Author Archives: admin

Oral Tenancy Agreement

Any form of verbal or oral agreement made between tenant and a landlord, in accordance with all the terms mentioned in Tenancy Agreement, is referred to as oral tenancy agreement.

The main aspects of this type of agreement is first discussed in great details and understood by all the involved parties, primarily tenant and a landlord. It doesn’t matter if the tenancy agreement is discussed orally or they are mentioned in written; following conditions are included in this type of contract.

  • Property Details: This part contains all the details about the address of the property that is being rented out.
  • Term: This part is used to specify starting and ending date of tenancy period; also known as  “fixed term”
  • Rent: This is referred to as the amount of rent to be paid by the tenant to the landlord. This may also contain the method and the exact date of payment of rent.
  • Deposit: This part contains the total amount of the deposit, and what are the things that this deposit will actually cover.
  • Deposit Scheme: This consists of Tenancy Deposit Scheme in which the deposit is usually secured.
  • Landlord’s Obligations: This usually contains the responsibilities and duties of the Land owners.
  • Tenant’s Obligations: This usually contains the responsibilities and duties of the Tenant towards his landlord and property.
  • Other Special Provisions: This part usually contains other special provisions that are agreed upon between tenant and landlord, for instance pets, sub-letting, and smoking, etc.

Oral/Verbal Tenancy Agreements are absolutely legal. However, they are not usually recommended because there is no way of knowing and proving anything at the time of the dispute. For instance; if a dispute arises between the tenant and the landlord about the amount of money in rent, it can become quite difficult for making a ruling about who is right or wrong without any written document.

There can also be legitimate issues where the landlord or tenants genuinely don’t remember about the agreed terms and conditions. The types of problems that usually occur with verbal or oral agreements are not always serious; but they can still cause major complications. Therefore, it is always recommended having a written tenancy agreement in order to avoid all these problems.

As in case with assured shorthold tenancy, proper statutory rights are given to both tenants and landlords; it doesn’t matter if the agreement is written or oral. All these rights are mentioned in the Housing Act 1988, Housing Act 1996, and Housing Act 2004.

Tenancy Deposit Scheme

According to Tenancy Deposit Scheme, it’s mandatory for every landlord or even letting agent to protect the deposit of tenant through this scheme. This scheme has been started by government from April 6, 2007. This is a type of legal requirement for all landlords who want to rent out their property.

What is the reason behind the introduction of Tenancy Deposit Scheme?

This scheme has been introduced by the Government primarily to protect and safeguard the tenancy deposits, and offer a fair system in order to settle all the disputes concerning the return of deposits at the end of the tenancy period. Before the introduction of this scheme, there used to be many complications about whether the dispute is getting resolved fairly or not. Now, with this scheme, government introduced an independent service that helps to effectively resolve these disputes. Any tenant can avail this service at completely free of cost.

What will happen if I paid the deposit before April 6th 2007?

If your tenancy period started before April 6th 2007, this means that the landlord is not required by law to protect your deposit under this scheme. At the same time, if any new tenancy agreement has been signed since the original date, your deposit will be automatically come under the tenancy deposit scheme. An important point to note here is that, the law does not specially states that the landlord has been bounded to protect this deposit, but it’s just a suggestion by the Government that they should protect the deposit under various circumstances.

What does the letting agents or landlord have to do?

After a tenant has paid the required deposit, the landlord or the letting agent have the responsibility to protect this deposit by following all the terms mentioned in tenancy deposit scheme. In this scheme, there are basically two types of schemes available:

  • In custodial scheme, agent or the landlord pays a certain deposit to this scheme, and this independent service will keep it until the end of tenancy period.
  • In insurance scheme, agent or the landlord can keep all the deposit; however, he pays all the insurance premiums in this scheme. So, it just means that the deposit is completely insured. In case of any dispute, this scheme will repay the amount to the tenant directly. This insurance scheme can also charge a certain amount of fees from landlords for getting a membership. This scheme can also require certain contributions concerned with the incurring costs of insurance.

It is entirely up to the agent or landlord to decide upon what scheme they want to use. All the required information about the scheme must be provided to the tenants within a period of 14 days at the time of payment of deposit. This information can include:

  • Contact details of agent or the landlord
  • The type of tenancy deposit scheme which is being used and other contact details regarding the scheme
  • Any information about the main purpose or use of a tenancy deposit
  • The procedure that a tenant can use to apply in order to get his deposit back after the end of the tenancy period
  • The process that the tenant should follow in case any dispute arises due to the deposit

What happens if the agent or the landlord doesn’t agree to provide the required information, or of they haven’t protected and secured the deposit of tenant?

In these cases, the tenant can easily apply for getting an order against the agent or the landlord in the county court, stating that the landlord should pay his deposit back, or secure it in any one of the various schemes under tenancy deposit schemes.

In addition to deposit, the court can also make agent or the landlord to pay the required compensation to the tenant, which is usually equal to 3 times the original value of the deposit paid by the tenant.

What actually happens at the end of the tenancy?

At the end of the tenancy period, if the letting agent or landlord agrees on the amount of deposit that should be returned to the tenant then within ten days the tenant should get their deposit back without any hassle.

In case the deposit was secured in any custodial schemes, the tenants will also receive certain interest on their deposit. Tenant can get their deposit from custodial scheme directly, or either by electronic transfer or by using a Cheque. If the deposits are held in an insurance-based scheme, then it will be repaid to you by your landlord either by Cheque or in cash. An important point to note here is that any interest in the deposits invested in any insurance-based scheme will not be passed to the tenant.

Major Government approved Deposit Schemes

How to End a Tenancy Agreement?

If both tenant and landlord agree upon ending the tenancy agreement

If both parties agree upon ending a tenancy agreement, it is quite easy to achieve, and can be done any time throughout a tenancy. This type of ending a tenancy agreement is usually known as ‘surrender’.

Both tenant and landlord should agree to end the tenancy in written so that it can clarify all the agreed upon terms and conditions. In case of a joint tenancy, all the involved tenants of the property must agree to end the tenancy for surrender.

If a tenant legally surrenders a tenancy, the landlord has all the rights to take possession of his property according to Section 5 mentioned in the Housing Act 1988.

The landlord has the responsibility to make sure that the agreement should end properly. In case, the landlord claims possession of his property even if the tenants have not agreed to end the tenancy, the landlord can be easily accused of eviction by unlawful means.

There are various ways in which tenant can surrender a tenancy. First one is, by following ‘operation of the law’ and the second one is, by using a ‘declaration of surrender’.

Surrender by using ‘Operation of the Law’

Operation of the Law is to a tenancy surrender, in which a tenant simply surrenders the procession of the rented property to his landlord, and thereafter landlord accepts the procession. This act may include return of property’s keys to the landlord by the tenant, and the landlord accepts that the tenancy agreement is completely over, and that landlord now has the possession.

Surrender by using Declaration of Surrender

Operation of the Law is to tenancy surrender, in which tenant gives a written document to his landlord. This written document acts a proof of tenancy surrender by the tenant to the landlord. The document is referred to as ‘Declaration of Surrender’. In this type of tenancy surrender, the landlord must accept this surrender so that tenancy can end successfully.

How to end a fixed term tenancy

A fixed term tenancy is a tenancy that is applicable for a fixed time period; the time period is agreed upon by both parties in the tenancy agreement. In this type of agreement; there is normally a starting date and an ending date of tenancy, which are essentially the fixed dates in the tenancy agreement.

A number of agreements on fixed term tenancy consist of a ‘break clause’. This break clause permits all the tenants to end their tenancy agreement anytime before the actual ending date of fixed term. If break clause exists in the agreement, the tenant can easily give written, or verbal notice to end a tenancy, however, they have to follow all the procedures mentioned in the tenancy agreements, for instance, the nature of notice they must give to their landlord.

In case the agreement has no break clause, the tenant cannot easily end the tenancy on his side; he has to take agreement from his landlord. In case the tenants make any move to vacate early, or before the ending date, and without getting an agreement from his landlord, the tenants can be easily made liable for continue to pay rent till the end of fixed tenancy period.

A tenant has all the rights to give possession of the property on the last date of fixed period without any notice. On the other hand, if the tenant doesn’t leave the property even after the end date of fixed term, this tenancy will become a ‘periodic tenancy’ automatically, and tenants will have to give clear and proper notification to avoid this unless the landowner agrees that they can leave.

In case the landlords want to end the agreement, which is usually for six months or one year, or any time period of fixed term tenancy, the landlord must give a Section 21 – Notice of Possession to his tenants, usually, at least two months prior to the ending date of fixed term.

How to End a periodic tenancy agreement

After the ending date of a fixed term tenancy agreement, if there is no new contract that has been prepared or signed, the tenancy automatically becomes a periodic one. All terms and conditions mentioned in the earlier tenancy agreements will still apply on the new agreement, but the only exception is that this new contract will be based on month-to-month approach, or even on week-to-week approach in some cases. It actually depends on the tenant, and how often he plans to pay the rent. If landlord collects rent every month, then the contract will be considered as month-by-month contact.

The landlord has the right to end a tenancy depending on rental period in a periodic tenancy. As in the above case, if a tenant pays the rent every month, then the landlord just needs to serve a one month notice to his tenant. The notice must be given in writing, and it must contain the starting and ending date of periodic tenancy agreement, unless it has been mentioned in the tenancy agreement that the tenancy can be ended on any different date.

On the other hand, a tenant can also decide to end his periodic tenancy agreement. He just needs to issue a valid notice to the landlord to end his periodic tenancy.  In order to end their agreement, the tenant must provide a rental period to his landlord. Once this notice, given to the landlord, expires, the agreement of tenant will automatically end.

How to end a tenancy agreement early

In case the landlord needs to end his tenancy agreement early before the ending date in agreement, but if the tenant refuses to do so, the landlord has no right to regain possession legally and early, but he can give a Section 21 – Notice of Possession to his tenant before at least two months of the ending date of fixed term, so that the tenants can have the notification regarding the exact date to leave.

However, if a tenant breaches any clause in the agreement, the landlord can end the tenancy even before the end date of fixed period. To achieve the purpose, the landlord must give a section 8 notice to his tenant, which is essentially a notification to quit. This notice informs the tenants that the landlord seeks the possession, and it also states the grounds for the possession. Landlord can regain the possession without a legally valid notice.

In most of the cases, the tenants automatically leave the property once a section 8 notice has been served to them. If this is the case, the landlords don’t have to apply at courts for gaining possession.

However, if the tenants refuse to leave the property even after landlord serve them the section 8 notice, and even after it expires, the landlord can apply at a court to seek possession of his property. In case, the landlord has the right to gain possession, the time period for obtaining possession will be decided by the court. This decision is normally dependent on various circumstances.

What’s the procedure to if your tenants refuse to leave the property?

If your tenants refuse to leave the property even after a fixed term tenancy ends, the landlord will need to give his tenant a section 21 (Notification of Possession), providing them a minimum two months notice period. However, if your tenant again refuses to leave the property after this new notice expires, the landlord will be required to submit an application for possession in the court.

Section 21 – Notice of Possession

How to End an Assured Shorthold Tenancy

For ending an Assured Shorthold Tenancy, (AST), landlord must serve a “Section 21- Notice of Possession” to his Tenants.

What exactly is a Section 21 Notice of possession

A Section 21 Notice for possession is essentially a legal document that must be given by a landlord to his tenants if he wants to regain possession of his property. As a landlord, you can easily give a Section 21 Notice of possession to your tenants, without even providing a reason for doing so. You can serve this notice of possession on or after the end of an Assured Shorthold Tenancy.

What is the best time to issue a Section 21 notice?

According to Section 21 of the Housing Act 1988, a Landlord has all the legal rights to obtain possession of his property after the end of an Assured Shorthold Tenancy. This is true as long as the tenancy has come to an end, and the landlords have followed all the legal procedures correctly and properly by issuing Section 21 Notice to their tenants. If you want to completely protect yourself, it is often recommended that a Notice should be given to all the tenants residing in your property; this holds specifically true in ‘shared accommodations’.

In case, the tenancy has not yet ended, but there is a valid reason to evict your tenant, then you can easily serve a Section 8 Notice to your tenants. However, you should make sure that the ‘notice to quit ‘you serve to your tenants is completely valid.

Service of Notice

The landlord can serve the notice either by post or deliver it to the tenants in person.

In case, you decide to serve the notice by using postage services, it is often advisable that you should do this with the help of ‘recorded delivery’ service. This record will act as a proof that your notice has been received properly by your tenants. You can use this proof in Court if the need arises. The date of post in the recorded delivery service is recognised as a legal proof by the Court, however, it considers the date on which the notice arrives instead of the day on which it is sent.

On the other hand, you can also deliver the letter containing the notice in person. In this case, it is often recommended that you should take a witness along with you. This witness is required in court to confirm the statement on your part regarding the delivery of eviction notice, or in case your tenant claims that you have not provided him the notice.

How to Serve a Section 21 Notice for the period of the Fixed Term of the Tenancy

Section 21 of the Housing Act 1988, which is amended under the Housing Act 1996 describes, “the landlord under a fixed term tenancy to give two months’ notice to recover possession in writing”.

This section means that if a tenant is covered with an Assured Shorthold Tenancy, he must be provided at least two months written notice before the end date. The landlords can accomplish this by serving a Section 21 Notice stating all the intentions to repossess their property, and the proper grounds and basis they are using to support the eviction claim. This two months period, after serving the written notice, starts after the tenant provides Section 21 receipt confirming that he received the notice.

According to the Housing Act 1988, the landlord cannot take possession of his property during anytime within the fixed term of the tenancy; however, he can serve a Notice as long as the tenant is provided at least a two month’s period before the eviction date. After a period of two months of ‘Section 21 Notice’, the tenant will be legally required to leave the landowner’s property. It’s worth mentioning that Section 21 Notices can be served up to the last date of the fixed term tenancy.

Various provisions available in section 21(1) (b) that can be used to apply for a fixed term tenancy:

“Without prejudice to any right of the landlord under an assured shorthold tenancy to recover possession of the dwelling-house let on the tenancy in accordance with Chapter I above, on or after the coming to an end of an assured shorthold tenancy which was a fixed-term tenancy, a court shall make an order for possession of the dwelling-house if it is satisfied- “

a)      “that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than a statutory periodic tenancy:”

b)     “the landlord, or in the case of joint landlords, at least one of them has given to the tenant not less than two months’ notice stating that he requires possession of the dwelling-house.”

It is quite possible to serve this Notice within at least two months before the ending date of the tenancy period; however, it should never be dated for just the purpose of expiring on or even before the last date of the tenancy period. For instance, let’s say the tenancy period is to end on 31 March then the eviction notice can be given to tenants even 3 months before the last date i.e. on 30 December. However, the date mentioned on the notice must be provided on or before the last day of the fixed term, on which the tenancy period comes to an end i.e. 31 March.

In case a Section 21 Notice is given by the landlord during any time in the fixed term of the tenancy period, but the landlord also issues another fixed term tenancy to his tenant, then also landlord is required to serve a New Section 21 Notice to his tenant if the landlord wants to regain possession of his property.

Serving a Section 21 Notice during a periodic Tenancy

When the fixed term tenancy ends, the tenancy will automatically become a periodic tenancy, unless a new fixed term is signed. The new tenancy will be a week to week or a month to month periodic tenancy. It actually depends on the way your tenant wants to pay his rent.

According to section 21 of the Housing Act 1988, landlord has to follow a slightly different procedure in comparison to giving an eviction notice to tenants within a periodic tenancy.

All the assured shorthold tenancies, which have become periodic, comes under Section 21(4) (a) of the Housing Act 1988.

“Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied”.

(a) “that the landlord or, in the case of joint landlords, at least one of them has given to the tenant a notice stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling-house is required by virtue of this section; and”

(b) “ that the date specified in the notice under paragraph (a) above is not earlier than the earliest day on which, …….., the tenancy could be brought to an end by a notice to quit given by the landlord on the same date  as the notice under paragraph (a) above”

A minimum notice period of 2 months is required; if a landlord wants to serve section 21 notices to his tenant in the fixed tenancy. The notice must expire on the last date fixed tenancy.

The type of tenancy period actually depends on your tenant, and how frequently he pays the rent. If he plans to pay rent every week then the tenancy will automatically become weekly periodic tenancy. On the other hand if he wants to pay rent every month, it will become a monthly periodic tenancy.

This new periodic tenancy will start automatically right after the end date of fixed term tenancy. For instance, it the fixed tenancy ends on 5th, the periodic tenancy will start from 6th of that month. The last date for paying rent in this periodic tenancy will be 10th of every month. As a result, the expiry date of section 21 notice will is 10th of the month; however, it should be issued before at least two months prior to 10th of the month.

What a landlord can do when the tenant refuses to leave even after the expiry of section-21 notice?

In case, the tenant refuses to leave your property even after the expiry date, and on serving the notice by the landlord. The landlord can apply to the court against his tenant for the possession of his property. If the landlord follows all the procedures correctly and properly by issuing Section 21 eviction notice, there is no chance that the court will not grant him the possession of his property.

In case the tenant refuses to leave even after getting the eviction notice from the court, the landlord can approach county court to evict his tenant in order to regain possession.

How to use Break Clauses in preparing Tenancy Agreements

What exactly is a break clause?

A break clause is basically a clause present in a Tenancy Agreement, which allows a landlord and/or tenant to end the tenancy even before the end of the tenancy period, without paying any incurred financial penalties.

However, if there is no break clause present in the tenancy agreement, the tenant is considered responsible for paying the rent for the full tenancy period. He has to pay the rent even if he moves out of the property before the last day of the tenancy period.

How a break clause can be used by the Landlords?

An important point to note here is that even if the break clause is included in the tenancy agreement, under the Housing Act 1988  landlord is prohibited to get possession of his property for at least six months after the agreement begins. So, a landlord can only use break clause to evict his tenant if the tenants have been using his property for six or more than six months. Also, it’s mandatory that the landlord must serve at least two months eviction notice to his tenants, which can be done by issuing the notice during the fourth month in the tenancy.

Landlord is required to issue a Section 21 – Notice of Possession to his tenants in order to put in force the break clause.

How a break clause can be used by a Tenant?

In case the tenant wants to use the break clause, he must serve a notice in written (but not a Section 21eveiction notice) after a time period of 6 months in the tenancy agreement. The first step is to prepare properly written complete document with his signature, and then surrenders the tenancy to the landlord. Here, also, a two month notice is required on part of the tenant before terminating the fixed period tenancy.

What a landlord can do if the tenant refuses to vacate the property?

If the tenant refuses to leave the property even after landlord enforces the break clause under Section 21, the next step a landlord can take is to issue the Court proceedings.  Landlord can also request a Judge to order the possession of his property. The Judge will then analyze the break clause to determine its validity.

What if both landlord and tenant want to terminate the tenancy?

If both landlord and tenant want to terminate the tenancy, then break clause has no role to play in the whole process. If both parties agree to end the tenancy, they can easily do this by just surrendering the tenancy. This can be easily accomplished by a written document, signed by both parties.