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What
is a tenancy? It
is worth pointing out that the Landlord can often be a Leaseholder.
For example they own a flat on a long lease but have to
pay a ground rent themselves to the owner of the land upon
which the flats were built. The person owning the land is
referred to as The Freeholder. So
you often get the situation whereby the Freeholder is paid
rent by the Leaseholder (Tenant) who in turn is paid rent
by the Tenant. Let's not get too complicated. All
tenancy agreements must comply with statutory law. This
is law that is passed in parliament and is therefore legally
binding and enforceable without any argument at all. The
granting of a tenancy is done upon the agreement of two
parties, The Landlord and The Tenant. This can unwisely
be done verbally by both parties agreeing the length of
time the agreement shall be in force, the rent to be paid
and a notice period. This is so unwise we are not going
into it any further. All sensible landlords will have an
tenancy agreement in place if for no other reason than peace
of mind should the landlord have to take the tenant to court.
Judges still tend to side a little more with the tenant
than the landlord if they can! Anyone can draw up a tenancy
agreement! But you need to know what to say in it to ensure
that you are complying with the law of the land and are
not being unfair to the tenant. There
are several types of residential tenancies currently in force:
1.
The Protected Tenancies Rent Act 1977 - tenancies entered into
before 15 January 1989 . 2.
Protected Shorthold Tenancies Housing Act 1980 3.
The Assured Tenancy - introduced by the Housing Act 1988. 4.
The Assured Shorthold Tenancy - introduced in 1988 but modified
by the 1996 Housing Act. Protected
Tenancies Rent Act 1977 Protected
Shorthold Tenancies Housing Act 1980 The
Assured Tenancy: The
following can not be Assured Tenancies: 1.
The tenancy was created before January 15th 1989
2. A property who's rental value is in excess of £25,000
per annum
3. A tenancy where the rent payable is less than £1,000
per annum in Greater London and £250.00 elsewhere. 4.
A let to a student granted by an educational establishment 5.
A holiday let. 6.
A let where there is a resident landlord. If a landlord owns more
than one flat in a block purposefully built as flats (not a converted
house) and the landlord lives in one of the flats, then the landlord
is not resident. NOTE:
An
increase in the rent can be proposed by the landlord once every
twelve months by serving a notice of their intention to do so
under section 13 of the Housing Act 1988. The tenant can refer
the increase to a fair rent board. A
landlord can not terminate an assured tenancy by refusing to renew
a fixed term that has come to an end by serving a Notice to Quit.
An Assured Tenancy can only be brought to an end by the tenant
leaving freely or in the courts. Fortunately
the strict regime of this type of tenancy was altered by the Housing
Act 1996. Since February 28th 1997 , the method of creating an
assured tenancy is by: 1.
Serving notice on the tenant at the commencement of the tenancy
stating that the tenancy will be assured. 2.
include a clause in the agreement stating that the tenancy will
be assured. 3.
serving notice on the tenant during the fixed period that the
tenancy will no longer be an assured shorthold tenancy but will
become an assured tenancy. Recovering
Possession Of Assured Tenancy: For
a periodic tenancy or a fixed term tenancy with a break clause,
the method prescribed in the Housing Act 1988 must be complied
with: 1.
The landlord serves a notice of intended possession proceedings
on the tenant, using the notice shown in the Act under section
8 2.
The landlord must have grounds for possession. There
are two types of grounds for possession: a/
Mandatory - possession must be granted b/
Discretionary - the court decides that there are reasonable grounds
- or not. Grounds
For Possession: Mandatory:
1.
A claim by the owner who has: (a)
lived in the property before it was let or (b)
wishes to recover possession because he needs it as a home for
himself or spouse. 2.A
claim by a mortgagee whose mortgage predates the grant of the
tenancy who needs possession in order to sell the property. A
notice must have been served before the tenancy commenced by a
mortgagor who is an owner/occupier on the tenant. 3.
An out of season let of a holiday home for a period of less than
8 months. The property must have been let on a holiday basis for
the previous 12 months. Notice must have been served by the landlord
not later than the beginning of the tenancy that the property
may be recovered on this ground. 4.
A tenancy of not more than 12 months and at sometime during the
preceding 12 months the property was let to a student by an educational
institution. A notice must have been served not later than the
commencement date of the agreement that possession could be sought
on this ground. 5.
A let of a dwelling that has been used for ministerial purposes
and the courts are satisfied that it will again be used for ministerial
purposes. 6.
The landlord wants to demolish or reconstruct the property and
needs possession so to do. 7.
The tenant has died and possession has passed to a person without
entitlement. ( This is only applicable during a periodic term).
8.
Two months (8 weeks) rent arrears exist both at the time of serving
notice and on the day of the court hearing. Discretionary:
9.
The tenant has been offered suitable alternative accommodation
10.
Some rent was due when the notice was served and at the date of
the proceedings. 11.
The tenant has been persistently late in paying the rent. 12.
Any other obligation in the agreement has been broken. 13.
The behaviour of the tenant or someone living with them has caused
deterioration to the property or common parts. 14.
The tenant or someone living with them is guilty of nuisance or
noise anywhere in the locality, or has been convicted of using
the property for immoral or illegal means. 15.
The condition of the furniture has deteriorated through ill-treatment
by the tenant. 16.
The tenancy was granted because the tenant was employed by the
landlord and such employment has ceased. 17.
The tenant falsely induced the landlord into the tenancy. Notice
Of Possession Proceedings: Apart
from Grounds 3,4,8,10,11,12,13,14,15 and 17 where 2 weeks notice
will suffice, 2 months notice must be given to the tenant that
you intend to seek possession through the Courts. If you are seeking
possession under Ground 8, (2 months + rent arrears etc) you must
keep an accurate record of all documentation, letters etc that
have been sent to the tenant and when. This is in case you have
to revert to possession under Grounds 10 and 11 (discretionary
Grounds). Always ensure that the correct notice form is used otherwise
the proceedings will be invalid. You must use a Section 8 of the
Housing Act 1988. Housing
Act 1996: This
Act virtually made the Assured Tenancy extinct. The Act relaxed
the minimum period of tenancy for the tenant and so now any tenancy
agreement can be An Assured Shorthold Agreement (as long as it
abides by the other laws). The Assured Tenancy is very unattractive
to the majority of Landlords and should they wish for An Assured
Tenancy to be in place, they must notify the tenant in writing
prior to the tenancy commencing that this is the case. Assured
Shorthold Tenancies: A
vastly better type of tenancy than the Assured Tenancy, but be
warned that this is still a type of Assured Tenancy. Note that
for an Assured Shorthold Tenancy these points are vital: 1.
The tenant must be an individual or group of individuals for whom
at least one the property is their principal address. 2.
The tenancy commenced after January 15th 1989 3.
The Landlord can not terminate the tenancy unless he has given
two months written notice in the form of Section 21 of the Housing
Act 1988. If
the tenancy becomes periodic i.e. the fixed term has run out,
then the tenancy continues until the tenant gives one months notice
or the landlord gives 2 months notice. Such notice should coincide
with the rent date. Possession
of the property is guaranteed to the tenant for a minimum period
of six months. Possession will not be given to the landlord unless
the tenant has been in situ for a minimum of 6 months. Be warned
then that if you allow a friend to stay in a property for a temporary
period of 2 months and that friend suddenly decides they want
to stay - they can for a minimum period of 6 months. The periodic
tenancy can continue for eternity - there is no time limit. The
rent can be raised by issuing a section 13 notice on the tenant
- a legal form that must be used in the proper manner and format
as prescribed by legal stationers. Plus also remember that the
rent can not exceed £25,000 per annum. Company
Lets: A
tenancy that is granted to a company is not protected under the
Housing Acts of 1988 or 1996. All agreements created will fall
under contract law. A different kettle of fish altogether. I strongly
advise that you employ a solicitor to look through the contract.
Companies that rent properties for employees on a regular basis
often have their own agreements and these must be looked through
in fine detail. The main points to remember are : Always
reference the company. Ensure
the company has a valid registered address in the UK Ensure
you have named occupiers - or that there is a clause saying that
the occupiers can not be changed without your written consent.
This prevents the company from using your property as a stop over
for employees and therefore increasing the wear and tear as well
as you not knowing how many people are in the property at anyone
time. The
company is the tenant and therefore you should only accept rent
from the company. If the company says that the occupier is to
pay the rent then make sure there is a clause in the agreement
that says the occupier is acting as an agent on behalf of the
tenant (the company). Accepting
rent: Always
ensure that you accept rent from the persons nominated on the
contract. Because an Assured Shorthold Agreement can be made verbally
as well as in writing, accepting the rent from an unknown source
could be seen as the making of a contract between two parties
and therefore the person paying the rent could state that they
have entered into an agreement to rent the property from you,
without you realising it. Horrendously complicated I know, but
true. Section
21 The
Housing Act of 1988 section 21, stated that a minimum of two months
notice must be served on a tenant. In 1996 the Housing Act was
amended slightly and under section 98 of the 1996 Housing Act
it is stated that the notice must be served in writing. If you
need to go through the accelerated possession procedure proof
of notice is required so you must give notice in writing. Service
of notice can occur at any time after the commencement of the
tenancy. Do not give notice before the tenancy has started! However,
you must allow the tenant to be in situ for a minimum of 6 months.
Ensure
the format of the notice is correct (as below). All
the tenants must be named on the notice especially in the case
of sharers. If you want to be really careful then serve each individual
with notice. Please
note that the serving of notice varies according to the type of
tenancy. If
notice is being served during the fixed term of the notice then
you can do it in any form as long as you give the following details.
1.
Name and Address of Tenants 2.
Name and Address of Landlord or Landlords if there is more than
one. 3.
Address of the property which is being sought for possession.
4.
Date the notice is served. 5.
Date possession is required. 6.
You must state that possession is being sought under the Housing
Act 1988 section 21 (1) (b) or section 21 (4)(a) - Remember that
if notice is being served during the fixed term of the tenancy
then section 21 (1)(b) applies. The
best way to serve notice is to deliver it by hand or first class
mail. If you can, get the tenants to sign and return a copy to
you. Periodic
Tenancies: These
are tenancies that have gone past the fixed term and are now into
"periods". A period being the time the rent is paid.
i.e. every month or every 2 months etc. Notice can be served on
the tenants again you must give at least 2 months notice, but
you must ensure that the notice period brings the tenancy to an
end at the end of a rental period. Therefore, if the rent is paid
on the 25th of each month, ensure the notice will bring the tenancy
to an end on the 25th of the month. For example I receive rent
from my tenants on the 25th of each month. Today is the 30th.
I have to give 2 months notice and bring the tenancy to an end
at the end of a rental period. As I have just missed the 25th
July I can give notice to the tenants for possession of the property
on the 25th October 2001 . If I had thought about it I could have
given notice to the tenants on the 20th of July and had the property
back on the 25th September 2001 . Note
if the rent is paid quarterly then you can only give notice to
run out at the end of the quarter. Always
keep a copy of the notice served and of any covering letter.
A
tenancy is the granting of the right to exclusive use of
a landlords property and land for a determined period of
time. The owner of the land, including buildings that may
be on it is called the Landlord. In return for the use of
the land, a rent is paid as agreed between the Landlord
and the person using the land known as the Tenant.
Otherwise
known as Regulated Tenancies, they are governed by the Rent Act
1977 and the Housing Act of 1988 has absolutely no effect on them
whatsoever. In order for a tenancy to be legitimately a Protected
Tenancy under the 1977 Act, the dwelling must be let as a separate
dwelling under section 1 of the Act and must not fall into any
of the express exclusions under Part 1 of the Act. A protected
tenancy is a statutory tenancy rolling on from month to month
giving the tenant the right to a fair rent, not a market rent!
At no time can this type of tenancy be changed to An Assured Shorthold
Tenancy, even if ownership changes or a new tenancy was granted
after January 15th 1989 (please note new tenancy, not new tenant)
.
This
Act was introduced to encourage residential lettings in the private
sector. This type of agreement can not be created nowadays, since
the Housing Act of 1988 cam into force. Whilst the tenant is still
protected by rent control, the tenant has no right to possession
at the end of the fixed term and the landlord can invoke mandatory
grounds for possession, as long as the landlord has abided by
his statutory requirements. A protected shorthold tenancy could
be granted for a period of 1 to 5 years. Note: a Protected Shorthold
Tenancy could only be granted if a service was served on the tenant
prior to the commencement of the tenancy and a protected shorthold
tenancy could not be converted to An Assured Shorthold tenancy
unless the fixed term came to an end after January 15th 1989 when
the Housing Act 1988 came into force.
This
type of tenancy gives the tenant the right to possession of the
property even after the fixed term has come to an end. The only
way a landlord can get rid of a tenant is by court order or the
tenant leaves voluntarily. Note that the tenancy must include
at least one tenant for whom the property is their principal home.
If at any time this is not the case then the tenancy ceases to
become assured, It is however, very difficult to prove this and
the courts are not always that favourable to landlords. Once the
fixed term of the tenancy comes to an end, unless the tenancy
is renewed it becomes a statutory periodic tenancy. This means
that the tenancy is governed by law to run from period to period.
Period being the term upon the rent is paid, usually monthly.
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