Lease versus ASTs

[brookslrj]

undefinedHello. I need a little advice. I currently run three HMOs and operate these using AST agreements for each of the tenants. A friend of mine also has a number of HMOs but uses a lease agreement rather than an AST. This agreement is a lot 'tighter' than the AST and consists of only 1 page as opposed to 8 pages in my AST. The lease also specifies that breaches of the lease enable me to terminate the lease with 1 weeks' notice. Does anybody else use leases for residential property agreements and know of any advantages/disadvantages. The area most of concern to me is on termination as how would I enforce these? Any comments or advice greatly appreciated. Thanks Lee.

[Paul_f]

What your friend thinks he has done might not be what he has created. Remember since 1997 any lease is automatically an AST unless a S.20 notice was served in advance of that on the tenants, and they were properly advised of their tenancy rights before taking up residence.

It's no good trying to be "clever" to circumvent statutory legal rights of tenants. The one week's notice I fear wouldn't work and could be tantamount to harrassment and in contravention of the Protection from Eviction Act 1977.

What he also probably doesn't realise is that he wouldn't be able to use the Section 21 route if he wanted to evict his tenants and his only redress would then be to get an order from the court to do so. I feel he would be in big trouble if he tries to do it any other way and he would inevitably fail! He might have got away with it so far but a fine of £10,000 or so could be coming his way if one of the tenants takes some "advice" from the CAB or a solicitor. Tell him not to even try! It is a criminal offence and could attract a term at Her Majesty's pleasure!

[brookslrj]

Paul, Thanks for this. I guess the real issue here is that a detailed AST takes at least 8 pages of small print and takes a lot of reading.

Given the number of times that the tenancy changes in HMOs I was hopeful to try and streamline the process for both for my tenants and myself and generally make things clearer to understand.

Is your main concern the 1 weeks notice because this could easily be changed. Presumably I could issue a Section 20 notice to ensure that the tenant knew it was a lease rather than AST and provided notice was given to end the lease correctly, if the tenant didn't leave then you could go to court without going through the delays/paperwork for the Section 21 notice?

I am not trying here to get around any rights of tenants (sharers?) as I have always done things properly but it does seem to me that an 8 page AST is overkill, also the time and money involved in enforcing these is a bit of a nightmare. Very often (in my experience) people renting rooms want to leave with 4 weeks notice anyway rather than the full 6 months. What do you think? Thanks Lee.

[P.Pilcher]

You might consider simplifying your AST in line with modern requirements. The 2004 specimen AST provided by the Residential Landlords Association for their members is only 4 sides of quite reasonably sized print - that is two full pages.


P.P.

[Paul_f]

Lee. You're getting jumbled. A lease and AST are one of the same thing. Issuing a S.20 Notice doesn't stop the lease being effectively an AST but watch out! Your friend might be creating perpetually renewable Assured Tenancies if he's not careful and eviction might be nigh impossible.

Clearly your friend is out of his depth here and should not tamper with issues he doesn't fully understand.