Category: Tenants

Mrs Landlord has had the 1st floor of her Victorian house converted into a self-contained flat as rental accommodation but what sort of tenancy will any occupier have?

Status of landlord
Section 10 of Schedule 1 of the Housing Act 1988 provides that the landlord is considered to be a resident landlord if the tenancy was granted by an individual who, at the time when the tenancy was granted, occupied as his only or principal home another dwelling-house which also forms part of the flat or part of the building.

Therefore, the landlord does not need to share any accommodation with the occupier to qualify for resident landlord status. It is enough that both the landlord and tenant live in the same building.

Due to the Housing Act 1988, a tenancy where there is a ‘resident landlord’ may not be an assured or assured shorthold tenancy. Such a tenancy will need to be an ordinary common law tenancy or a licence.

Same building?
A potentially confusing point within the legislation is the determination of whether the dwelling-house let to the tenant forms part of the same building as the dwelling-house occupied by the landlord.
Where a granny annex has been built as a separate building beside the landlord’s house, there will not be resident landlord status and the annex can be let under an assured shorthold tenancy as it does not form part of the same building as the landlord’s dwelling-house.

However, where the landlord builds an extension onto his house or converts one floor to a self-contained flat for use as rental accommodation the courts will consider the proximity of the tenant’s and landlord’s accommodation to determine whether to grant resident landlord status.

Whether or not they are deemed to form part of the same building is a question of fact and degree.
However, in coming to an overall decision on this matter it is likely that the court will pay significant regard to the intention of the legislation, which was to allow the landlord to more easily remove a tenant who lives in close proximity to him.

Eviction issues
For agreements made on or after 15th January 1989, except new lettings to the landlord’s existing regulated or assured tenant, the resident landlord always has the right to get the property back from his tenant. For periodic tenancies starting after this time, the landlord needs only to serve a simple notice to quit. Notice is only required to be the length specified in the tenancy agreement, and does not need to be in special legal form.

If the tenant refuses to leave, the resident landlord will, in some cases, have additional protection in that he is not required to go to court to evict the tenant. These are ‘excluded tenancies’ or ‘excluded licences’, as they are excluded from provisions of the Protection from Eviction Act 1977.

One of the main categories of excluded tenancies and licences is where the occupier, or a member of his family, shares living accommodation with the landlord who has his only or principal home in accommodation of which the shared accommodation forms part. (Section 3A(2) protection from Eviction Act 1977). Where a tenancy comes within any of these categories, the landlord is free to re-enter upon the premises and retake possession once the contract between the occupier and himself has been terminated.

Resident landlords with an excluded tenancy do not need a court order to gain possession. However, they must be careful not to commit the criminal offence under the Criminal Law Act 1977 of securing entry to premises by violence.

There are three ways to increase the rent for an assured shorthold tenancy:

•clause in the tenancy agreement or
•agreement with the tenant or
•by notice under section 13 of the Housing Act 1988.

Clauses in the tenancy agreement

Normally, it is not possible to review the rent during the fixed term of a tenancy unless there is a valid rent review clause, or the tenant agrees to an increase.

A clause can be incorporated that fixes the rent from one period of the fixed term to another and then at a different rate for the remainder of the fixed term. For example the tenancy could contain a clause where the rent is set at £600.00pcm from 15 January to 14 July and then increase to £650.00pcm for 15 July to 14 January the following year (using a 12 month fixed term as an example).

A clause can also be included to increase the rent after the fixed term has ended although it has been held that where the tenancy goes statutory periodic, such clauses are not carried into the new statutory periodic tenancy. Where there is a clause in a contractual periodic tenancy, the clause must comply with the provisions of The Unfair Terms in Consumer Contracts Regulations 1999 and be fair. Clauses allowing the landlord to review (and particularly to increase) the rent as he sees fit are likely to be unenforceable. Any increase upon a valid rent review is more likely to be enforceable if it can be justified by a recognised/established factor (such as significant improvements to the property or general cost increases reflected in the Retail Prices Index).

Clauses which provide for very large increases will normally be void. (for example where the rent increase is not to achieve a fair rent for the property but to increase the rent to a level where the tenant might be forced to leave or artificially raising it over £100,000 to cease the tenancy from being assured shorthold). A rent review clause could also be challenged by referring it to the rent assessment committee.

Rent increase by agreement

It is also possible to change the rent by seeking the tenant’s agreement and asking them to sign a document (such as a copy letter to the tenant proposing the new rent) which confirms agreement. Landlords wishing to do this are encouraged to speak to the tenant first to gauge whether or not they are content with the proposed new rent.

Once agreement has been reached, the landlord should send a formal duplicate letter proposing the new rent and asking the tenant to sign, date and return one copy to confirm their agreement. If the tenant fails to return the letter or fails to pay the new rent, then the rent will not have been validly reviewed.

It is not possible to increase the rent unilaterally by simply sending a letter to the tenant telling them that their rent will be increased from a specific date. If the tenant agrees to this and starts paying the rent, the new increased rent will have been agreed but if the tenant does not agree they can refuse to pay the increase.

Rent increase by notice under section 13 of the Housing Act 1988

If the tenancy is an assured or assured shorthold tenancy the landlord can use a formal procedure in section 13 of the Housing Act 1988 to propose a rent increase. To do this a prescribed form (section 13 notice) needs to be completed available from the .gov website here.

The form must be completed in full, and served on the tenant. At least one month’s notice must be given to the tenant. If the tenant does nothing during this period, then the rent increase will take effect. The start of the new rent increase must always be from a rent day.

It should be noted that the rent can only be increased by section 13 notice after the fixed term has ended, and that this facility can only be used once every 12 months.

If the tenant feels the rent increase is too high then they can refer it to the rent assessment committee for review. The application must be made no later than the last day of the notice period or it will be invalid and the increased rent will stand. If the rent is challenged the matter will be considered by the rent assessment committee who, if they consider the rent is not a market rent, will substitute what they consider is a market rent. The rent assessment committee’s view is not always in the tenant’s favour and it is not unknown for them to consider that the proposed rent may be too low.

Have some questions about increasing rent? Get in touch and we can advise you – contact details here

Yes they can.

Under ofgem rules if a tenant is directly responsible for paying the gas and/or electricity bills, they have the right to choose their own energy supplier and the landlord or letting agent should not unreasonably prevent this. If there is a default supplier clause in the tenancy agreement tenants are still entitled to switch supplier.

According to ofgem if letting agents and landlords include clauses in tenancy agreements forbidding tenants to switch suppliers, they are breaking the law.

We live in an age where consumers have plenty of energy suppliers to choose from and tools to help change suppliers easily – something the government actively encourage.

Further Reading: Switching supplier: quick guide for tenants here