Uncertain times for tenants
Co-operatives need clarification over tenure regime for members, says Brynmor Adams, barrister at Five Paper
In the past 12 months there has been plenty of legislation for the housing sector to digest. The Localism Act 2011 has introduced fundamental changes to tenure, allocations and finance, and the Welfare Reform Act 2012 poses serious challenges for tenants in social housing. It is unsurprising that less time is spent studying the obscure world of private members’ bills.
The 10-minute rule gives backbench MPs an opportunity to introduce legislation on issues they consider important. This can lead to unusual schemes. Recent bills have proposed the minting of one kilogram, 22-carat gold coins, a tax freedom day and saving the chequebook. Occasionally, however, backbenchers cast the parliamentary spotlight on an issue of genuine importance.
One such proposal was the Co-operative Housing Tenure Bill, introduced by Jonathan Reynolds, MP for Stalybridge and Hyde. The bill sought to establish a new tenure regime for people residing in properties owned by fully mutual housing co-operatives.
The fundamental principle underlying housing co-operatives is that they are owned by their members, that is, their tenants. Co-operatives are exempted from statutory security of tenure; the rationale being that their democratic nature instead acts as a safeguard for the tenants.
Co-operatives play an important, if sometimes overlooked, role in social housing provision in England and Wales, for instance by making use of shortlife properties owned by local authorities or housing associations (Inside Housing, 13 April).
The bill could not have been introduced at a more appropriate time. In 2011, the Supreme Court heard the case of Berrisford v Mexfield Housing Co-operative. The court decided that the restrictions on the co-operative’s ability to end Ms Berrisford’s tenancy resulted in the unlikely outcome that she had a 90-year lease.
The decision has created a great deal of uncertainty for housing co-operatives which are now unsure of when and how they can terminate the tenancies of members who fail to comply with their tenancy agreements. Parliament therefore needs to legislate to provide certainty for co-operatives and their members.
Unfortunately, the Co-operative Housing Tenure Bill would not have simplified existing law. Instead, it proposed creating a whole new tenure regime for co-operatives, existing outside the familiar parameters of landlord and tenant law. This unnecessarily discards this efficient and long-standing framework for managing relationships in the housing context and would have led to unnecessary complication and litigation.
On 30 March, the Co-operative Housing Tenure Bill was not moved for debate and is unlikely to become law. However, it reminds us that there remains a need for parliament to legislate to clarify the law for housing co-operatives and to provide certainty for this important part of the social housing sector.