Tenancy agreements

The majority of lets will conform to the requirements of an Assured Shorthold Tenancy (AST). Some will not and will be Common Law Tenancies. A few old ones (before 15 Jan 1989) are Regulated Tenancies.

AST

An Assured Shorthold Tenancy (AST is automatically in place if:-

the property being rented is private
The tenant is an individual, a group of individuals or a family.

the tenancy started on or after 15 January 1989

the property is the tenants main accommodation

the landlord doesn’t live in the property

Whilst the AST doesn’t have to be in writing it is strongly recommended it is, to save problems if it goes wrong.

If an agreement is oral, and it can be proven the tenant has paid rent and the landlord has accepted it, an AST is in place, and all the rules about an AST apply.

Rules regarding an AST:-

any deposit taken has to be appropriately protected

the correct documents have to be served

rent increases are carried out correctly

any eviction notice served has to be appropriate

Common Law Tenancies

The following are Common Law – (excluded from H/Act 1988):-

Is not the tenants principal residence

High rent (over £100, 00 per annum)

Rent free/low rent tenancy (comes with job)

Company let

Student let by education body (halls of residence)

Resident landlord – lodgers in your home (licence agreement)

Agricultural tenancy

Implications for Landlords – Common Law Tenancies

The implications of common law tenancies are:

(1) a different tenancy agreement from the usual AST will be required, and

(2) any deposit taken is not subject to the requirements of the Deposit Protection Scheme under the Housing Act 2004.

(3) the rules governing re-possession under the Housing Acts do not apply.

Stamp Duty or Stamp Duty Land Tax (SDLT) as it’s now called, is not payable unless the lease Net Present Value exceeds the SDLT a certain threshold (see the SDLT rules). Below this threshold, the vast majority of private tenancies escape SDLT.

Security of Tenure – Common Law Tenancies

Common Law Tenancies do not afford tenants the same protection regarding security of tenure and statutory continuation as do Assured Tenancies (including Shorthold Assured Tenancies).

Therefore the AST section 21 and section 8 notices and possession procedures do not apply, and the letting operates on the literal wording of the Tenancy Agreement. Similarly, the Deposit Protection (DPS Scheme) rules do not apply.

However, the Protection from Eviction Act 1977 still applies, meaning that in the case of a common law residential tenant refusing to leave, a court order will be required.

Regulated Tenancies

A regulated tenancy is a long-term rental agreement with a private landlord.

Tenancies that started before 15th January 1989 could be regulated tenancy agreements if the rent is paid to a private landlord.

A regulated tenancy also applies to tenants that later signed a new renters contract after the 15th January 1989 with the same private landlord, even if it was for a different address.

Regulated tenancies won’t count for those tenants that have lived on the same property as their landlord since the date of their tenancy agreement.

Regulated tenants will benefit from greater protection against eviction and they also have the option to apply for a ‘fair rent’, which is set by a rent officer at the Valuation Office Agency.

The fair rent can’t be changed once it’s set but if it isn’t already registered then either the tenant or the landlord can apply to the rental service to get it registered.

Landlords are able to increase the amount of and set fair rents, however, the landlord can request a rent increase from the Valuation Office Agency every two years. There are some instances when a landlord can request the increase before this two-year period expires.

What are the Succession Rights after the Death of a Regulated Tenant?

The regulated tenancy can be inherited by a husband, wife, civil partner or cohabitee which is known as succession. This will only apply to those of the above who was living with the regulated tenant before their death and it will remain a regulated tenancy as long as no one else had previously inherited the tenancy.

A regulated tenancy can also be inherited by another family member of the original regulated tenant as long as they were living with the tenant for at least two years before their death and the tenancy and it will remain a regulated tenancy. However, only one person is able to succeed the regulated tenancy after the death of a regulated tenant and joint succession is forbidden. A husband, wife, civil partner or cohabitee will always have the priority over another family member.

It is important to know that a regulated tenancy is only able to be succeeded twice and under very specific circumstances.  Find out more regarding regulated tenancies

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1 Comment

  1. Michael Roberts

    How/ where in a new tenancy agreement can break clause be added? I’ve been ask to provide a 4month break clause on a 6 months tenancy agreement for someone that have to have emergency work is being carried out via an insurance company.

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