All Things Legal

ALL THINGS LEGAL!

The Housing Act 1988 (amended by the Housing Act 1996) made the letting of a property to private individuals more accessible and attractive by making it easier to let properties at a market rent and recover possession. The new legislation gave rise to the Assured and Assured Shorthold Tenancy.

DIFFERENT TYPES OF TENANCY

There are a number of factors taken into consideration when establishing which type of Tenancy to use. Although there are many other forms of Tenancies, it is likely that one of the following will be used for your property:

a) Assured b) Assured Shorthold (AST) c) Company Tenancy d) Contractual Tenancy (used for High Rent Tenancies)

A) ASSURED TENANCY
Certain criteria must be met for a tenancy to qualify for assured status. Should an Assured tenancy be created the Tenant has security of tenure, but at a market rent negotiated between the parties. Should a Landlord require back possession of their property let on an Assured Tenancy, a Court Order must be obtained. The Assured Tenancy has advantages to some Landlords but other forms of tenancy offer far greater flexibility and are a preferable option for the majority of prospective Landlords.

B) ASSURED SHORTHOLD TENANCY (AST)
This type of Tenancy has proved attractive to Landlords by offering market rents but not granting the Tenant security of tenure beyond the contractual term. Approximately 90% of tenancies in this part of London will be created in this format. A few criteria (amongst others) used for establishing an AST are as follows:

a) The Tenant must be an individual b) The property must be the Tenants main residence/home c) The rent cannot exceed £25,000 per annum d) The Landlord must not enjoy Resident Landlord Status (in occupation of the same property).

Provided all the relevant criteria are met and an Assured Shorthold Tenancy is created, via a Section 21 Notice the Landlord is guaranteed possession, if the term of the Shorthold is expired and not less than two months notice has been given by the Landlord stating he requires possession. If court action is needed there a number of different Grounds which can be served on the Tenant to bring about possession of the property. NOTE: It is a criminal offence under the Protection from Evictions Act 1977, for a Landlord to threaten or forcibly evict a Tenant from their property.

C) COMPANY TENANCY

A Company Tenancy, unlike an Assured Tenancy or AST, is governed by contract Law and is not regulated by the Housing Acts of 1988 or 1996. It is used when Private/Public Limited Company (not a partnership or sole trader) want to enter into a tenancy. The Company has no security of tenure and will often agree to make rental payments on a quarterly basis.

D) CONTRACTUAL TENANCY

This form of Tenancy also falls outside the provisions of the Housing Acts of 1988 and 1996 is not regulated by statute. It is most commonly used where the rent exceeds £25,000 per annum and both parties have the freedom to contract as they choose, but must then rely solely on the provisions of that Agreement.

THE LANDLORD & TENANT ACT 1985

Under Section 11 of the Landlord & Tenants Act 1985, a Landlord cannot avoid their repairing obligations. In particular they are required to maintain a) The structure of the exterior of the property including drains, gutters and external pipes b) The installation for supply of water, gas electric and sanitation equipment and c) The installation for space heating and water heating. The Landlord cannot waive their repair obligations in favour of the Tenant, as this is a statutory requirement.

THE HOUSING ACT 2004 (HMO REGULATIONS)

From April 2006 all property owners must comply with the latest regulations relating to Houses in Multiple Occupation (HMO’s). The new laws re-define HMO’s and dictate which HMO’s are subject to mandatory licensing. Penalties for breach of these laws are severe, with fines of up to £20,000 for failure to get a licence or for breaching permitted numbers. For further information visit http://www.odpm.gov.uk/ or contact your local Outlook for more advise.

THE ABOVE IS INTENDED ONLY AS A GUIDE AND IS NOT EXHAUSTIVE. IF YOU STILL FEEL THAT YOU ARE IN NEED OF FURTHER CLARIFICATION, WE SUGGEST THAT YOU CONTACT A SOLICITOR.