The recent Berrisford vs. Mexfield Housing Co-operative Ltd Supreme Court judgement has highlighted just how unsatisfactory the current state of the law is in dealing with the relationship between a housing co-operative and its members. The case has brought into question the legal status of tenancy agreements issued by every housing co-operative in the country.
Since feudal times, our tenure laws only recognize two forms of housing tenure – ownership and tenancy. However, the majority of the members of Co-operative housing schemes are issued with ‘a periodic tenancy,’ which is one that is granted week-to-week or month-to-month and continues on that basis until brought to an end by the tenant or landlord serving notice to end it. The Supreme Court judgment ruled that ‘a periodic tenancy’ was not a tenancy on the basis that since the clauses in the co-operative’s tenancy agreement specified particular circumstances in which the tenancy could be brought to an end, it created an ‘uncertain term.’ As no tenancy could be for an ‘uncertain term,’ the Supreme Court ruled that it should be considered as a ‘tenancy for life’, which the 1925 Law of Property Act specified should be fixed at 90 years or the duration of a tenant’s life. The decision has forced many housing co-operatives to re-evaluate their tenancy agreements and has negatively affected their residents as it meant that residents would no longer be able to rely on the ‘right to repair’ in Section 11 of the Landlord and Tenant Act 1985 as this only applies to those tenants with a short tenancy.
Our country is still following laws that were set in place before periodic tenancies were even invented.
That is why I introduced the Co-operative Housing Tenure Bill in the House last year to acknowledge Co-operative Housing Tenure in Law for the first time. The Bill would have formally recognized the nature of housing co-operatives and allowed them to provide their members with their many benefits without problems. Co-operative housing models not only provide people with affordable housing, they also provide residents with democratic control of the property in which they live and a greater say over the management and maintenance of the property that they would not have as tenants. In addition, they allow residents input into the conduct or rules of membership. Co-operative housing espouses the values of respect and mutualism, but the recent Supreme Court decision has opened the door to potentially complex and costly legal processes for them.
Therefore, in light of the Supreme Court judgement, I believe the Department for Communities and Local Government should provide immediate assistance to housing co-operatives in dealing with the implications of this legal judgement. The Government needs to provide realistic options and assistance for those co-operatives where tenancies may be caught up with legal problems as a result of the ruling as a matter of urgency.
In the long term, I renew my calls for the Government to look at ways that ‘co-operative housing tenure’ could be recognised in Law. The lack of affordable housing is still one of the most significant issues facing our society and I believe that enabling co-operative housing models to flourish would have a real impact on the lives of many of those who are struggling to find somewhere to live.
Instead of leaving it up to the courts, the House needs to modernise the Law and show its support for co-operative housing projects across the UK.
Jonathan Reynolds is the Labour & Co-operative Member of Parliament for Stalybridge & Hyde. He proposed the Co-operative Housing (Tenure) Bill late last year and it remains the object of our Home Shares Campaign