The Homelessness Reduction Act – issues arising for property guardianship
The Act will implement a new definition of ‘homelessness:’
(4) ‘A person is threatened with homelessness if it is likely that he will become homeless in 56 days’ (extending the number of days from 28 to 56).
(5) ‘A person is also threatened with homelessness if:
a) a valid notice has been given to the person under section 21 of the Housing Act 1988, in respect of the only accommodation the person has that is available for the person’s occupation; and
b) that notice will expire within 56 days.’
I believe that property guardians will not fit into the (5) “section 21 category” as they are not assured shorthold tenants and therefore do not need to be served section 21 notices. It seems the (5) “section 21 category” has been added to clarify that not all persons served a section 21 notice will automatically fit into this category (as section 21 notices must give at least 2 months’ and may sometimes give more) and to limit the extent of the new duties. Property guardians should fit into the revised (4) category as they are “threatened with homelessness” within 28 days.
The Act’s main provision is that local authorities will now be duty bound to prevent someone from becoming homeless. The local authority will need to carry out an assessment on why that individual will become homeless, and advise them how to best secure their current accommodation, by creating a personalised plan for that individual. The council must show they have taken reasonable steps to stop that person becoming homeless.
At present, we often encounter local council’s practice of insisting that guardians await possession proceedings, a possession order and sometimes even a date for the execution of a warrant – all before accepting them as homeless. A particular commercial conflict in scenarios where your client is a local council.
I now foresee a scenario where a guardian is served a Notice To Determine and they go to their local council for a personalised homeless prevention plan. The local council is inundated with applicants and to buy more time, advises the guardian to insist on a section 21 notice, i.e. essentially refusing to vacate your property and defending trespass proceedings.
Under the new Act, local authorities will also have a ‘relief’ duty, to take reasonable steps to secure accommodation for any eligible person who is homeless.
In other words, they will now have a duty to provide advisory services about how those threatened with homelessness can secure accommodation, be it temporary or permanent.
In this case, the property guardianship model could become very appealing to local councils who are now duty bound by the Act to offer housing solutions to those in need.
Are you doing enough to promote your business to local authorities as a viable temporary housing alternative? In my experience, many local authorities sadly remain sceptical about the scheme. Though query the extent to which you can offer secure accommodation (given that you may have to hand back at any time) and that your licences are only available to adults. Perhaps the London Assembly Housing Committee’s property guardianship report will touch on this overlap.
A legal minefield I agree, but also a real opportunity for guardianship companies to consider this new Act as an opportunity and how their business model can respond to these challenges?
You could be offering an affordable housing solution to many, an advice outlet for councils, and a way for Government to lower its homeless figures. You could also communicate to prospective commercial clients that adopting the scheme could form part of their corporate social responsibility obligations?
For property guardian providers, my view is that the amendments to the Act may be a double-edged sword and have potentially inadvertently created a further grey area relating to property guardianship.
I plan to discuss this further with my contacts at the London Assembly Housing Committee who were involved in preparing the ‘Hidden Homelessness in London’ report and will share any findings with you. Due to a change in personnel at the London Assembly, we expect the property guardianship report to be slightly delayed: now expected at the end of January/early February 2018.
In the meantime, if this has given you new ideas about potential business models, or you are concerned about how local councils might offer further legal support to guardians you want to vacate, please get in touch to discuss.Back to Our Thinking →