L1 Leasing & Letting Flashcards
What are the three forms of residential tenancy?
- Assured shorthold tenancy (AST)
- Assured tenancy
- Regulated tenancy (Rent Act)
- Contractual Tenancy
What is an Assured Tenancy?
- Offers long term tenancy rights to TT
- TT has right to renewal at the end of term unless LL serves notice on
specific grounds - Most assured tenancies between 1989 – 1997
- Housing associations often use AT
- Usually lasts for at least 5 years
What is a Regulated Tenancy?
- Long term agreement between TT and private LL
- Offer TT’s the right to remain in the property for life – LL need court
order to evict - Date back to before 1989
- LL’s responsible for repairs/exterior and structure of the home
- Regulated tenancies can be inherited by spouse following TT death if
living in home for at least 2 years before death then it becomes an AT
What is an Assured Shorthold Tenancy (AST)?
- Limited security
- Most common type of tenancy if you rent from letting agent or private landlord in UK
- Introduced by the Housing Act 1988 – however tenancies were always AT and not AST unless specifically created.
- Under the Housing Act 1996 this was revised, and all tenancies are default AST, therefore typically anything after 1997 is an AST
- 6 months to 3 years
What did the Housing Act 1996 do?
Made AST the default tenancy (used to be AT), effective Feb 1997
What did the Housing Act 1988 do?
Introduced AT and AST, effective Jan 1989
What is the difference between an Assured Tenancy and Assured Shorthold Tenancy (AST)?
- Principle difference is the limited security of tenancy of an AST.
- Landlord can regain possession of an AST without giving a specific
reason if they follow correct procedure
What cannot be an AST?
- Live with your landlord
- Rent under £250 (£1,000 in London) or over £100,000 pa
- Holiday let / term under 6 months
- Landlord is local council
What are the requirements of an AST?
- Rent must be less than £100,000 pa and let to individuals
- Can be fixed term or periodic (rolling weekly and monthly)
- Legally can stay a minimum term of 6 months
How can a Landlord regain possession under a AST?
- Under Housing Act 1988 – two ways:
- S. 21 (notice of possession)
o Gives LL automatic right of possession without having to give any
grounds once fixed term has expired
o Can’t be before end of fixed term or in the first 4 months
o From 29th Aug 2020 now at least 6 month notice due to corona
o Must follow correct procedure
o Tenant can legally stay until bailiffs come - S 8 (notice to quit)
o When a TT has breached their contract (rent, damage property,
nuisance to neighbours)
o If rent arrears – TT must be in at least 2 months of arrears (if TT
reduces to less than 2 months before court hearing S 8 isn’t valid)
o If legitimate ground for regaining possession can be immediate, 2
weeks or 2 months
Coronavirus changes for residential tenancies?
- Coronavirus Act 2020 introduced temporary protection for TTs from
being evicted - 6 months’ notice period from 29th August (only shorter if LL can show
TT is in 6 months of arrears, anti-social behaviour or domestic abuse - UK TT’s who miss rent payments due to the impact of coronavirus
were protected for at least three months - From September 2020 courts are dealing with evictions again
What are company lets?
Properties let to a company rather than individual should not be let under a company but have their own form of agreement
Company responsible for all the tenant obligations
What is the process of a letting a property after you receive an offer?
- Put offer and all info to LL
- Identify and AML check the tenant/guarantor/company
- Right to rent checks
- Submit for referencing Via enhanced Homelet
- Draft and sign AST
- Register deposit with the TDP
- Provide tenant with all info
What tenant reference checks do you undertake?
- Smart Search check
o AML
o Identifies PEP - Home Let Enhanced check -> double check report info
o Employment history, CCJ (county court judgement), credit checks, background search (addresses, names), previous LL reference - Student – confirmation from university
- Company tenant – letter from firm
How do you do a Right to Rent check
- Must check all tenants over the age of 18 (even if they’re POA)
- If time-limited visa – must be done 28 days before start of tenancy
- Check in person – Passport, visa, proof of address (dated with 3
months) - If BRP has not yet come -> check with UK Visas and Immigration
- Info can be certified by third party professional
- Make colour copy and retain for tenancy + 12 months
- Since 30 March – Covid-19 – Right to Rent checks can be done via video call – but they have to attend the office after self-isolation period
- Check with the home office if don’t have the correct documentation
What do you do if your tenant has a visa? What is a BRP?
- Follow the same process as normal but check BRP/visa
- If time limited visa, need to be checked 28 days before the start of the
tenancy - If BRP has not yet, come check with UK Visas and Immigration
- BRP = Biometric Residence Permit (BRP)
What happens if you don’t do a RtR check?
Immigration Act 2016 - 5 years in jail or unlimited fine
What are the rules around tenancy deposits?
- Covered by the Housing Act 2004
- Register with a TDP within 30 days of receipt
- Holding deposits don’t need to be protected – custodial (where LL retains deposit but pays a premium to insurer in case of default) also use of zero deposit schemes
- Return to tenant after 10 days of agreeing amount
What information must you provide TT with for TDP?
- Must provide specific info on TDP at term start, including:
o Amount of deposit
o Details of chosen TDP scheme
o Alternative Dispute Resolution details
o Contact of LL/prop manager for repairs
o Why you can lose deposit - Can’t serve a section 21 notice otherwise
What do you need to provide at the start of a tenancy? What happens if you don’t?
FIVE
1) Right to Rent documents
2) TDP information
3) Gas Safety certificate
4) EPC
5) Tenancy Agreement
6) Provide a copy of electrical safety certificate (EICR) – Electrical Installation Condition Report – introduced July 2020
Can’t serve s21 without above
What is on a tenancy agreement?
- Agree rent
- Rental due date/how it is paid
- LL & TT obligations
What is on a 21 notice?
- Details of LL & TT addresses
- Date of expiry notice
- Signed by LL or agent
Can you charge a tenant as an agent?
No – tenant fee ban 2019
What was included in the Tenants Fee Act 2019?
- Bans letting agents charging fees and capping tenancy deposits in
England – LL responsible for fees - Aim to reduce outset costs for TT’s – part of rebalancing private
rented sector to enable fairer, good quality and more affordable PRS - June 2019
- Change of name on tenancy is capped at £50
- 5 weeks deposit = >£50,000
- 6 weeks deposit = £50,000 - £100,000
What if the AST is for multiple years?
If 3-year term it must be executed as a deed
What happens at the end of the AST?
- If LL doesn’t indicate they want it to end it becomes a periodic tenancy
unless
o Landlord serves a section 21 notice
o Landlord and tenant agree a surrender
How do you know if you have an AST?
- Says in contract
- Signed after 1997 – Housing Act 1996
- Notice given by landlord stating you have an AST
How do you know if you have an AT?
- Let between 1989 and 1997
- Stated in your agreement – pay rent to private landlord
How can you regain possession under an AT?
- TT serves notice to quit after fixed term
- LL and TT agree to surrender
- LL serves section 8 giving specific grounds for lawful eviction
What are the ground for a section 8 notice? How much notice do you need to give?
- Mandatory grounds e.g. 6 months rent in arrears. 2
week’s notice. - Discretionary grounds e.g. breach of contract terms, continually late
rent, nuisance to neighbours. 2 months’ notice for these
What do you do if a tenant has a time limited visa?
- Check at the start of the tenancy – 28 days
- Then check again after 12 months or before it expires to ensure they
have renewed it
What must you do to deposits?
- Housing Act 2004 – protect them
- Register within 30 days, return within 10 days of agreement
- Protect under government backed TDS
- Capped under Tenant Fees Act 2019
What documents do you provide at the start of a tenancy?
- Deposit paperwork
- How to rent guide
- EPC
- Gas safety certificate
- AST
- 1st July 2020 - Electrical safety certificate – EICR
How much deposit can you take?
- Holding deposit 1 week – not protected
- Rent under £50k p a = 5 weeks rent
- Rent over £50K - £100K = 6 weeks rent
What is a HMO?
- At least 3 people from more than 1 household sharing a bathroom
and kitchen - 5+ is a large HMO
- If you rent a HMO the LL must comply with certain standards and
obligations - All HMO’s need a licence from local council – lasts 5 years
- Housing Act 2004
What are the conditions of a HMO license?
- Must send council updated gas certificate every year
- Install and maintain smoke alarms – might also be required to fit fire
doors to main routes - Minimum room sizes
o 6.6 sqm for single person
o 10.22 sqm for two adults - Provide safety certificates for all electrical appliances when requested
(PAT) - House/flat must be suitable for the number of occupants (depending
on size/facilities) - Manager/LL must be considered ‘fit and proper’
What are the penalties for non-compliance with HMO License?
Unlimited fine for renting out an unlicensed HMO
What if HMO is more than 7 people?
- Need planning permission
- C4 – refers to small HMO (3-6 people)
o Need permitted development right to move between C3 (single
dwelling) and C4
o May need planning permission if LPA has article 4 in place stopping
PDR - Sui Generis – 7+ people and you will need planning permission
regardless of location
What did the Deregulation Act 2015 enact?
- Can’t serve a s21 if there is no valid EPC
- Can’t serve s21 within first four months of tenancy
- EPC should be provided to every prospective tenant at point of
enquiry - Made revenge evictions illegal
What are some of the recent changes proposed to lettings law?
Rented Homes Bill (2019-2021) a bill to amend Housing Act 1988
o Abolish ASTs
o Abolish ‘no fault’ evictions – s21
o Extend grounds upon which LL’s can recover possession – likely to
include the sale of a property as a reason
When do you need to do AML checks?
Before taking money and issuing tenancy
What did the immigration act 2016 introduce?
- Harsher punishments - criminal offence for not doing R2R
- Unlimited fine and 5 years in jail
What is the letting process post offer?
- put offer and all info to LL
- Reference check the tenant/guarantor/company
- Right to rent checks within 28 days of tenancy starting
- Draft and sign AST
- Register deposit with TDP within 30 days of receipt
- Provide tenant with all info
What are the MEES 2015 regulations?
- Since April 2018 LL’s cannot let or re-let properties with an EPC below
E - Since April 2020 this includes new residential leases
- In April 2023 will include new commercial leases
- Estate agents cannot market or let a property without a valid EPC
What are the penalties for breaching MEES regulations?
- Less than 3 months = £2,000
- More than 3 months = £4,000
What are landlord requirements under MEES regulations?
- LL’s are required to spend £3,500 improving energy efficiency
- If AST granted since April 2019 if property has F or G EPC if tenant
demands improvements unless exempt - Exemptions = work fails to meet financial viability test or adversely
affect property’s value - New consultation to updates MEES potentially raising the minimum
requirement to B or C by 2030
Why do you use Homelet?
- Provides an extra level of security Hallmark of quality
- Credit check
What other reasons may you not be able to rent?
- If you don’t have visa/BRP
- Sanction list e.g. from Iran (need to provide further EDD)
What are the different types of tenancy deposits?
TDP schemes
Custodial - insurance back scheme where landlord retains deposit but pays premium to insurers in case of default
Zero Deposit Scheme - insurance policy whereby TT pays one weeks rent non-refundable and Zero Deposit will provide 6 week deposit
