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TENANCY AGREEMENTS

Assured and Shorthold Tenancies in the UK.

New rules governing the renting of property in England and Wales came into effect on 28th of February, 1997 and all tenancies entered into after that date will be subject to the new rules.

An EU Directive was issued in 1999 that aimed to protect the consumer against one-sided contracts using unfair standard terms in business contracts. As a tenancy agreement is a form of consumer contract using standard terms drawn up in advance they must be written in plain clear language which is easily understood. If a term in a contract is deemed to be unfair and puts either party to the contract at a disadvantage that term in the contract is not binding. The whole of the contract will be deemed void if the whole of the contract is unworkable without the unfair term. An unfair term is unenforceable in law.

A tenancy agreement is a contract between the tenant and the landlord. It may be written or oral in England and Wales. Written in Scotland. The Tenancy Agreement gives certain rights to the landlord and tenant. Agreements made between the landlord and tenant will be part of the tenancy agreement when they comply with the law. The landlord and tenant have rights and responsibilities given by law. The tenancy agreement may give the landlord and tenant more then there statutory rights, but they may not be unfair to any party. No term in a tenancy agreement may give either the landlord or tenant less then their statutory rights.

A tenancy may be either single or joint. All the people in a joint tenancy are responsible for meeting the terms of the tenancy. If someone leaves the property before the end of the tenancy without permission the remaining tenants are responsible for paying the full rent.

All new tenancies started on or after the 28th of February 1997 will be shorthold unless agreed otherwise in writing. The tenancy may last for a fixed term, that is a specified length of time, or go from one rent period to the next, which is a contractual periodic tenancy. Most landlords will grant a tenancy for six months and then from month to month after this. The tenant can, in either case, stay in the property for at least six months, during which time the landlord cannot ask you to leave unless there are specific reasons for doing so. The landlord must give two months notice in writing if you are required to leave. This can be served during the fixed term, but can only be implemented after any fixed term has expired.

An Assured Tenancy means that the landlord cannot gain possession of the property after six months and you may generally stay unless the landlord has specific grounds for eviction and applies to a court. A tenancy begun before the 28th of February 1997 is automatically assured unless a Section 20 notice, stating that the tenancy was shorthold, was served before the tenancy started. If you already had a shorthold tenancy before that date any new tenancy will be shorthold, unless the landlord gives written notice that it is assured. If the tenancy was assured the new tenancy will also be assured.

However, if your tenancy falls into one of the following categories the changes will not apply to you as the tenancy cannot be assured or shorthold if:
(a) The tenancy began before the 15th of January, 1989.
(b) It is a holiday or business letting.
(c) No rent is payable, a low rent of less than 250 or a very high rent of more than 25,000 is payable.
(d) There is a resident landlord.
(e) The property is let to a student by a university or college.
(f) The property is an agricultural holding or has more than two acres of agricultural land.
(g) The property is owned by a Government Department or the Crown.
(h) The landlord is a development corporation, a housing action trust, a local authority, a new town or a mutual housing association.

When you rent a flat, bedsit or house from a private landlord you should strive for a written tenancy agreement, signed by you and your landlord, giving the landlord's and tenant's names, giving the landlord's address, the address of the property, whether other people are allowed to use part of property, stating what type of tenancy has been agreed, the date the tenancy began, the rent payable, the date the rent is payable, rent review arrangements, the length of an agreed fixed term, what services, if any, the landlord will provide and what each person on the property is responsible for.

If you think that the rent is too high compared to other properties in the area an application may be made to a rent assessment committee within six months of the start of the tenancy.

The landlord has a legal right to enter and inspect the property at reasonable times during the day and to carry out repairs. At least twenty four hours written notice should be given of an inspection.

If the freehold of the property is sold by the landlord a tenant will still have the right to remain in the property under the terms of the tenancy agreement.

The landlord cannot evict a shorthold or assured tenant without first obtaining a court order. Any harassment or withholding of services by the landlord is a criminal offence.

There are special grounds for repossession of a property, for which the landlord applies to the county court.
Two weeks notice is required.
(a) If the tenant owes two months' rent.
(b) If the tenant has been persistently late in paying the rent.
(c) If the property is not being looked after properly.
(d) If the tenancy was granted on the basis of false information given to the landlord.
(e) If one or more terms of the tenancy agreement have been broken.

Two months notice is required.
(a) If the landlord requires the property to live in.
(b) If the bank wants to sell the property to pay mortgage arrears.
(c) If the property is needed for a minister of religion.
(d) If the landlord is redeveloping the property and cannot work round the tenant.
(e) If, after the death of the tenant, no one in the property has a right to live there.
(f) If the tenant was employed by the landlord but now is not.

In unusual circumstances, such as the tenants or visitors causing a nuisance to people in the area or using the property for immoral purposes, proceedings can be started immediately notice is served.

A deposit may be charged in addition to the agreed rent. This is generally one month's rent, but should not be more than two month's rent. All or part of this can be kept by the landlord at the end of the tenancy if rent is owing, there is damage caused by the tenant, or other bills are in arrears.

Tenancy Deposit Protection

From 6 April 2007, all deposits (for rent up to 25,000 per annum) taken by landlords and agents for assured shorthold tenancies (AST) in England and Wales have had to be protected by an authorised tenancy deposit scheme. (ASTs are the usual tenancies made between a private landlord and his tenants.)

There are two main aims:

  • to ensure good practice in deposit handling, so that when a tenant pays a deposit, and is entitled to get it back, he or she can be assured that this will happen
  • to assist with the resolution of disputes by having an alternative dispute resolution (ADR) service. It will also encourage tenants and landlords to agree - at the start of the tenancy - the condition and contents of the property

    Tenancy Deposit Protection in summary

  • landlords and agents are required to protect their tenants' deposits under a statutory tenancy deposit scheme
  • this means that deposits are safeguarded
  • if tenants have kept the property in good condition and paid the rent, and made sure that any other charges due under the tenancy are up to date, they will be able to get their deposit back
  • the schemes offer a free service to assist in resolving disputes

    To avoid disputes going to court, each scheme is supported by an alternative dispute resolution (ADR) service, whose aim is to make disputes over the repayment of the deposit faster and cheaper to resolve.

    The instrument makes amendments to Schedule 10 of the Housing Act 2004. The four main changes which set out in the instrument are as follows:

  • allowing either the landlord/agent or the tenant to claim the return of all or part of a deposit held in the custodial scheme without agreement from the other party if that party is not contactable or being uncooperative (custodial scheme only)
  • cancellation of individual deposit protection or membership in an insurance based scheme and enabling protection in another scheme (insurance based scheme only)
  • making Alternative Dispute Resolution the default scenario for dealing with disputes when the landlord/agent or tenant is contactable but silent as to how he wishes to resolve the dispute (custodial and insurance based schemes)
  • a general power for the scheme administrators to enable the adjudicator tasked to deal with disputes referred to the scheme's dispute resolution service to decide whether or not it is appropriate for him to deal with a dispute or continue to deal with one, in certain circumstances (custodial and insurance based schemes)

    The instrument sets out the prescribed information which a landlord/agent must pass onto the tenant at the beginning of the tenancy if he receives a tenancy deposit (ie within 14 days of the landlord/agent receiving the money from the tenant).

    The instrument sets out the interest rate which will be applied to a tenancy deposit that is safeguarded in the custodial scheme, when it is repaid to the person entitled to it.

    Before signing the tenancy agreement an inventory of any furniture or other equipment should be agreed, especially If the property is let furnished.

    A rent book is only required by law if the rent is payable weekly. Always ask for a receipt of rent paid if there is no book.

    The landlord is usually responsible for:
    (a) Repairing the structure of the property.
    (b) Maintaining and painting the exterior of the property.
    (c) Repairs to heating and hot water installations.
    (d) Keeping basins, sinks and baths in good repair.
    (e) Any other repairs agreed by both parties.
    (f) All gas appliances must be checked annually and maintained in good order.
    (h) Electrical appliances supplied by the landlord must be safe to use.
    (i) All furniture and furnishings supplied by the landlord must meet the fire resistance requirements of the Furniture and Furnishings Fire and Safety Regulations, unless it was made before 1950.

    If the tenancy has a fixed term of more than seven years these are not applicable.

    The tenant is usually responsible for:
    (a) Paying Council Tax, unless the house is in multiple occupation, when the landlord will pay it, but he may include this in the rent. Students are exempt from paying Council Tax.
    (b) Paying water and sewerage charges. If the landlord pays these he may include this in the rent.
    (c) Paying utility charges such as gas, electricity and telephone.

    If there is a break clause in the agreement, and a tenant wants to leave the property before the end of the tenancy, the landlord may give permission without incurring any penalties. If there is no break clause, and the landlord does not give permission, the tenant will be responsible for paying the rent for the rest of the fixed term. If the tenancy has no fixed term the tenant should give the landlord four weeks notice of the intention to leave.

    First year students at university or college will generally live in halls of residence in accommodation supplied by the university. The rent usually includes services such as electricity and heating, but most halls are now self catering. The types and prices of accommodation available at the university will be sent to the student, who must then make a choice. An agreement stating the rules will be issued and there may be a fee payable, to be repaid at the end of the year unless the key is lost or damage has been done to the premises.

    After the first year students are expected to find their own accommodation in the vicinity of the university. It is advisable to go to the housing officer in the university, who can then advise the student of properties that are recommended as accommodation. These may appear to be cheaper than the halls of residence, but the student will have to pay their own electricity, heating and telephone bills. Always read the tenancy agreement, which may be one that is approved by the university. The landlord will also usually ask for a retaining fee payable during college holidays, generally half the full rent.

    Remember that a Tenancy Agreement is a contract under English law and, as such, what is not written in it is "silent" and therefore cannot be assumed to be fact.

    The preceding is a guide and you should consult a solicitor if in any doubt about a Tenancy Agreement.

    Advice is available from your local CAB whose address and telephone number can be found in the local telephone directory or contact The National Association of Citizen's Advice Bureaux (CAB), Myddleton House, 115/123, Pentonville Road, London, England, N1 6LZ Tel: 0171 833 2181. The Office of Fair Trading, Field House, Breams Buildings, London, EC4A Tel: 0171 211 8000. Consumer Information Line and Public Liaison Unit Linkline 0345 224499 will also give advice.

    Hope this information has been of help.
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