Your Guide to Residential Tenancies
Recently I received a call from a friend asking for advice on a tenancy agreement and how he could evict his non-paying tenant. As a non-professional landlord, the information provided to me was “bare bones” and on that basis, I gave the standard advice about serving Section 8 and Section 21 Notices.
However, when we spoke at length and I was provided with the full details of the letting, I realised that these notices were not relevant as the tenancy was actually a common law tenancy. It got me thinking how confusing Tenancies of all kind can be. With this in mind I thought that my next blog should be about the kinds of tenancies there are, starting with residential as I have already written about the benefits and consequences of subletting your property.
Assured Shorthold Tenancy
The most common tenancy is an Assured Shorthold Tenancy or AST. The most important feature of this being that the landlord has the right to get his property back at the end of the tenancy.
A tenancy is considered an AST if it is granted by a private landlord or housing association, commenced after 15th January 1989, it is the tenant’s main home and the landlord does not share the property.
A tenancy is not considered an AST if the rental income is in excess of £100,000 a year (increased in 2010), if the rent is less than £1000 a year in London or £250 elsewhere, is a commercial tenancy or holiday let or the Local Council is the landlord.
An AST gives the tenant the right to remain at the property for at least 6 months and the landlord is obliged to serve 2 months’ notice if they wish to repossess the flat. A notice must be in the form prescribed by regulation and can’t be served during the first 4 months of the tenancy. Any deposit taken must be placed in an approved deposit scheme and the prescribed information given.
Following on from an Assured Shorthold Tenancy is a Periodic Tenancy. This is where a tenant remains at the property beyond the end of a fixed term.
Common Law Tenancy
The next tenancy is a common law tenancy as referred to above. This is for a tenancy where the annual rent exceeds £100,000. The main differences with these kinds of tenancies are:
that any deposit taken does not have to be protected in a deposit scheme;
the landlord does not have to serve notice at the end of the tenancy and during the tenancy can serve notice on the basis of any grounds specified in the tenancy agreement rather than being bound by the prescribed grounds set out in Schedule 2 of the Housing Act; and
the tenants do still have protection, they cannot be evicted without a Court Order, are protected by the Unfair Terms in the Consumer Contracts Regulations 1999 where they have entered into a standard form tenancy agreement.
Other Tenancies available
The other tenancies available are excluded tenancies or licences, assured tenancies and regulated tenancies.
Excluded tenancies or licences are usually an agreement made when the landlord lives in the same property as the tenant, i.e. a Lodger. This type of agreement gives a greater security to the landlord and less protection to the tenant from eviction.
An Assured Tenancy relates to tenancies granted between 15th January 1989 and 27 February 1997, if the notice then required was not served with the main difference being a greater protection from eviction.
Finally, a regulated tenancy is a tenancy which started before 15th January 1989 with tenants have the benefit of increased protection from eviction and being able to apply for a ‘fair rent.’
Whatever the tenancy is MIH are able to assist you with managing your property and tenancies and ensuring that you are compliant with the latest legislation.