Mutual Exchange policy

Introduction

This policy sets out the approach to be taken by Southampton City Council (SCC) in enabling tenants to exchange their tenancy with another tenant. This could be with either another SCC tenant, or a tenant of another registered provider.

The Housing Act¹ provides all eligible tenants with the right to exchange their home with another eligible tenant in a process known as ‘mutual exchange’. This exchange can involve more than two parties but can only take place with the written permission of all landlords, and subject to a number of provisions outlined further in this policy.

The benefits of increasing housing mobility to social housing tenants and providers alike, as well as the wider public sector, have long been recognised² and Southampton City Council is keen to support these aims.

The Consumer Standards², set by the Regulator of Social Housing, have also added further requirements around how tenants are treated in all our dealings with them, and the information that they can expect from us.

This policy outlines SCC’s approach to Mutual Exchanges and details the process for all parties.

1 – The Housing Act 1985, Part IV, s.92 (as amended by The Localism Act 2011 s.158)

2 – See https://www.gov.uk/government/collections/regulatory-standards-for-landlords

Scope

This policy applies to all eligible tenants, as defined under the 1985 Housing Act³ (as amended). This means all SCC Housing’s secure and flexible tenants, unless that tenant falls under one of the fourteen exemptions allowed, would be included. Introductory tenants do not have the right to mutually exchange.

3 – The Housing Act 1985, Part IV, s.92 (as amended by The Localism Act 2011 s.158)

Policy Aims and Objectives

The aim of this policy is to enable the delivery of SCC Housing’s Mutual Exchange scheme in line with all relevant legislation and guidance, and to allow for the fair and consistent application of the process.

This policy also aims to advise staff, residents and partners how the scheme will operate, the eligibility criteria and grounds for refusal. It will further seek to:

• Promote mutual exchange as an effective option to meet housing needs.
• Improve housing mobility for social housing tenants, and to those needing to move to the area for work or personal reasons.
• Promote more effective use of the Council’s existing housing stock by enabling tenants to move to accommodation more suitable for their needs.

This will further enhance efforts to:

• Address under-occupancy and/or overcrowding pressures. Assist in releasing suitably adapted homes for those that need them.
• Help to relieve pressure on the Council’s Housing Register and Housing Options services.

Legal Framework

This policy complies with the legal framework governing Mutual Exchange schemes as set out under the Housing Act 1985, and as amended by the Localism Act 2011. It has paid due regard to the regulations set out by the Regulator of Social Housing in relation to the Consumer Standards and all other statutory guidance, including our powers and obligations under the Equality Act 2010 and the Human Rights Act 1998. This policy also complies, and is consistent with, the provisions in SCC Housing’s Allocations policy, secure and flexible tenancy agreements, and has had regard to all relevant internal policies and strategies.

All SCC tenants with lifetime (secure) or flexible tenancies have the right to exchange their homes with another qualifying tenant. Both tenants need the written consent of the landlord, but this will not be withheld except on one or more of the grounds specified (see Appendix 1).

Further protection is afforded to those who held lifetime tenancies prior to April 2012 who exchange with tenants on fixed term of flexible tenancies. Landlords must provide a written decision to the tenant within 42 days of receiving a completed application⁴ for mutual exchange, and tenants have the right to enforce decisions via the County Court should landlords fail to do so.

Landlords can also not rely on any of the grounds for refusal if they do not provide a written decision within the time limit.

As part of the Regulator of Social Housing Tenancy Standard, all registered providers are required to provide a service for Mutual Exchange to all eligible tenants free of charge⁵.

Right to Exchange

All SCC Housing tenants who have a secure or flexible tenancy are eligible for Mutual Exchange.

Tenants can exchange with tenants of any private registered provider of social housing anywhere in the country, including:

• Arms Length Management Organisations (ALMOs)
• Tenants on Introductory tenancies will not be considered for a Mutual Exchange until such time as they have successfully completed their probationary period.

4 – Including supporting evidence

5 – See Tenancy Standard - GOV.UK (www.gov.uk)

Types of Exchange

In order to exchange properties, tenants first need the written consent of their landlords. If agreed, the transfer of tenancies can only be carried out through one of two methods:

• An assignment applies when both tenants hold tenancies with a similar security of tenure. They will be asked to sign a ‘Deed of Assignment’ which will allow the incoming tenant to take on the responsibilities of the outgoing tenant. In effect, each tenant takes on the other’s tenancy.
• ‘Surrender and re-grant’ is where tenants surrender their current tenancy and are then granted a new tenancy at the new property with similar levels of security as their current tenancy. This is applicable in those cases where one of the tenants had a lifetime tenancy that predates 1 April 2012 and is exchanging with tenants who have a flexible or fixed term tenancy. In these cases, tenants effectively take their tenancy with them when they exchange.

HomeSwapper

Southampton City Council is subscribed to a national exchange scheme called ‘HomeSwapper’ ⁶. This makes the scheme free to all SCC Housing tenants.

Tenants will be required to register on the website in order to advertise their property and to find potential exchanges locally and nationally.

6 – See www.homeswapper.co.uk

Alternative ways to exchange

Tenants may also use a number of other means to find a Mutual Exchange partner. These may include social media, newspapers and local shop windows. There are also several other exchange websites that may charge a fee.

It is illegal for tenants to offer incentive payments to each other in order to secure a transfer, or to encourage someone to transfer. Any attempt to do so will lead to the automatic refusal of an exchange and may lead to eviction proceedings if a property is secured in this way.

Mutual Exchange process

The Mutual Exchange process is tenant led. This means that it is tenants themselves that are responsible for finding a prospective exchange partner.

In most cases tenants will only be allowed to move to a property which meets their needs, for example, does not have more or less bedrooms than the household requires⁷. Following this, a property inspector will visit to inspect the property and let the tenant know if there are any works to be undertaken before the exchange can proceed. They will also provide any further advice needed regarding the exchange process.

Once an SCC tenant has found another tenant to exchange with, and they are satisfied as to both the condition of the property and any issues that they may become responsible for, both parties must complete the online mutual exchange application form.

Both tenants seeking to exchange will be provided with a copy of the inspection report, including any fixtures and fittings that have been gifted by the previous tenant and any works that are the tenant’s responsibility.

Repairs that are the responsibility of the tenant will need to be carried out prior to the exchange taking place, or the incoming tenant will need to sign a waiver agreeing to take the property ‘as seen’.

The exchanging tenant will be issued with a final written decision within 42 days of receiving the completed application.

The Council cannot refuse an application on any of the grounds specified if we do not provide this written confirmation within 42 days.

The Council retains the right to use its discretion⁸ to allow mutual exchanges to go ahead even if one of the 14 conditions for refusal has been breached.

Where the proposed exchange is between a SCC Housing tenant and the tenant of another qualifying organisation, all landlords involved will provide and request references on the outgoing and ingoing tenants respectively.

Once an exchange has been approved, all tenants will be asked to attend an appointment at the relevant Housing Office and sign a ‘Deed of Assignment’ before an exchange can proceed.

The exchange cannot be completed without sufficient identification provided at the appointment.

Only once the deed has been signed and all other relevant paperwork is in place can the exchange complete. If a tenant moves without this, then they will be putting their tenancy in jeopardy. and could lose their home as a result. Any further duty by the Council to rehouse them is likely to be limited.

7 – For a person to be included on an application they must have a long-term commitment to the household and will live in that household once re-housed. All members of the application should have lived in the household for a minimum of 12 months at the point of application

8 – 1985 Housing Act, s.92

Gas and Electrical Safety

SCC has a statutory duty⁹ to ensure that the properties electrics and any Council owned gas appliances are safe to use before the incoming tenant takes up occupancy, and that any tenant owned appliances that were removed do not cause unsafe conditions.

Arrangements will be made for the appropriate gas and electrical safety checks to be carried out, and tenants will be expected to allow reasonable access for this to take place, as set out in their tenancy agreement¹⁰.

Arrangements will also be made for an Energy Assessor to complete and issue an Energy Performance Certificate (EPC), if there is not a current in date certificate for the property.

Mutual Exchanges will not be permitted to go ahead until these checks and any remedial works needed have been satisfactorily carried out.

It is the responsibility of the incoming tenant to ensure the safe and legal installation of any household appliance¹¹. They must ensure that they instruct, and pay for, a Gas Safe Engineer to connect, test and certify any new or used gas cooker installation or other appliance, or make arrangements for a qualified electrician to connect an electrical cooking appliance. Furthermore, it is the incoming tenant’s responsibility to report any electrical or gas safety concerns they may have caused by the outgoing tenant and to notify Housing immediately, for appropriate attention.

9 – British Standard BS 7671 "Requirements for Electrical Installations. IET Wiring Regulations"

10 – Southampton City Council Tenancy agreement

11 – ibid. s.7.7

Information, Guidance and Support

The Regulator of Social Housing has implemented several standards that must be met across all Council services¹². These include action to deliver a fair and equitable outcome for tenants from their dealings with the Council, publicising services and standards, and providing a clear and accessible complaints service.

Mutual Exchanges are, primarily, governed by the Tenancy Standard¹³, which demands that the service is:

• Available without payment of a fee. SCC achieves this with its provision of an exchange service through Homeswapper.
• Any mutual exchange service(s) must also be publicised, and details can be found on our website¹⁴.
• Support must be offered to relevant tenants to access services who might otherwise not be able to access them
• Information regarding any implications for tenure, rent and service charges must be offered to any tenant wishing to mutually exchange (see Appendix B).
• This policy provides detailed information regarding the various procedures used when assessing applications for a Mutual Exchange. Information regarding the scheme, including this policy, will be made available on the Council’s website¹⁵
• Tenants will be given the opportunity to discuss any questions regarding the process as part of the inspections process, but tenants may also contact their Housing Management Officer outside of this if they require further information or support.
• SCC will provide any reasonable additional support required to tenants that may not be able to access the Mutual Exchange service without difficulty. This may range from providing some additional explanation about the process to registering and searching for matches for a tenant.
• Tenants can nominate an advocate to help support them with their application Nominate someone to speak up for you
• SCC will also provide reasonable support to tenants who do not have access to the internet.

12 – See Regulatory standards for landlords - GOV.UK (www.gov.uk)
13 – See Tenancy Standard - GOV.UK (www.gov.uk)
14 – See Mutual exchange
15 – See www.southampton.gov.uk

Decisions

We are required by law to provide a written decision within 42 days of receiving a completed application for Mutual Exchange.

Should we fail to provide a written decision within this time frame, tenants have the right to enforce a decision by applying to the County Court. In this situation, SCC Housing will no longer be able to rely on any of the grounds for refusal, as set out in law.

It is important to recognise however, that failure to meet the statutory deadlines must not be treated as having been given consent to exchange.

We will not unreasonably withhold consent to exchange properties and will only do so based on the grounds set out in Schedule 3 Housing Act 1985 and schedule 14 of the Localism Act 2011 (see Appendix A below).

Tenants will be informed of the decision in writing, and this may fall into one of three categories; approved, approved with conditions, or refused.

An application for exchange will be approved when all tenants are not in breach of any tenancy conditions that may allow a refusal, and/or there are no conditions that need to be met prior to exchange.

Approval subject to conditions means that approval will not be granted unless certain conditions are met before the exchange takes place. This may be clearing a rent account or remedying any unauthorised home improvements.

An application will only be refused on the grounds set out below in Appendix A.

Discretion

There may be grounds on which SCC is able to refuse an application for exchange but may choose to exercise its’ discretion in certain circumstances.

This may apply where a tenant is in rent arrears and/or are impacted by changes to Housing Benefit/Universal Credit and the exchange may help the tenant to reduce their outgoings (such as when they are downsizing). Discretion may also be used if there are extenuating circumstances, and it is considered that the exchange would benefit the health or welfare of the tenant or a member of their household. In addition, in such circumstances it may be appropriate to accept requests for an exchange from an Introductory tenant.

The District Housing Manager may use their discretion to grant an exchange based on a report from the Housing Management Officer and supporting evidence. There is no further right of appeal, although tenants may follow the Council’s complaints procedure (see section 19 below) if they remain unsatisfied with the decision.

Refusals

If a Mutual Exchange application is refused, the tenant(s) will be informed of the decision and the grounds for refusal in writing. Tenants will need to go through the formal complaints procedure if they find the reasons for the refusal to be unsatisfactory, detailed below.

Where an external landlord has refused the application, it is the responsibility of their tenant to appeal the decision directly with them.

Monitoring and Review

This policy is intended to be a working document and will be reviewed and updated as and when any new legislation and / or guidance is issued.

General Data Protection Regulations (GDPR)

All personal information relating to tenants will be dealt with confidentially and in accordance with the 2018 Data Protection Act, the EU General Data Protection Regulations and the Council’s Privacy policy¹⁶. Tenants also sign a privacy statement when taking on a tenancy.

However, for an exchange to take place, we are required to share certain information about the applicant’s tenancy history with the exchanging landlord. All information held or shared will be in accordance with the above.

16 – See Housing Privacy Notice

Complaints

If members of the public would like to file any other type of formal complaint, this can be achieved through the Council’s complaints portal on the Council website. This can be found at:

Housing complaints

Once submitted, the complaint will be sent to the service area, where they will launch an investigation and decide upon the most appropriate course of action

Tenancy types eligible for mutual exchange*

Secure, assured, fixed term or contractual agreements.

Assured

Offered by housing associations, an assured tenancy in social housing gives tenants the right to live in a property for as long as they follow the terms of the tenancy agreement, such as paying rent on time. It offers more security, meaning they can usually only be evicted for specific reasons, like breaking the rules or non-payment of rent.

Fixed Term

A fixed-term tenancy in social housing is an agreement where a tenant can live in a property for a set period. After this period, the tenancy is reviewed. During the fixed term, the tenant has rights similar to other tenancies but with less long-term security than an assured tenancy.

Secure

Offered by local councils, a secure tenancy in social housing gives tenants long-term stability and protection. As long as the tenant follows the terms of the agreement, like paying rent and maintaining the property, they have the right to live there indefinitely. The landlord, usually a local council, can only evict the tenant under specific legal reasons, such as serious rent arrears or antisocial behaviour. This type of tenancy offers strong security compared to others.

Contractual

A contractual tenancy in a housing co-op is an agreement where the tenant’s rights and responsibilities are set by a contract, not housing laws. The co-op and tenant agree on things like rent and rules, and these are written in the contract. Since the co-op is run by its members (who are often the tenants), they have more say in the agreement. Tenant protection comes from the contract, not from usual housing laws.

It is similar to an assured tenancy, but there are some differences eg:

• Right to buy: Co-op contractual tenancies do not include a right to buy, voluntary right to buy, or right to acquire.
• Security of tenure: Tenants of a co-operative do not have security of tenure.

*www.houseexchange.org.uk

Grounds for Refusals

Potential changes under a mutual exchange

Items that tenants should consider before applying for a Mutual Exchange (This list is not exhaustive and is meant as a guide only. Any specific advice should be sought from your Housing Management Officer and / or you should take independent advice)

Changes to your tenancy agreement

• Tenants with a secure tenancy that started on or after 01 April 2012 who want to exchange with a tenant who has a flexible tenancy could lose their lifetime tenancy.
• Tenants who had their security of tenure protected by 2011 Localism Act s.158 will be issued with a new tenancy agreement and a start date after 01 April 2012. This means that if they exchange again, they could lose their secure tenancy.
• If you are a secure tenant, check whether or not you retain your right to buy of gain the right to acquire if moving to a housing association property. Check the number of years left on a tenancy if you are taking on a fixed term of flexible tenancy.
• If you are under occupying and on a flexible tenancy, you may be asked to move to a smaller property during the tenancy review process.
• Succession rights for family members may change.
• Properties in new developments may not allow parking permits, or tenancy terms regarding the keeping of pets may vary.

One-off financial costs

• Connecting gas and/or electrical appliances and providing safety certificates to verify that this has been done by a Registered Gas Safe Engineer or electrician.
• Replacement of fixtures and fittings left by the outgoing tenant, or costs to bring any unauthorised alterations back to a lettable standard.
• Removals, mail redirection and disconnection/reconnection fees for services such as television or broadband.
• Redecoration, and replacement / copy keys. School uniforms, if you have children

On-going costs

• Rent and / or service charges, including the impact of the spare room subsidy if under occupying. Utilities and Council Tax
• Increased travel costs, for work or school

Property condition

• Responsibility for any outstanding repairs or damage that will become the responsibility of the incoming tenant
• Responsibility for the maintenance of any alterations or improvements made by the outgoing tenant.

Equality and Safety Impact Assessment

The Public Sector Equality Duty (Section 149 of the Equality Act) requires public bodies to have due regard to the need to eliminate discrimination, advance equality of opportunity, and foster good relations between different people carrying out their activities.

The Equality Duty supports good decision making – it encourages public bodies to be more efficient and effective by understanding how different people will be affected by their activities, so that their policies and services are appropriate and accessible to all and meet different people’s needs. The Council’s Equality and Safety Impact Assessment (ESIA) includes an assessment of the community safety impact assessment to comply with Section 17 of the Crime and Disorder Act and will enable the Council to better understand the potential impact of proposals and consider mitigating action.

Name or Brief Description of Proposal

Mutual Exchange Policy.

This policy sets out the approach to be taken by Southampton City Council (SCC) in enabling tenants to exchange their tenancy with another tenant. This could be with either another SCC tenant, or a tenant of another registered provider.

The policy updates previous Council practice with regards to Mutual Exchanges and reflects the Consumer Standards, set by the Regulator of Social Housing (RoSH). It aims to advise housing staff, residents and partners how the scheme will operate, the eligibility criteria and grounds for refusal.

Brief Service Profile (including number of customers)

Housing Management (as part of Housing Services) currently manage the tenancies of around 15500 households within the city and the leases of 2200 leaseholder homes. Housing Management also manage the neighbourhoods and estates for these homes.

95% (14429) of tenancies are secure, 4% are introductory and 1% are managed under a license agreement. We only have 5 flexible tenancies.

Most tenants (88%) are over 35 including 15% who are over 75 years old.

Summary of Impact and Issues

The aim of this policy is to enable the delivery of SCC’s Housing’s Mutual Exchange scheme in line with all relevant legislation and guidance, and to allow for the fair and consistent application of the process. It is expected to have the following positive impacts:

• Promote mutual exchange as an effective option to meet housing needs.
• Improve housing mobility for social housing tenants within the city, and to those needing to move to the area for work or personal reasons.
• Allow more effective use of the Council’s existing housing stock by enabling tenants to move to accommodation more suitable for their needs.

Potential Positive Impacts

• Address under-occupancy and/or overcrowding pressures.
• Assist in releasing suitably adapted homes for those that need them.
• Help to relieve pressure on the housing waiting List

Responsible Service Manager: Matt Luik
Date: 30.09.2024
Approved by Senior Manager: Matt Luik
Date: 10.12.2024

Potential Impact