Leasing and Letting Flashcards
What is the relevant case law for lease and licences?
Street v Mountford [1985]
Please could you explain the difference between a lease and a licence?
- A licence does not grant the tenant ‘exclusive possession’ of the property. A licence is merely a right to occupy.
- A licence does not create a legal interest in the land and cannot be assigned to another party.
(Lease = a contractual arrangement where a tenant agrees to pay rent to a landlord for exclusive occupation of a property for a fixed term.)
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What makes an Assured tenancy different to an Assured Shorthold Tenancy?
- An AST gives the landlord an automatic right to regain possession after the initial fixed term period, as long as they provide reasonable notice.
- Under an AT, a tenant has greater security of tenure, under an AT a tenant is allowed to remain at the property until they choose to leave or the landlord acquires a court order to evict them
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Could you talk me through the main points of the Deregulation Act 2015?
- A landlord can’t now serve a section 21 notice if its less than 4 months since the tenancy started
- The landlord must use the new prescribed form 6A to serve a section 21 notice.
- Landlords obliged to provide information about the rights and responsibilities of both the landlord and tenant under an AST (s.39). This is known as the How to Rent Checklist.
- S.21 notices will not be valid where a landlord has failed to comply with certain legal requirements such as Energy Performance Certificates
- Prevention of retaliatory evictions (s.33 and s.34).
Is a HMO a tenancy?
No, it is a licence and a type of investment - CHECK
What is a HMO?
A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen
In your example at Cinnamon Wharf, you said that you undertook all referencing checks, what did this involve?
- Previous landlord references (Up to 3 years)
- Current employer reference (if on probation then previous employer reference too)
- Proof of funds (if paying upfront)
- Credit Check and CCJ check
- Right-to-Rent check
- IDs + Proof of Address
What is an Assured Tenancy?
- Have a right to security of tenure (potential for lifelong possession of the property)
- Granted by a private landlord, private registered provider or registered social landlord under section 1 of the Housing Act 1988
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What is an Assured Shorthold Tenancy?
Allows a landlord to let out a property to a tenant while retaining the right to repossess the property at the end of the term of the tenancy (fixed-term)
When did Assured Shorthold Tenancies come into effect?
Came into effect on 15 January 1989
When is a tenancy is not considered an AST?
- Tenancy started before 15 January 1989
- Rent is more than £100,000 a year
- Rent is less than £250 a year (£1000 in London)
- Tenancy is for a business or license premises
- Property is a holiday let
- Landlord is a local council
What is an an inventory check?
(submission)
Record of the property’s condition and contents at the start of the tenancy.
Is there a limit on the amount of a holding deposit?
(submission)
The law caps holdings deposits at the equivalent of one week’s rent for the whole property (Tenant Fees Act 2019).
What is a tenancy deposit?
A sum of money that you pay to your landlord or letting agent before you move in as security against non-payment of rent, damage to property, or removal of furniture.
What is the difference between a holding deposit and a tenancy deposit?
(submission)
Holding deposit = takes the property off the market secures the property for that tenant (legally be no more than one week’s rent)
Tenancy deposit = a sum of money that you pay to your landlord or letting agent before you move in
In England tenancy deposits are capped at five weeks’ rent where the annual rent is less than £50,000, and six weeks’ rent where the annual rent is £50,000 or more.
What are some examples of other deposit schemes across England and Wales apart from TDS?
- Deposit Protection Service (DPS) (insured)
- My Deposits TDSL (custodial)
- Tenant Deposit Scheme (custodial & insured)
How many days does a landlord/letting agent have to arrange a tenant deposit scheme/protect the tenant’s deposit?
They must arrange a tenancy deposit scheme within 30 days of receipt.
How can a landlord gain possession at the end of the lease? (end an AST)
- Section 21 notices
- Section 8 notices
- Mutual agreement
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What are some examples of landlord responsibilities?
- Keep their rented properties safe and free from health hazards
- Make sure all gas equipment and electrical equipment is safely installed and maintained
- Provide an EPC for the property
- Protect your tenant’s deposit in a government-approved scheme
- Check your tenant has the right to rent your property if it’s in England
- Give your tenant a copy of the How to Rent checklist when they start renting from you
What are three types of right to rent checks?
- A manual document-based check
- A check using Identity Verification Technology via the services of an identity service provider
- Check via the Home Office online checking service
Does a landlord need a reason for giving you a section 21 notice?
NO
Section 21 notices are sometimes called ‘no fault’ notices because your landlord does not need a reason for eviction.
What main change is proposed under the Renters’ Reform Bill?
The abolition of section 21 (the end of “no-fault” evictions)
When you can get a section 8 notice?
You might get a section 8 notice at any time during your tenancy
Does a landlord have to give you a reason for giving you a section 8 notice?
YES - there are lots of reasons your landlord can use section 8: (split into mandatory grounds and discretionary grounds)
mandatory ground e.g. The tenant is in rent arrears
discretionary grounds e.g. A tenant caused damaged to a landlord’s property
What main change is proposed under the Renters’ Reform Bill to section 8 ?
The Bill also proposes to expand the section 8 grounds for possession, while improving the court process for landlords.
When did the tenant fees act comes into effect?
1st June 2019
What is the aim of the Tenant Fees Act 2019?
The aim is to reduce the costs that tenants can face at the outset and throughout a tenancy
What is the cost capped at for the change of tenancy name?
£50
What fees can a landlord or letting agents charge a tenant in relation to new contracts?
- Rent
- Refundable tenancy deposit
- Refundable holding deposit
- Early termination of the contract
- Changes to the tenancy contract e.g name
- Utilities – (electricity and gas)
- Communication services, TV Licence + Council Tax
- Default fees for late payment of rent and replacement of a lost key/security device
Who polices the Tenant Fees Act?
National Trading Standards Estate & Letting Agency Team
Work closely with local authorities which have local enforcement responsibilities
What are the penalties for breaking the Tenant Fees Act?
- Considered a civil offence for the first instance and breaking them again can lead to a criminal conviction
- The penalties for breaching the Tenant Fees Act apply to landlords and lettings agents.
- £5,000 for an initial breach
- £30,000 for any subsequent breach within five years
Which tenancies and licences are covered by the Tenant Fees Act?
- All assured shorthold tenancies
- Tenancies of student accommodation
- Licences to occupy housing in the private rented sector in England
Which lettings does the Tenant Fees Act not apply to?
- Other types of letting in the private rented sector, including fully assured tenancies
- Tenancies and licenses of social housing
- Holiday lets
- ‘Excluded licences’ in the private rented sector
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Can you give me a couple of examples of fees that landlords and agents are NOT able to charge fees for?
- Property viewing
- Referencing
- Administration charges
- Guarantors (this can be a condition of the tenancy but you cannot charge fees for meeting this condition)
- Inventory checks (both check in and check out)
- Right to Rent checks (the landlord or agent are liable for this cost, unless the tenant fails the check)
- Pet fees/deposits
- Renewal/exit fees
- Interest on permitted payments
When was it granted that Assured Tenancies will automatically become ASTs?
From 28 February 1997, most private sector or housing association tenancies will automatically be assured shorthold tenancies unless the landlord chooses to grant an assured tenancy.
What is a fair rent?
The maximum rent a landlord can charge a regulated or protected tenant.
When can you/ your landlord can apply for a new fair rent?
They can only do this every 2 years
How can a regulated tenant be made to leave?
The landlord must get a possession order from the courts before the tenant can be made to leave.
This applies even if the tenancy agreement between the landlord and tenant has come to an end.
Who sets a fair rent?
The Rent Officer
What is a regulated tenancy?
A tenancy created before 15 January 1989
When does the Maximum Fair Rent apply?
The Maximum Fair Rent applies to all fair rent registrations made to rent officers since 1 February 1999 as long as a fair rent has previously been registered on the property.
What does the Rent officer consider?
- The location
- The condition of the property
- Who is responsible for repairs
- Any furniture provided by your landlord
- Any improvements made by your landlord
CHECK WITH VICKY
What does the Rent officer ignore?
- Any disrepair for which the tenant is responsible
- Any improvements that the tenant has made which he or she did not need to under the terms of his or her tenancy
- They won’t take your circumstances into account, for example if you have a low income
CHECK WITH VICKY
How is the uncapped rent calculated?
- start with the market rent of the flat calculated using the comparable method
- deduct for T obligations under the tenancy which are more onerous then ASTs (higher for houses (FRI) than flats (IR)
- deduct for T improvements
- deduct for scarcity – where the imbalance of supply and demand for rented dwellings has the effect of inflating the rent
When is a mandatory licence required for a HMOs?
From 1 October 2018, the mandatory licensing scheme for HMOs was extended.
A mandatory licence is required if either of the following apply:
- The property is occupied by 5 or more people forming more than 1 household who share some amenities, such as a kitchen or bathroom
What are the additional H&S requirements for HMOs to include?
- Specific room measurements
- Provide protected fire escape routes
- 30 min fire resistant doors to main routes
What is the penalty for not carrying out a right-to-rent check?
If they do not, they can be liable for a fine of up to £3,000.
What are the three forms of residential tenancies?
- Assured
- Assured Shorthold
- Regulated
What is a right-to-rent check?
Checking to see if the tenant or tenants have a legal right to live and work in the UK and can legally rent your property
It involves checking their identity documents
If you’re not a British or Irish citizen, you can usually get a share code to prove your right to rent. Your landlord can use the share code to check if you can rent and how long for.
Share Code = a personal identifier that proves a worker’s immigration status
What are the key provisions of the Housing Act 1988?
- The Act introduced the concepts of assured tenancies and assured shorthold tenancies
- Introduced S.8 and S.21 notices, that landlords can use to regain possession of their property
- It also allowed landlords to set their own rents
- Succession rights for Assured tenancies
What would you do if a tenant refuses to leave on the date specified in the notice?
You will need to apply to the courts for a ‘possession order’.
When can a Landlord use a Section 21 notice to evict tenants?
- After the fixed term ends of an assured shorthold tenancy
- During a tenancy with no fixed end date - known as a ‘periodic’ tenancy
You must give a minimum of 2 months’ notice
When you cannot use a Section 21 notice?
You cannot use a Section 21 notice if any of the following apply:
- It’s less than 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
- The tenancy started after April 2007 and you have not put the tenants’ deposit in a deposit protection scheme
- The tenancy started after October 2015 and you have not used form 6a or a letter with all the same information on it
- The property is categorised as a house in multiple occupation (HMO) and does not have a HMO licence from the council
You also cannot use a Section 21 notice if you have not given the tenants copies of:
- The property’s Energy Performance Certificate
- The government’s ‘How to rent’ guide
- A current gas safety certificate for the property, if gas is installed
What is included in your terms of business? (to a landlord)
- Outlines commission & fees
- Additional charges e.g. organising an EPC
- Letting only and renewal service
- Rent collection, letting & renewal service
- Property management, letting & renewal service
- Additional services
- Legal requirements
- General provisions
- Summary of charges
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What were the key points of the Housing Act 1996?
Dealt with:
- Provision about the social rented sector
- Houses in multiple occupation
- Rights and responsibilities of both tenant and landlord
- The administration of housing benefit
- The conduct of tenants
- The allocation of housing accommodation by local housing authorities homelessness
What is the code of conduct for letting agents?
Code of Practice for Residential Letting Agents 2019
What are the two government approved redress schemes that must letting agents join? (they must use one)
- The Property Ombudsman (TPO)
- The Property Redress Scheme
How much can the council fine a letting agency if they don’t join a redress scheme?
The council can fine letting agents up to £5000 if they do not join a redress scheme.
You stated at Cinnamon Wharf, that when you took on the property, you registered the deposit and provided the tenants with a copy of certification, what other documentation do you have to provide to the tenant with at commencement of tenancy? (submission)
- How to rent checklist
- A copy of the tenancy agreement
- A gas safety certificate (if the property has a gas supply)
- The copy of the Energy Performance Certificate (EPC)
- Electrical Installation Condition Report (EICR)
- Property inventory record
What are the key principles of the Estate Agents Act 1979?
- Clarity as to TERMS of the agency (s.18)
- Honesty + accuracy
- Agreement + liability for COSTS
- Openness regarding PERSONAL INTERESTS (s.21)
- Absence of DISCRIMINATION
- Legal obligation to tell the client about OFFERS
- Keep CLIENT MONEY secure + separate
In China Wharf, you agreed to an AST of 24-months with a 12 month break clause. How might there be difference in the value depending on that break clause? i.e. if there was no break clause how might that have changed the value that you could have received
- Landlord might have meant received a lower value with no break clause (they have security of that income for 2 years)
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China Wharf - Why is an inventory check important?
- Gives both landlord and tenant record of the condition of the property at the start of the tenancy.
- It is essential for helping to prevent disputes with tenants, and ensures that the landlord’s property is in the same condition (less fair, wear and tear) at the end of a tenancy
- It will highlight any areas that need addressing and record exactly who is responsible for their repair.
- Having the inventory document to hand will show tenants how the property should be returned to the landlord and provide a guideline as to how the home should be maintained.
- Inventories easily distinguish between damage and fair wear and tear.
- Property inventories help protect both the landlord’s investment and the tenant’s deposit
When should you complete AML check on tenants?
Before receiving rent
Before tenancy agreement is executed
Before move in
What is included in a tenancy agreement?
- The names of all people involved
- The rental price and how it’s paid
- Information on how and when the rent will be reviewed
- The deposit amount and how it will be protected
- Details of when the deposit can be fully or partly withheld (for example to repair damage you’ve caused)
- The property address
- The start and end date of the tenancy
- Any tenant or landlord obligations
- An outline of bills you’re responsible for
