Renting Homes: The Final Report - Law Commission

Fundamental terms 93
3.40 The most important terms – the fundamental terms – incorporate fundamental
provisions in the Bill. 94 Other important terms – supplementary terms –
incorporate supplementary provisions set out in regulations made under powers
contained in the Bill.
3.41 A fundamental provision may, with agreement of both parties, not be incorporated
as a term, if the effect is to benefit the contract-holder. 95 The parties may also
agree that a fundamental provision may be incorporated as a term of the contract
with modifications, but again only if the modification operates in favour of the
contract-holder. 96 Other fundamental provisions can be omitted or incorporated
with modifications if this is a necessary consequence of the parties’ omission or
modification of a particular fundamental provision. 97
3.42 The fundamental provisions relating to prohibited conduct, obtaining an
agreement by making a false statement, survivorship and the death of the
contract-holder cannot be omitted or incorporated with modifications. 98
3.43 The details of the fundamental provisions differ in relation to each type of
contract. They fall into three main categories.
93
(1) Fundamental provisions which apply to all occupation contracts. 99 These
include, for example, provisions about the termination of contracts, and
conduct which is prohibited by the contract.
(2) Fundamental provisions which apply specifically to secure contracts. 100
These include, for example, a provision allowing for the transfer of a
secure contract to a potential successor. 101
(3) Fundamental provisions which apply specifically to standard contracts. 102
These include, for example, provisions about termination of contracts for
serious rent arrears.
In Renting Homes (2003) Law Com No 284 we referred to these as “compulsory-minimum”
and “special” terms.
94 See also cl 20.
95 Cl 11(2). Eg the parties may agree that the landlord will not use one of the available
grounds for possession, and thus omit that ground from the terms of the contract.
96 Cl 11(3).
97 Cl 12. For example, if the fundamental term incorporating the fundamental provision
allowing for mandatory possession on the grounds of serious rent arrears (cl 187) was
omitted from a standard contract, the fundamental term incorporating the provision
restricting the use of that possession ground (cl 188) would also have to be omitted.
98 Cl 11(4). The terms are considered further below in Part 9 (prohibited conduct) and at
paras 11.2 and 11.3 (obtaining a contract by deception), paras 7.4 to 7.7 (survivorship) and
paras 4.15 to 4.17 (death of contract-holder).
99 Cl 14.
100 Cl 15.
101 Cl 131.
102 Cl 16.
54