Introduction to Tenancy Law
The law affecting landlords in England and Wales is vast and complex. Both novice and experienced landlords are advised to consult a solicitor specialised in housing law who can counsel on specific problems. Although limited by necessity, this chapter provides a general guide to the legislation and is intended to help instil a greater understanding of what is involved.
The Housing Acts
These provide the legal framework through which private residential tenancies are created and managed, and contain the definitions, rules and procedures affecting landlords and tenants in England and Wales . The Housing Acts offer statutory protection to both parties and deal with matters including harassment, eviction, tenancy termination, possession rights, rent increases and arrears.
The Housing Act 1988 introduced two types of tenancy - 'assured' and 'assured shorthold' - the latter being the most commonly used. Important changes made by the Housing Act 1996 mean that all tenancies created after 28 February 1997 are automatically the assured shorthold type, unless they fail to meet the criteria or the tenant was issued with an appropriate notice stating otherwise.
The Housing Acts are only part of the law involved. There is other legislation, such as that affecting furnishings which combine to make up the whole picture.
Confirming Permission to Let
Before completing the tenancy agreement, you must confirm you have all the necessary documents that legally authorize you to proceed. Where the property to be let has been bought with a mortgage you should:
- inform the lender in advance and obtain written permission to create a tenancy in accordance with any contractual obligation to do so; and
- incorporate any mandatory demands or restrictions of use, made by the lender, into the tenancy agreement; and
- inform the proposed tenant that the property is mortgaged and explain the implications for them (reference can be made in the tenancy agreement to an appropriate note for the purpose of clarity).
Should you fail to meet mortgage payments, the lender may seek to repossess the property. The tenant is unlikely to have any legal right to continue occupying it, but could take proceedings against you for being evicted. This may differ where the lender has recognised the existence of the tenancy and has agreed to it or where the tenancy was entered into before the mortgage began. Most lenders insist on prior notice being issued to tenants (under Grounds l and 2 of Schedule 2 of the Housing Act 1988). It is common practice for such notice to be included within the body of the tenancy agreement.
Where the property to be let is leasehold, you should also apply for permission from the headlessor. Always obtain such authority in writing before completing the tenancy agreement.
