L2 Landlord and Tenant & LEASING AND LETTING Flashcards
Discuss the implications of serving a S21 Notice
Must be done in accordance with Housing Act 1988
Grounds for evicting tenant if LL needs to carry out refurbishment or renovation works BUT
Don’t always have to give reason for eviction
Need to have served correct info to tenant upon commencement of tenancy for notice to be valid
How does the introduction of the Leasehold Reform (Ground Rent) Act 2022 effect ground rents?
Act fulfils commitment to “set future ground rents to zero.”
Will apply only to new lease agreements (ie not retrospectively).
Why would you terminate an AST?
To carry out works on property
To live in the property yourself if you are a LL
If the tenant has breached the obligations of their agreement
What are the grounds for issuing a S21 notice? What Act applies here?
Housing Act 1988
Don’t need to provide a reason for wishing to take possession
When would you service a S21 notice vs a S8 notice?
S21 - dont have to give reason, can be used after fixed term ends OR during periodic
S8 - if tenant breaks terms of tenancy
Discuss the relevance of the Coronavirus Act 2020 in relation to the CS Example?
Depending on when we gave notice, we had to give at least 6 months’ notice (AUG 2020 - MAY 2021)
What did the Coronavirus Act 2020 stipulate?
Temporary measures to protect tenants from eviction
Set rules on amount of notice to be given
Is the CA 2020 still valid? What has happened since?
No, notice periods are now 2 months
What rights do tenants have in regards to ASTs?
The right to live in the accommodation undisturbed and quiet enjoyment (LTA 1985)
The right to live in a property in good repair (LTA 1985)
A tenant’s right to information about their tenancy (LTA 1985)
Protection from eviction (Protection from Eviction Act 1977)
What is the difference between a long leasehold and an AST?
any long lease commencing after HA1988 is potentially an AST if:
a) the ground rent is over £250 per year (or £1000 per year in London); AND
b) the property is the only or principal residence of the leaseholder.
There is nothing in HA1988 which sets a maximum term on an assured shorthold tenancy. So, if the conditions above are met, one could have a 999 year term AST.
What were your concerns with the ground rent provision in the lease?
Upper cap being that it would not EVER exceed £250-1000 during its lifetime or would become an AST
Ground rents are increasing over time
Also looking ahead, new ground rent bill was coming (after issuing the lease) to potentially abolish ground rents so the cap protected us and to ensure compliance
What is the issue if a leasehold becomes an AST?
LL HAS GREATER POWERS TO TAKE POSESSION OF PROPERTY AND BRING LEASE TO END
Rather than going through legal process of ‘forfeiture of lease’ which BUYS MORE TIME
Could result in no property interest for leaseholder and their lender
As soon as GR falls 3 months into arrears, a LL has a mandatory ground to apply to Court for an Order for Possession.
Issues with mortgage provider and lessee
There is no discretion on the part of the Court.
So LL could seek possession of a £500,000 asset if a £250.00 ground rent were in arrears for only 3 months.
Suddenly the tenant is deprived of a half a million pound asset, and a lender who has a mortgage over it, is stripped of their security
What is the statutory threshold of Ground Rents?
the ground rent is over £250 per year (or £1000 per year in LONDON) then becomes an AST
What is ground rent?
refers to regular payments made by a holder of a leasehold property to the freeholder or a superior leaseholder, as required under a lease.
a ground rent is created when a freehold piece of land is sold on a long lease or leases
What about leases > 7 years?
Must be registered with Land Registry
How long can an AST be?
An AST can last for any duration, although tenants have a legal right to stay in a property for a minimum period of six months, regardless of whether the AST was for a shorter term than this.
HA 1996 REMOVED SIX MONTH MINIMUM TERM FOR ASTS
Can you make changes to an AST?
The terms and conditions of an AST can be changed on the basis that both landlord and tenant agree to the changes.
Changes to an AST should be made in writing and can be done by either:
Providing a fully updated version of the previously signed AST, for both parties to then sign and date once more, although the contract in general will remain effective from the start date.
Writing an addendum to the existing tenancy agreement.
What is an assured tenancy?
a type of tenancy that some private tenants and most housing association tenants have
Prior to 1997, these were most common type of tenancy, but now LL prefer ASTs, as allows them to recover possession without requiring a reason
What is the difference between an assured tenancy and an AST?
AST: LL has automatic right to regain possession at any point after the fixed term of the tenancy agreement has expired as long as they provide reasonable notice
Assured tenancy: LL does not have this automatic right which grants the tenant greater security of tenure and they can stay until they choose to leave.
What is the Housing Act 1988?
governs the law between landlords and tenants
Act introduced the concepts of assured tenancy and assured shorthold tenancy.
What notices did the CA 2020 apply to?
S8 and S21 Notices
What were the periods of notice under the CA 2020?
June 2021 - September 2021: min. 4 months
August 2020 - May 2021: min. 6 months
March 2020 - August 2020: min. 3 months
What were exceptions to the CA 2020?
rent arrears MORE THAN 6 MONTHS
failing R2R legislation
tenant’s conduct (anti-social)
When did the CA 2020 end?
From 1 October 2021, all notice periods returned to the pre-pandemic position.
What is form 6a?
for a no fault possession notice on an AST
If tenants do not leave by the date specified on form, LL can apply to the court for a possession order
sought under section 21(1) or (4) of the Housing Act 1988
What is a long leasehold?
Leasehold means that you just have a lease from the freeholder (sometimes called the landlord) to use the home for a number of years.
> 21 years
The leases are usually long term – often 90 years or 120 years and as high as 999 years – but can be short, such as 40 years.
What are ‘prescribed forms’?
proposes an action that may affect the other party to the tenancy agreement.
There are NINE FORMS
named ‘prescribed’ because wording = carefully drafted to ensure that person completing form and person on whom it is served may understand what is being proposed and what they may do in response.
Why use a ‘prescribed form’?
Failure to serve the correct form may invalidate the action that is being proposed.
What are the TWO possession processes?
Can use standard possession process or the accelerated possession process.
What is form 3 and when should it be used?
notice seeking possession of a property let on an AST OR assured tenancy
sought on one of the grounds in Schedule 2 to the Housing Act 1988
What happened after February 1997?
As per Housing Act 1996, most private sector or housing association tenancies will automatically be ASTs unless the landlord chooses to grant an assured tenancy
REMOVED MINIMUM 6 MONTH TERM FOR ASTS, AS SET OUT IN HA 1988
What was the original commission rate? (RM)
10%
How did you agree a reduction in the commission rate? (RM)
10% included things we didn't need such as: Preparing an AST Collecting rent Inventory Safety certificates Negotiating renewal terms
How did you have regard to the Residential Real Estate Agency statement during the negotiation? (RM)
During agreement of the Terms of Business, we had a period of negotiation
I was aware that commission was only payable upon completion of the transaction
They conducted KYC checks on my directors and i assisted with providing them this information
New build, EPCs would be provided before marketing the properties
Why did you require a let only service? (RM)
My colleagues conducted management in-house
What does the Residential Real Estate Agency PS state about company lettings? (RM) KEY!!!
company tenant is liable for any default of payments or any costs for all the tenants
ASTs should not be used for company lets and companies often have their own tenancy agreements
The agreement must be a common law letting agreement, which allows company employees to occupy the premises as a LICENSEE only
Should ensure no business carried out a premises or could provide security of tenure under the Landlord and Tenant Act 1954. A reasonable amount of home
working by the employee is, however, permissible.
The security deposit does not require protection.
What is a common law letting agreement?
A fixed-term tenancy for a residential property, for use when an assured or AST is inappropriate; for example,
letting to a company
a tenancy where the annual rent >£100,000
where the landlord is a resident landlord.
Deposits taken in connection with a common law tenancy do not have to be protected in a tenancy deposit scheme.
When does the Ground Rent Act 2022 come into force?
The Leasehold Reform (Ground Rent) Act 2022 comes into force on 30 June 2022
Are there any circumstances in which you wouldn’t have been able to serve a s21?
< 4 months since the tenancy started, or the fixed term has not ended, unless there’s a clause in the contract which allows you to do this
property is categorised as a house in multiple occupation (HMO) and does not have a HMO licence from the council
tenancy started after April 2007 and you have not put the tenants’ deposit in a deposit protection scheme
tenancy started after October 2015 and you have not used form 6a or a letter with all the same information on it
you have not repaid any unlawful fees or deposits that you charged the tenant - read the guidance for landlords on the Tenant Fees Act 2019
How did you keep a record of having served the notice?
Form N215: Certificate of service
Use this form to tell the court which documents you served, who you served them on, and when, where and how you served them.
Can use this to apply for accelerated possession order
