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MonkeyNo1
17-02-2008, 19:46 PM
I have a tenant who is on an AST without a Section 20 Notice served, this was around 1992, does this mean the agreement was an Assured Tenancy rather than an AST? This agreement was for 6 months.

A year later, he signed an AST (this time with a Section 20 Notice), this was for 12 months.

He's live in the property ever since on these agreements.

My question: which agreement is valid and what type is it - an AST or AT agreement?

Thanks!

jeffrey
18-02-2008, 09:35 AM
1. Yes. Until Housing Act 1996 came into force, in early 1997, a letting governed by Housing Act 1988 was an AST only if preceded by a s.20 Notice.
2. The 1992 letting was therefore a Standard Assured Tenancy (unless 1988 Act did not apply at all- e.g. high rent, no rent, company let, resident L, etc.)
3. Grant of new AST in 1993 (preceded by s.20 Notice, this time) should then have created an AST (unless etc., as above).
4. As you served T with Notice under s.20, why are now you trying to argue that it's not an AST?

Bel
18-02-2008, 11:20 AM
If the tenant had an assured tenancy, I believe he cannot then be granted an assured shorthold tenancy with the same landlord, if the tenancy is a continuation.

jeffrey
18-02-2008, 11:27 AM
If the tenant had an assured tenancy, I believe he cannot then be granted an assured shorthold tenancy with the same landlord, if the tenancy is a continuation.
Yes and no.
See paragraph 7 in Schedule 2A to the 1988 Act. An assured tenancy (i.e. governed by 1988 Act) which replaces an SAT cannot be an AST- and would therefore have to be another SAT- UNLESS L serves Notice under para. 7(2) before new letting starts. The Notice warns T that the new letting will be an AST. This is ssimilar to the old s.20 Notice procedure.

Bel
18-02-2008, 12:14 PM
A very useful clarification

magnaman
18-02-2008, 12:30 PM
I am a property professional with many years experience in lettings, investments and tenancy law.

By asking the tenant to sign a new AST you have, in the eyes of the courts, created a tenancy which is unlawful and invalid. The original tenancy takes precedence and cannot be varied. Indeed, there have been cases where even if the landlord has a copy of the section 20 and the tenant disputes having received one, the courts will air on the side of caution and find in favor of the tenant. Section 20's should be signed by both the landlord and tenant as proof of service. They are of course, no longer required.

More disturbing is the fact that you have a tenancy which is protected by statute law and the tenant has security of tenure. In other words, they are there for life. You may only get possession if the tenant has breached the terms of the original agreement or is in arrears. However, in the case of assured tenancies, the courts will allow tenants to make minimum payments to catch up with the arrears because of their secure status.

Because of the nature and implications of the tenancy, the value of the property is also drastically reduced because these properties are not mortgageable. The value is reduced by as much as 40% - 50% of market value.

You should also note that the tenant may apply at any time to the Rent Assessment Panel via the Rent Service (Government Body - see your local Yellow Pages) to have the rent assessed. Although assured tenancies command a "market rent" the assessment panel regularly reduce rents.

I can answer any further questions and give additional advice, if you need it - no charge!. Please call Simon Marks on 0845 257 0170

pcwilkins
18-02-2008, 13:22 PM
I am a property professional with many years experience in lettings, investments and tenancy law.

You also work for an investment company that "specialises in these types of property" and "purchases hundreds every year".

Just a warning to MonkeyNo1 that your advice may not be entirely impartial...

Peter

jeffrey
18-02-2008, 13:39 PM
I am a property professional with many years experience in lettings, investments and tenancy law.

By asking the tenant to sign a new AST you have, in the eyes of the courts, created a tenancy which is unlawful and invalid. The original tenancy takes precedence and cannot be varied. Indeed, there have been cases where even if the landlord has a copy of the section 20 and the tenant disputes having received one, the courts will air on the side of caution and find in favor of the tenant. Section 20's should be signed by both the landlord and tenant as proof of service. They are of course, no longer required.
So please let us have your comments on my post #4, which diverges from your view.

MonkeyNo1
18-02-2008, 17:55 PM
Thanks for the replies guys. I do agree with Simon (magnaman).

As the rent had not been increased since 1993, I'm looking to now increase the rent by a Notice to increase rent form. My question is... which agreement should it be based on? The 1st agreement starts on 25th of the month and the 2nd agreement starts on the 3rd of the month.

I've heard that if you fill in the wrong date for rent to increase on, it'll be regarded as invalid. As a valid date has to be the same date that the agreement period begins. Is this true?

MonkeyNo1
19-02-2008, 18:43 PM
No one knows which agreement rent increase should be based on?

jeffrey
19-02-2008, 19:00 PM
No one knows which agreement rent increase should be based on?
If neither Agreement involved a rent increase clause, it must follow that the propsed increase is not based on either of them.
The s.13 procedure (assuming that it applies) requires:
a. L to serve Notice on T, stating new rent proposal; and
b. T either to accept it (expressly, or by failing to object) or reject it (by objecting, in which case Rent Assessment Committee decides what is fair rent on open market; see s.14).

magnaman
20-02-2008, 11:53 AM
Jeffrey: If the tenant sought legal advice or challenged the validity of the notice, he would discover that the new tenancy was unnecessary and would have an adverse affect on his statutory rights if signed. You will no doubt be aware that the courts do frown upon anyone, especially a professional landlord who may have taken advantage of a tenant. In my opinion, if Monkey No1 was to serve the standard NTQ and the tenant challenged it, because of the length of the tenancy and the fact that there is no proof of service on the tenant, the courts would very likely agree that the tenancy is an Assured and not an AST

PC Williams: All the information I have offered can be verified via the Rent Service and is free. Any vendor should seek legal advice and that of a chartered surveyor who specializes in Landlord and Tenant law before making any decision. However, most conveyancing solicitors are pretty clueless - would be happy to recommend a firm or two who I hastened to add, we don't use!. We offer solutions to landlords with problem properties or tenants - no harm in offering to relieve a landlord of a burdensome situation, many do every year.

magnaman
20-02-2008, 12:39 PM
The second one - although the second is very likely invalid it is current however, if you serve the notice increasing the rent to current market rent, beware. The tenant could challenge the rent increase which would open up the question as to the status of the tenancy. Alternatively, the tenant may give you notice to quit (NTQ) because he/she cannot afford the new rent. Finally, you could serve an NTQ (2 months and not 1 months notice from the date the tenancy commenced ie. 3rd of the month - you could serve this anytime between now and 2nd March requiring possession on 3rd May 2008) and wait for the reaction. Suggest you either hand it to the tenant personally or send it by recorded delivery. In regard to the rent increase, adhere to the terms of the original tenancy or give at least one months notice from the anniversary date the tenancy commenced on. Again, serve it personally or record the delivery.

If the tenant vacates, you will be able to re-let at a market rent and not be burden with the current situation of having a protected tenancy. Even if the tenant seeks advice and discovers that they are an assured tenant (although I believe he/she already does know), because the rent equates to a level set in 1992 the tenant will find it almost impossible to find a similar property at the current rent and pay up....ring if you need any help - no charge or obligation!

Best wishes

PaulF
20-02-2008, 13:51 PM
Here's my twopenn'orth -the tenant having been granted an assured tenancy has then later been offered an AST (and by the prior service of a S.20 Notice) which he signs. The service of a S.20 must be done prior to the tenancy commencing, yet a tenancy had already commenced which had been established. The act by the landlord was merely to remove security of tenure from an assured tenant which in itself is preducial to his rights; unless the landlord had splelt out in no uncertain terms that the tenant was giving up his security of occupation by signing a new tenancy agreement and being advised to consult the CAB or a solicitor beforehand then it would be an invalid act by the landlord.

A friend of mine served a S.20 in his tenant prior to granting a tenancy in 1995 but was unable to produce an acknowledgement from the tenant in court when he went for possession in 2006 and the judge would not grant possession under S.21. There was nothing either in the TA to say the S.20 Notice had been served and the tenant is still there with an assured tenancy. Small mistake - big problem!

MonkeyNo1
24-02-2008, 13:17 PM
Thanks for all the help everyone... I think I understand it all now.