Rent Act Tenancies and Protected Shorthold Tenancies

One of the key pieces of information agents should be aware of when they take over management of a tenancy, or for landlords to be aware of when they purchase a property with a tenant in situ, is the date the tenant moved in the property. There could be a few signed renewal agreements since the original contract, but it is crucial to find out the date that the tenant first occupied the property.

Legal Providers, Woodstock Legal Services, encountered a case where the landlord assumed that he had purchased a property with a standard assured shorthold tenant as that is the agreement supplied. Unfortunately, it later transpired that this wasn’t the first contract. In fact, the tenant had occupied the property for many years; their tenancy was not an AST and as a result, it is a lot more difficult for the landlord to recover possession.

The landlord appointed an agent to take over management of the property and supplied a copy of a renewal agreement – which was called an AST. However, unless the agent asks the question of when the tenant first occupied and requests a copy of the original contract, it is unlikely to come to light that the tenant could have more rights until a problem arises.

Any tenancies entered into after 28 February 1997 are automatically ASTs unless they fall within certain exceptions. This date is key, and landlords/agents should be aware that if they do come into contact with any tenancies prior to 1997 to exercise caution and understand the implications of this type of tenancy.

Regulated or protected tenants have stronger rights than most other private tenants and can be difficult to evict. Landlords and agents should also be aware that if a regulated tenant dies his or her spouse will normally take over the regulated tenancy if living with the tenant at the time of death. This is called succession rights.

Rent Act Tenancy (also known as regulated tenancies)

A Rent Act Tenancy could be granted by private landlords before 15 January 1989. This type of tenancy grants the tenant a right to fair rent and a high level of security of tenure, which means that tenants can only be evicted if the landlord can prove a ground for possession.

No new Rent Act Tenancies could be created after January 1989. However, if the original tenancy agreement was a Rent Act Tenancy and it was created before January 1989, the renewal tenancy agreement will remain as such.

To evict a Rent Act tenant a landlord must obtain a possession order through the courts. One of the grounds for possession must be proved, called ‘cases’ in the Act. If the landlord can prove a mandatory case exists – the court must award possession of the property.

If the landlord can prove a discretionary case exists – the court will have discretion whether to award a possession of the property, and the landlord must show the court that it is reasonable to make the order having regards to the circumstances that exist at the date of the hearing.

Section 21 Notices were not introduced until later on, and therefore they can’t be used for this type of tenancy.

A Protected Shorthold Tenancy

A Protected Shorthold Tenancy could be granted by private landlords between 28 November 1980 and 15 January 1989. In order to be a Protected Shorthold Tenancy – the following conditions must have been met:

• The tenancy was granted for a fixed term of one year (but not more than 5 years).

• There must be no clause in the tenancy agreement allowing the end of the tenancy before the fixed term expired (unless forfeiture due to non-payment or breach of contract).

• The tenant must not have been a Rent Act tenant previously.

• The landlord must have given a notice in the prescribed form before the tenancy was granted that it will be a protected shorthold tenancy.

Landlord and tenant law can be a complex minefield and the law is very technical. It is incredibly important that agents gather all information at the early stages when taking on a new management contract with a landlord for a property and the alarm bells ring when faced with tenants that have been in the property for a considerable amount of time.

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