In light of the COVID-19 outbreak, most registered providers (RPs) and local authorities (LAs) are now looking to focus their reduced services on urgent matters and are looking to see what can be stopped or delayed. Here we explore mutual exchanges, and what obligations there are on LAs and RPs.  

Mutual exchanges can be time consuming with landlords looking to take references, inspect the property and approve or reject the exchange within 42 days. That may be very difficult to do with reduced staffing levels or an inability to get into residents’ properties. Secure tenants are given an express right to do a mutual exchange with another secure tenant or some Assured tenants as set out in section 92 of the Housing Act 1985.

What about assured tenants of RPs?

There is no express equivalent for assured tenants of registered providers—however, the Regulator of Social Housing (“the Regulator”) expects providers to offer mutual exchanges.

What does this mean for RPs?

The Regulator has already said it will take a lighter touch, proportionate approach in the light of COVID-19—including suspending In Depth Assessments (IDAs)—but reminded RPs that they are expected to communicate in a timely manner with the Regulator on material issues that relate to non-compliance or potential non-compliance with the regulatory standards.

As such, if a registered provider is struggling to deal with a mutual exchange the Regulator may be understanding with delays etc. However, the landlord will want to have good records of the problems, what it has done to try and resolve them, and how it has communicated them with the resident.

What about secure tenants?

There is more of a problem for secure tenants or where a registered provider has made express promises in the tenancy. For example, not only might they have said they will offer mutual exchanges, but that they will deal with them in the way set out under section 92  of the Housing Act 1985. The Schedule to the Act contains various grounds for objecting to a mutual exchange. These include it being too small, too large or a specially adapted disabled property but it is difficult to investigate those issues without taking up a reference and inspecting the property.

What are the issues?

The 42 day time period is a problem—s.92 (3) states that if the landlord is silent or tries to object on other grounds consent “shall be treated as given”.

Where a secure tenant’s landlord has not validly objected within 42 days then the resident could seek an injunction to compel the landlord to allow the exchange to proceed or perhaps claim damages if they incurred losses. An injunction is a discretionary remedy and whilst the courts may be sympathetic with landlords where the statutory regime of s.92 applies then the landlord will struggle to oppose such a claim.

Where the resident is an assured tenant then the landlord will need to check its tenancy conditions and policy to see exactly what it has promised to do.

How Capsticks can help

If you have any queries around what is discussed in this article, and the impact on your organisation, please speak to Daniel Skinner to find out more about how Capsticks can help.