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On 14 March 2022, the Department for Levelling Up, Housing and Communities (DLUHC) announced the launch of its Homes for Ukraine scheme for those fleeing the war in Ukraine. The scheme is open to Ukrainian nationals and their immediate family members who were resident in Ukraine prior to 1 January 2022.
From 18 March 2022 UK residents were able to express an interest to act as a sponsor for Ukrainians (including families) to stay in their home.
The sponsors will be asked by DLUHC to provide homes or a spare room rent free for as long as they are able to, with a minimum stay of six months. In return, the sponsor will receive £350 per month from the Government.
It is anticipated that customers of registered providers, whether they are leaseholders, shared owners or tenants may wish to apply to be a sponsor and the question will arise whether becoming a sponsor could potentially be a breach of a term of the customer’s lease or tenancy agreement. Whether the lease or tenancy agreement is breached will depend on the specific terms of that agreement. However, there are some general points that we will address below, which will help registered providers answer queries from their customers.
Customers with a Right to Buy/Right to Acquire Lease
Q1 - Are they allowed to take in lodgers?
Answer
Lodging usually occurs when a customer shares their home with another person (the lodger) but the lodger does not have any exclusive right to any part of that home. They will be allocated their own bedroom.
There is nothing within the standard right to buy or right to acquire lease that would prevent the customer to taking in a lodger to occupy a spare room at their home.
Q2 - Are customers allowed to sub-let their property?
Answer
Subletting occurs when the customer relinquishes occupation of their home and allows somebody else or another family to live there, usually for payment.
A standard right to buy/right to acquire lease would usually allow the customer to sublet the property with the consent of the landlord, not to be unreasonably withheld.
It is usually the case that the customer is able to sublet the property without consent if the customer is proposing to sublet the property to a tenant using an assured shorthold tenancy agreement. However, we do not believe it is the Government’s intention that Ukrainian refugees become parties to assured shorthold tenancy agreements because their accommodation involves no payment from them to the customer. It is not anticipated that the payment from the Government to the customer is intended to be classed as rent.
In any event, in order to avoid this complication, the Registered Provider is usually able to provide consent to a customer in the absence of an assured shorthold tenancy.
Q3 - Any other issues?
Answer
Most right to buy leases allow a payment to the registered provider for giving consent to a sublet. The registered provider is at liberty to waive this fee if they choose.
Customers with a Shared Ownership Lease
Q1 - Are they allowed to take in lodgers?
Answer
A shared ownership lease based on Homes England’s model lease does not prevent - customers from taking in lodgers to share the accommodation.
Q2 - Are customers allowed to sub-let their property?
Answer
It is a fundamental clause of all shared ownership leases that forbids customers from subletting their home. The Homes for Ukraine scheme does not allow sponsors to charge rent to the Ukrainian national. Therefore, it could be argued that the customer is not subletting the property due to the absence of rent. However, it is felt that because the Ukraine national is still occupying the whole of the property, that is sufficient to meet the requirements for subletting which in the case of a shared owner is not allowed.
Q3 - Any other issues?
Answer
No further issues.
Assured/ Assured Shorthold Tenants
The terms of a tenancy will vary between landlords but it is anticipated that the position of the assured tenant will be the same as that referred to above for shared owners.
Customers who own the freehold of their home
When a shared owner buys additional shares to their home (known as stair casing) so as to eventually own 100% of the property, they may also be entitled to have the freehold transferred to them. That freehold transfer might also include terms regulating in some limited circumstances how the property is used.
In those cases, it is not anticipated that there will be any restrictions on the customer applying for the Homes for Ukraine scheme.
Head Leases
Where the freehold of a property is owned by another corporate entity with the registered provider owning a head lease, allowing them to grant leases and tenancies to their customers, then the registered provider should check the terms of the head lease to ensure that there are no terms in it that might conflict with the Homes for Ukraine scheme.
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Gary is a social housing specialist who engages with all stakeholders to ensure landlords and property managers achieve their goals for their housing stock.
