Death and succession

The new arrangements

The succession provisions in the Act apply to both standard and secure contracts. Broadly speaking, the Act provides for two successions, if the first succession is to the spouse or civil partner of the contract holder or to someone who had been living with the contract holder as if they were their spouse or civil partner before they died.

Priority successors

The first succession is to a “priority” successor, if there is one. That is to someone who is a spouse or civil partner, or living with the deceased as if they were. The successor must have been occupying the dwelling as their only or principal home at the time of the contract holder’s death.

Strange as it may seem, the Act deals with what happens if there are two persons who qualify as a priority successors – they must agree who should succeed, or the landlord will decide.

If the deceased was him or herself a priority successor, then there cannot be any further priority succession. There can however be a reserve succession.

Reserve successors

If there is no priority succession (i.e. because there is no spouse, civil or live in partner OR there is but the deceased was him or herself a priority successor) there can be a reserve succession.

A reserve succession can be to:

A family member who (1) occupied the dwelling as their only or principal home at the time of the Contract Holder’s death, who (2) must also have been living with the contract holder or occupying the dwelling throughout the 12 months prior to the death. “Family member” includes a spouse, civil partner or person living as if they were, as well as parents, grant parents, children, brother, sister, uncle, aunt, nephew and niece. It includes relationships where one parent is shared and step-relationships.

A carer – i.e. someone who (1) at any time in the 12 months before the death was a carer of the contract holder or a family member who lived with them. The carer must also (2) have been occupying the dwelling as their only or principal home at the time of the death, and (3) have lived with the contract holder or at the dwelling for 12 months prior to the death. There is one further hurdle here – (4) that the carer must not have any other dwelling they were entitled to occupy as a home at the time of death.

Other noteworthy points

If the contract holder themselves was a reserve successor, no further succession can occur.

Where a joint tenancy becomes a sole tenancy on the death of a joint tenant, the contract will still automatically become a sole one. However, that is not a “succession”. As a result there can still be two further successions afterwards. If the surviving joint contract holder has a new partner or remarries, there may be two further changes in the identity of a contract holder as a result of death.

If the contract holder who died (D) had succeeded themselves to the contract as a priority successor after the death of the original Contract Holder (O) then on D’s death:

The member of the family reserve succession may be claimed by someone who was a member of the family of the original contract holder (O) provided they lived with O throughout the 12 months before they died and were living with D at the time D died too.

The carer condition (condition 1) can be met if care was provided to O (or a member of their family) provided it was within the 12 months prior to their death.

Care does not count if it is given because of a contract with any person (although being given board and lodging does not count as a “contract”).

If a priority successor ends the contract within 6 months, then a substitute succession will happen if there is someone else who is entitled to succeed.

If a successor applies to transfer their contract (whether as part of a mutual exchange or not), the landlord may make it a condition of consent that the person coming into the property (the “transferee”) brings their “succession status” with them on transfer. I.e. that they are treated as a priority or reserve successor in relation to the property which they are moving into.

If a contract ends, but within six months there is a new secure contract with the same contract holder either of the same dwelling or with the same landlord (but a different dwelling), the contract holder’s succession status under the first contract applies to the second – i.e. if they were a reserve successor in relation to the first, there cannot be any succession to the second.

What if there are multiple people who are entitled?

They must first of all try and agree who should succeed.

If they cannot agree, the landlord will decide who the successor should be.

If the landlord decides, the successor who is not given the contract has the right to challenge the landlord’s decision at court provided the challenge is made within four weeks of the decision.

When does the succession occur and do we need to assign the contract or complete any paperwork?

If there is only one successor who is entitled the succession will happen automatically on the day the contract would have ended if there were no successor (this is provided for in s155 – it is one month from death, or earlier if the deceased’s representatives/occupiers give notice).

If there is more than one successor, the succession happens automatically on the later of the date of agreement, the date the landlord decides who the successor should be or the date provided for in s155.

If a person succeeds because they have successfully challenged a landlord’s decision, the will become the contract holder on the later of the date in s155 or the date the appeal is determined – in practice it will be the latter.

If those rules mean there is a gap between the date the contract would have ended under s155 and the date of the succession, then in the meantime any successors who are living at the dwelling are not treated as trespassers and for the purpose of any liability under the contract they are treated as if they were joint contract holders – i.e. they are liable to pay the rent and perform any other contract holder responsibility (e.g. give access, pay service charges).

What happens to tenants who have already succeeded to their tenancies when the Act becomes law in December?

The law will be different for assured and secure tenants, because the transitional provisions deal with successions which have already happened because an existing law deals with it but not where the succession happened because the tenancy allowed it – which is the case for many successions to assured tenancies. Hence if the current tenant is a tenant because they have succeeded:

To a secure, introductory or demoted tenancy as a spouse or civil partner or as someone who lived with the tenant as if they were married at the point the tenant died.

To an assured tenancy because they were the spouse or civil partner, or someone living with them as if they were a spouse or civil partner.

Then they will be considered a “priority successor” in relation to the contract as of 15th July. That means there can be a further reserve succession but no more.

If a tenant has succeeded to secure or introductory tenancy as a member of the family (not a spouse, civil partner or partner) who lived with the tenant for 12 months before the death, it is likely that they will be considered a “reserve successor”. However, the drafting of schedule 12 is a little unclear on this and we are seeking clarity.

A tenant who has succeeded to a demoted tenancy as a member of the family will be a “reserve successor”.

If the tenant is a reserve successor there can be no further succession.

The key difference is that where anyone who succeeded to an assured tenancy because they were a member of the family or a carer of the original tenant before December, the slate will be wiped clean and there can be a priority succession as well as a reserve succession.

Q When deciding on who is entitled to succeed in cases beyond 1 December, do we consider previous successions (i.e. under the existing tenancy)?

If this is the case, please can you reference the section of the Act that confirms this?

It has been suggested to us that, as priority/reserve successors did not ‘exist’ prior to this legislation, we cannot apply this criteria to new succession cases?

> This is covered by the transitional arrangements which are set out in schedule 12 para 20 and 21 so that anyone who succeeded in accordance with sec 89 and section 87 (a) of the 1985 Act prior to implementation (i.e. as a spouse or civil partner) will be treated as a priority successor so that on their death there can only be a reserve succession.

If they succeeded under 87(b) (as another member of the family) then they will be a reserve successor which means there can be no further successions. NB these rules will only apply to previous secure tenants. An assured tenant who succeeded under the terms of the tenancy (i.e. as a member of the family rather than a spouse or civil partner) will not be a “reserve” or a “priority” successor, so for them the slate is wiped clean.

Q When a tenant dies and there is no successor, the Act says the contract ends in a month, can you please clarify the date?

For example, if a tenant dies on 01/05/22, does the tenancy end on 31/05/22 or 01/06/22 and what date would it fall if it was Feb i.e. 28 day month? (Can it end mid- week if it is a weekly periodic tenancy).

What happens if a PR or permitted occupier tells us of the death earlier?

> When the Act refers to a month it means a calendar month so the tenancy will end on 1 June 2022, it makes no difference if it is a short month. Yes, it can end mid-week. If there is no successor but a permitted occupier or PR notifies you, the contract will end when you are notified. That is only if the notification comes from the correct person though.

Q Where a succession has occurred, does the successor get a new contract and written statement and should they get this before 14 days have expired after the date of death?

What happens if it is later due to enquiries being made and evidence requested which is provided later than 14 days?

Will they be eligible for compensation?

> Yes, as this is a change of CH you need to provide the successor with a copy of the deceased tenant’s occupation contract together with all the other documents that were provided to the deceased tenant either at the commencement of the tenancy or on conversion (e.g., RHW2, EICR, gas safety certificate and EPC). (It is important that they get the terms of the contract they succeeded to, it is not a “new” contract)

The deadline is 14 days from the succession (which is the normally the date the contract would otherwise have ended if there is only one eligible successor but may be earlier if you are notified by an appropriate person). You cannot delay this even if you are not yet in a position to accept that the succession has occurred.

However, you are clearly entitled to evidence to satisfy yourselves that the succession will or has occurred and so enquiries are necessary. We would recommend that you ensure potential successors are asked for relevant documents as early as possible. If enquires are still ongoing when the deadline is approaching, we advise landlords to send the occupation contract and all related documents with a letter explaining that it confirms the terms of the contract for anyone who is entitled to succeed but that the succession itself will not be confirmed until enquiries are complete. See paragraph 39e) of Practice Note 4.

Q What happens to any arrears that the deceased tenant had accrued prior to death and where there is a succession?

> There is case law (albeit in relation to a Rent Act tenancy from 1926!) that says successors do not become liable for the arrears of the deceased tenant as they were not party to the contract at the time they arose. Hence the arrears will remain with the estate and are not passed on.

Q What happens to any possession order that the deceased tenant had prior to death and there is succession?

> This is no different to the current position. The successor takes the property subject to the possession order, but to enforce it the landlord needs to apply to the court to add the successor as party first. If the order was made on anything but the mandatory grounds, the court can suspend or stay possession hence the question is more about whether it is reasonable and proportionate in the circumstances to seek to enforce it now that the tenancy has passed to the successor. That will depend on all of the circumstances. It will be for you to assess and decide the best course of action. The successor should be made aware of any orders or concerns with the tenancy.

Q If a partner moves in 2 days prior to a tenant death, will they have priority succession rights?

> It will depend whether you are satisfied they were living together “as though they were a spouse or civil partner” and whether the property was the partner’s only or principal home at the time of the death.

Q If the contract ends a month after the death of sole contractor how could we continue to accept payment from a potential successor or an occupier that may have no right to succession?

Does the contract in all cases end a month after the death of a sole contract holder?

> Yes, if there is no successor the contract will end automatically. If there is a successor it does not end. The succession happens automatically if there is just one. The Act provides for a “limbo” situation where there is more than one successor (the contract continues and any successor living in the property is treated as if they are a contract holder until the succession is resolved).

However, if there is just one claimed successor but their right to succeed has not yet been established, the situation depends on whether the right exists. As such there could be a situation where the succession has not yet been resolved (i.e. evidence of the right may not have been produced) but a month after the death either the contract has ended or it has automatically passed to the successor despite the fact that it has not yet been resolved. Landlords will need to take care here.

Q What liability would any occupier have to pay and would it be advisable to set up a separate account, similar to how we now charge mesne profit?

> The occupier has no personal responsibility to pay you until the contract ends, although the estate is liable.

If they stay beyond the month, then

1. if they are a successor they are the contract holder (whether yet evidenced or not) and that is the basis of their liability.
2. if they are not a successor, they are liable to pay you – either as a trespasser (in which case it is mesne profits), or if you give them permission to stay then it is on the basis that they have an agreement with you. However, take great care as two months after you accept the first payment a standard contract will arise.
3. if there is more than one successor then until the succession is resolved the Act provides that if they are resident they are liable as if they were joint contract holders until the succession is resolved.

Q Please can you explain the actions which are available to deal with cases when someone is left in occupation after a death, and they are under occupying a property without succession rights?

As discussed, we have some occupants who are currently residing in properties and have been paying “use in occupation” payments.

Do we need to offer intro contracts to these occupants once the act is implemented?

Can an alternative contract be offered i.e. standard contract on the understanding they downsize?

> No, unless you are happy for them to remain in the property you should avoid having to offer anything on 1st December. As far as you possibly can these cases will need to be resolved prior to December, ideally by moving them to alternative accommodation. If that is not possible then to avoid an implied contract arising you will need at least to “show an intention to treat them as a trespasser”, and possibly go as far as commencing possession proceedings.

If you are unable to move them and have not taken positive steps to secure possession, then on implementation of the Act if you have accepted more than 2 months’ rent then they will become standard occupation contract holders by virtue of section 238. You do not need to serve a section 13 notice in this instance to make the contract standard, but you do need to serve a written statement and other documents.

Then, to end the standard contract a 6-month notice is required that cannot be served within the first 6 months of occupation (unless there are breaches of the contract in which case you can apply for possession on the breach of contract ground). Either way, given the length of time it is likely to take to end it I would have thought this is something best avoided if possible.

That said if you are happy that they should remain in the property, they should be given an appropriate contract.