties upon scheme administrators in connection with the arrangements made between the administrators and the appropriate national authority.

500.     Section 212(8) defines a tenancy deposit as money, in the form of cash or otherwise, intended to be held as security against an assured shorthold tenants' performance of his obligations or the discharge of his liabilities in connection with the tenancy.

Section 213: Requirements relating to tenancy deposits

501.     From the time these provisions come into force all landlords and their agents will be required to ensure that any deposit required in relation to an assured shorthold tenancy is safeguarded by a tenancy deposit scheme. Landlords, agents or tenants will not be able to avoid the legislation by agreeing that a deposit should not be safeguarded by a scheme. If a deposit is required the landlord or his agent will always be required to comply with the provisions. Within 14 days of the landlord or his agent receiving a deposit he must ensure that the deposit is safeguarded by an authorised TDS in accordance with the scheme's requirements and give the tenant and, if relevant, the person who paid the deposit, such information as is prescribed by the appropriate national authority as to which scheme is safeguarding their deposit, how the scheme's initial requirements have been met and details of the relevant legislation which protects their deposit.

Section 214: Proceedings relating to tenancy deposits

502.     The tenant, or the person, who paid the deposit, will be able to apply to the court for an order requiring the person holding the deposit to repay the deposit or to pay it into a custodial scheme in two circumstances. Firstly, where a landlord has not safeguarded a deposit in accordance with the initial requirements of a scheme or given the tenant the required information within 14 days. Secondly, where the landlord has informed the tenant that a particular scheme is safeguarding the deposit and the scheme has not been able to confirm this.

503.     If at the court hearing the court is satisfied that the landlord has not complied with the initial requirements of a scheme or provided the information required by section 213 (6)(a) or that the deposit is not being safeguarded by an authorised scheme the court must either order the person holding the deposit to repay the deposit to the applicant or pay it into an authorised custodial scheme within 14 days of the order being made. The court must also order the landlord or his agent to pay the applicant an amount equivalent to three times the deposit.

504.     Where a landlord or his agent has taken a deposit which could not be lawfully required, i.e. one which does not consist of money, the person who gave it to the landlord or his agent is entitled to recover it through the courts.

Section 215: Sanctions for non-compliance

505.     The landlord may not serve a notice under section 21 of the Housing Act 1988 at any time where a deposit is not being safeguarded in accordance with an authorised scheme or where either the initial requirements of the scheme have not been met or the prescribed information regarding the safeguarding the deposit has not been given. Under section 21 of the Housing Act 1988 a landlord can obtain an order for possession of an assured shorthold tenancy at any point after the first 6 months of the tenancy providing that any fixed term has expired and that they have given the tenant at least 2 months notice. This is sometimes referred to as the 'notice only' ground for possession as there is no need to prove fault on behalf of the tenant.

506.     A landlord also cannot use this 'notice only ground' for possession while they are holding a deposit which could not be lawfully required, i.e. one which consists of something other than money.