L2 Landlord and Tenant & LEASING AND LETTING

Question 1

Discuss the implications of serving a S21 Notice

Answer 1

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

Question 2

How does the introduction of the Leasehold Reform (Ground Rent) Act 2022 effect ground rents?

Answer 2

Act fulfils commitment to “set future ground rents to zero.”

Will apply only to new lease agreements (ie not retrospectively).

Question 3

Why would you terminate an AST?

Answer 3

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

Question 4

What are the grounds for issuing a S21 notice? What Act applies here?

Answer 4

Housing Act 1988

Don’t need to provide a reason for wishing to take possession

Question 5

When would you service a S21 notice vs a S8 notice?

Answer 5

S21 - dont have to give reason, can be used after fixed term ends OR during periodic

S8 - if tenant breaks terms of tenancy

Question 6

Discuss the relevance of the Coronavirus Act 2020 in relation to the CS Example?

Answer 6

Depending on when we gave notice, we had to give at least 6 months’ notice (AUG 2020 - MAY 2021)

Question 7

What did the Coronavirus Act 2020 stipulate?

Answer 7

Temporary measures to protect tenants from eviction

Set rules on amount of notice to be given

Question 8

Is the CA 2020 still valid? What has happened since?

Answer 8

No, notice periods are now 2 months

Question 9

What rights do tenants have in regards to ASTs?

Answer 9

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)

Question 10

What is the difference between a long leasehold and an AST?

Answer 10

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.

Question 11

What were your concerns with the ground rent provision in the lease?

Answer 11

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

Question 12

What is the issue if a leasehold becomes an AST?

Answer 12

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

Question 13

What is the statutory threshold of Ground Rents?

Answer 13

the ground rent is over £250 per year (or £1000 per year in LONDON) then becomes an AST

Question 14

What is ground rent?

Answer 14

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

Question 15

What about leases > 7 years?

Answer 15

Must be registered with Land Registry

Question 16

How long can an AST be?

Answer 16

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

Question 17

Can you make changes to an AST?

Answer 17

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.

Question 18

What is an assured tenancy?

Answer 18

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

Question 19

What is the difference between an assured tenancy and an AST?

Answer 19

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.

Question 20

What is the Housing Act 1988?

Answer 20

governs the law between landlords and tenants

Act introduced the concepts of assured tenancy and assured shorthold tenancy.

Question 21

What notices did the CA 2020 apply to?

Answer 21

S8 and S21 Notices

Question 22

What were the periods of notice under the CA 2020?

Answer 22

June 2021 - September 2021: min. 4 months

August 2020 - May 2021: min. 6 months

March 2020 - August 2020: min. 3 months

Question 23

What were exceptions to the CA 2020?

Answer 23

rent arrears MORE THAN 6 MONTHS

failing R2R legislation

tenant’s conduct (anti-social)

Question 24

When did the CA 2020 end?

Answer 24

From 1 October 2021, all notice periods returned to the pre-pandemic position.

Question 25

What is form 6a?

Answer 25

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

Question 26

What is a long leasehold?

Answer 26

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.

Question 27

What are ‘prescribed forms’?

Answer 27

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.

Question 28

Why use a ‘prescribed form’?

Answer 28

Failure to serve the correct form may invalidate the action that is being proposed.

Question 29

What are the TWO possession processes?

Answer 29

Can use standard possession process or the accelerated possession process.

Question 30

What is form 3 and when should it be used?

Answer 30

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

Question 31

What happened after February 1997?

Answer 31

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

Question 32

What was the original commission rate? (RM)

Answer 32

10%

Question 33

How did you agree a reduction in the commission rate? (RM)

Answer 33

10% included things we didn't need such as:
Preparing an AST
Collecting rent
Inventory
Safety certificates
Negotiating renewal terms

Question 34

How did you have regard to the Residential Real Estate Agency statement during the negotiation? (RM)

Answer 34

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

Question 35

Why did you require a let only service? (RM)

Answer 35

My colleagues conducted management in-house

Question 36

What does the Residential Real Estate Agency PS state about company lettings? (RM) KEY!!!

Answer 36

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.

Question 37

What is a common law letting agreement?

Answer 37

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.

Question 38

When does the Ground Rent Act 2022 come into force?

Answer 38

The Leasehold Reform (Ground Rent) Act 2022 comes into force on 30 June 2022

Question 39

Are there any circumstances in which you wouldn’t have been able to serve a s21?

Answer 39

< 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

Question 40

How did you keep a record of having served the notice?

Answer 40

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