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RICS APC - Residential Pathway 2023 > Leasing and Letting > Flashcards

Leasing and Letting Flashcards

1
Q

What is the relevant case law for lease and licences?

A

Street v Mountford [1985]

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2
Q

What is the difference between a lease and a license?

A

License = permission to use property/land for specified use. Not exclusive.

Lease = contractual arrangement where a tenant agrees to pay rent to a landlord for exclusive occupation of a property for a fixed term. Conveys a legal interest in the land.

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3
Q

What makes an Assured tenancy different to an Assured Shorthold Tenancy?

A

AST = automatic right for landlord to regain possession after the initial term, with reasonable notice.

AT = greater security of tenure - tenant can stay until they choose to leave or the landlord acquires the property on one of the grounds stated in the Housing Act 1988.

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4
Q

Could you talk me through the main points of the Deregulation Act 2015?

A
  1. Landlord can serve S.21 at the start of a tenancy
  2. S.21 will become invalid after 6 months
  3. Prevention of retaliatory evictions
  4. Prescribed form of S.21 notice
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5
Q

Is a HMO a tenancy?

A

No, it is a licence and a type of investment

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6
Q

What is a HMO?

A

A HMO is a property rented by 3 or more people from different households with shared facilities like the bathroom and kitchen

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7
Q

What is an Assured Tenancy?

A

Granted under the Housing Act 1988.

Tenant can end on 1 month’s notice.

Can only be evicted for breaching tenancy (S.8).

Rent can only be increased if you agree.

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8
Q

What is an Assured Shorthold Tenancy?

A

Tenancy allowing a landlord to let a property while retaining the right to repossess the property at the end of the term.

Rent must be under £100k per annum with 6 months minimum term.

Came into force following the Housing Act 1988.

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9
Q

How can an Assured Tenancy be inherited?

A

By a spouse/partner/cohabitee if they were living with them before the tenant’s death for 2 years.

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10
Q

How is an Assured Tenancy valued?

A

Establish Market Value and discount depending on age of tenant, successors and property condition. Life Tables give an indication of discount.

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11
Q

What is a protected tenancy vs an unprotected tenancy?

A

Regulated rent act or fair rent tenancies.

Regulated by the Rent Act 1977. Protection from illegal eviction under the Protection from Eviction Act 1977.

Must have commenced before Jan 1989; landlord must not be resident and be a private individual or limited company.

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12
Q

When is a tenancy not considered an AST?

A
  • Tenancy started before 15 January 1989
  • Rent > £100k pa
  • Rent < £250 a year (£1k in London)
  • Tenancy is for a business or licensed premises
  • Holiday let
  • Landlord is a local council
  • < 6 months
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13
Q

What is a Right-to-Rent check?

A
  • ID check for legal status to live in the UK
  • Mandatory for landlord’s under the Immigration Act 2016
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14
Q

What is an an inventory check?

A

Record of property condition at the start of a tenancy.

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15
Q

Is there a limit on the amount of a holding deposit?

A

Tenant Fees Act 2019 - 1 week’s rent

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16
Q

What is a tenancy deposit?

A

A sum of money paid to a landlord at the start of a tenancy as security against non-payment of rent, property damage, or removal of furniture.

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17
Q

Which law relates to tenancy deposit schemes?

A

Housing Act 2004 - deposits have to be held under a Tenancy Deposit Scheme within 30 days of receiving it.

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18
Q

Tell me about recent changes to ground rents?

A

Leasehold Reform (Ground Rent) Act 2022

  1. No ground rents on new leases or informal lease extensions.
  2. Cap treatment of ground rents at 0.1% of freehold value.
  3. Same rights for leaseholders of flats & houses to extend lease as often as they wish at zero ground rent, for 990 year term.
  4. Long-leaseholders can buy out ground rent without extending lease.
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19
Q

What are some examples of other deposit schemes across England and Wales apart from TDS?

A

Deposit Protection Service (DPS)
My Deposits

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20
Q

How can a landlord gain possession at the end of the lease? (end an AST)

A

Section 21 notices
Section 8 notices
Mutual agreement

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21
Q

What are some examples of landlord responsibilities?

A
  1. keep properties safe and free from health hazards
  2. all gas and electrical equipment is safely installed and maintained
  3. provide an EPC
  4. protect deposit in a government-approved scheme
  5. check right to rent (England)
  6. provide a copy of the How to Rent checklist
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22
Q

What are three types of right to rent checks?

A
  1. Manual document-based check
  2. ID Verification Technology - identity service provider (Experian)
  3. Home Office online checking service
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23
Q

Does a landlord need a reason for giving you a section 21 notice?

A

NO - Your landlord doesn’t need a reason for giving you a section 21 notice

24
Q

What main change is proposed under the Renters’ Reform Bill?

A

The abolition of section 21 (the end of “no-fault” evictions)

25
Q

When you can get a section 8 notice?

A

You might get a section 8 notice at any time during your tenancy

26
Q

Does a landlord have to give you a reason for giving you a section 8 notice?

A

YES

mandatory ground e.g. The tenant is in rent arrears

discretionary grounds e.g. damage your landlord’s property

27
Q

What main change is proposed under the Renters’ Reform Bill to section 8?

A

Proposes to expand the section 8 grounds for possession, while improving the court process for landlords.

28
Q

When did the tenant fees act comes into effect?

A

1st June 2019

29
Q

What is the aim of the Tenant Fees Act 2019?

A

The aim is to reduce the costs that tenants can face at the outset and throughout a tenancy

30
Q

What is the cost capped at for the change of tenancy name?

A

£50

31
Q

What fees can a landlord or letting agent charge a tenant in relation to new contracts?

A
  • Rent
  • Refundable tenancy deposit
  • Refundable holding deposit
  • Early termination of the contract
  • Changes to the contract e.g name
  • Utilities – (electricity and gas)
  • Communication services, TV License + Council Tax
  • Default fees for late payment of rent and replacement of a lost key/security device
32
Q

Who enforces the Tenant Fees Act?

A

Local Authorities

33
Q

What are the penalties for breaking the Tenant Fees Act?

A
  • 1st instance = civil offence, breaking again can = criminal conviction
  • Penalties for landlords and lettings agents
  • £5,000 for an initial breach
  • £30,000 for any subsequent breach within 5 years
34
Q

Which tenancies and licenses are covered by the Tenant Fees Act?

A
  • all ASTs
  • student accommodation
  • licenses to occupy
35
Q

Which lettings does the Tenant Fees Act not apply to?

A
  • Other types of letting in the private rented sector, including fully assured tenancies
  • Tenancies and licenses of social housing
  • Holiday lets
  • ‘Excluded licenses’
36
Q

Can you give me a couple of examples of fees that landlords and agents are NOT able to charge fees for?

A
  1. Viewings
  2. Referencing
  3. Admin
  4. Guarantors (can be a condition of the tenancy but fees can’t be charged)
  5. Inventory checks (in and out)
  6. Right to Rent checks (the landlord or agent are liable, unless the tenant fails the check)
  7. Pet fees/deposits
  8. Renewal/exit fees
  9. Interest on permitted payments
37
Q

When was it granted that Assured Tenancies will automatically become ASTs?

A

From 28 February 1997, most private sector or housing association tenancies will automatically be ASTs unless the landlord chooses to grant an assured tenancy

38
Q

What is a fair rent?

A

The max rent a landlord can charge a regulated or protected tenant.

39
Q

When can you/ your landlord can apply for a new fair rent?

A

Every 2 years

40
Q

How can a regulated tenant be made to leave?

A

Possession order from the courts, even if the tenancy has expired.

41
Q

Who sets a fair rent?

A

The Rent Officer

42
Q

What is a regulated tenancy?

A

Created before 15 January 1989

43
Q

When does the Maximum Fair Rent apply?

A

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.

44
Q

How is the Maximum Fair Rent (capped rent) calculated?

A

Set by the VOA and based on market rent

45
Q

What does the Rent officer consider when calculating Fair Rent?

A

Location
Condition
Who is responsible for repairs
Any furniture provided by landlord
Any improvements made by landlord

46
Q

What does the Rent officer ignore when calculating Fair Rent?

A
  • Any disrepair for which the tenant is responsible
  • Any improvements 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
47
Q

What are some major lease clauses affecting value?

A
  • Term
  • Break clauses
  • Alienation
  • Repairing obligations
  • User clauses
  • Rent review pattern & basis of valuation
  • Security of tenure provisions
  • Restrictive lease clauses
  • Inside or outside the LTA Act 1954 - commercial (if no mention of being contracted out of S.24-28, then inside)
48
Q

Which regulations relate to money laundering?

A

Money Laundering Regulations 2017

  • originally EU directive
  • from 2020 - update existing AML regime to incorporate EU’s 5th Money Laundering Directive
  • agents must register with HMRC if letting properties >10k Euros per month (criminal offence)
49
Q

What is the Economic Crime (Transparency & Enforcement) Act 2022?

A
  • beneficial ownership register of overseas entities owning property in the UK
  • stronger investigation powers - unexplained wealth orders (UWOs)
  • easier to prosecute anyone involved in sanctions-busting
50
Q

Any RICS guidance on money laundering?

A

Professional Standard, Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019

51
Q

Which legislation relates to Right to Rent checks?

A

The Immigration Act 2016

  • agents must determine immigration status of all prospective tenants - ID checks
  • Home office helpline
  • unlimited fines for breaching
52
Q

How much tenancy deposit can be charged?

A

Tenant Fees Act 2019

Under £50k pa = 5 weeks’ rent
£50-100k pa = 6 weeks’ rent

53
Q

Legislation relating to electrical safety?

A

Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020

  • new tenancies from July 2020, existing from Apr 2021
  • test electrics every 5 years
  • fixed wiring not portable appliances
  • copy of report to tenants and LA if requested
  • complete remedial work within 28 days
54
Q

Legislation relating to furniture fire safety?

A

Furniture and Furnishing (Fire Safety) Regulations 2010

  • most recent amendment, originally came into force 1989
  • all soft furnishings must be labelled for fire safety
55
Q

Legislation relating to gas safety?

A

Gas Safety (Installation and Use) Regulations 1998

  • annual safety check and certificate
  • record kept for 2 years
  • Gas Safe registered engineer
  • certificate to tenant
56
Q

Legislation relating to smoke alarms?

A

Smoke and Carbon Monoxide Alarm (Amendment) Regulations 2022

  • effective October 2022, updating 2015 regulations
  • one detector/alarm on each floor
  • carbon monoxide alarm in room with fixed combustion appliance (not gas cookers)
  • replace if faulty
  • £5k fine by LAs
57
Q

Legislation relating to homes being fit for humans?

A

Homes (Fitness for Human Habitation) Act 2018

  • effective March 2019
  • ensures rented accommodation is fit for human habitation - safe, healthy, free from hazards
  • LAs enforce and can force repairs

RICS APC - Residential Pathway 2023 (18 decks)

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