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Contents

Introduction
Types of tenancy
Tenancy terms
Rent
Deposits
Eviction
Ten top tips
Forms
About Young&Pearce

Introduction

Full range of landlord services

Buy to let is a popular way of investing in the property market. It can be a sound capital investment with the added benefit of providing an income from rent. However both for seasoned landlords and those new to the market, the experience can turn into a nightmare if the tenant does not pay the rent, damages the property or fails to leave at the end of the tenancy.

Every landlord needs to keep his wits about him. The law usually seems to favour the tenant and whether a landlord owns one or ten properties, the tenant’s rights and the obligations of the landlord are the same.

Young&Pearce provide a full range of landlord services - from drawing up a tailored tenancy agreement for a multi-unit landlord to assisting a new landlord in a first letting, advising on rent review or when things go wrong. We will prepare and serve notices requiring possession, default notices and possession proceedings, advising on the best strategy to meet the landlord's objectives. In problem cases with bad tenants, we will be there for you.

We also, buy and sell properties, undertake finance or re-finance work and assist in identifying possible sources of finance.

These pages are intended to show landlords the way through the maze of housing law and to provide advice on letting properties from the start of the tenancy right through to the process needed to recover possession if something goes wrong.

Types of tenancy

Main types of tenancy

There are two main types of private sector residential tenancy. 

• Assured Shorthold Tenancy - This is the most common type of tenancy.  It is usual for there to be a fixed term but this is not essential.  If there is no fixed term or the fixed term is less than 6 months, the landlord still cannot recover possession until six months from the start of the tenancy.  Subject to that, if the correct notice is served at the correct time then the landlord can recover possession even if the tenant has not breached the terms of the agreement.
• Assured Tenancy - This is a tenancy which is capable of running for many years and which will give the tenant security of tenure.  The ways in which a landlord can recover possession from an assured tenant who refuses to leave are limited.  This type of tenancy is rarely created.  A tenant with a assured tenancy is often called a "sitting tenant".

Nowadays, a tenancy will nearly always be an assured shorthold tenancy unless special steps are taken to create an assured tenancy.

Main distinctions

The important distinction between the two types of tenancy is security of tenure.

• With an assured shorthold tenancy the tenant has little security once any fixed term of the tenancy has ended.  After six months the landlord can recover possession on two months' notice provided that any fixed term has ended.  If the landlord allows the tenant to stay on after any fixed term expires, he can still obtain possession by giving two months' notice.
• With an assured tenancy, the tenant gets security of tenure.  Unless certain specified grounds apply, the tenant can remain in the property indefinitely.

Exceptions

Every tenancy in the private sector created since 1989 will be one or other of these tenancies, unless:-

• It is a business or holiday let;
• No rent, a very high or a very low rent is charged; or
• The landlord is a “resident landlord”.  This is where landlord shares accommodation with the tenant.

These types of letting are not subject to the rules applicable to assured tenancies and assured shorthold tenancies and different rules apply.

The following tenancies cannot be assured shorthold tenancies:-

• A tenancy replacing an earlier assured tenancy with the same tenant.
• An assured tenancy to which the tenant has succeeded on the death of a previously regulated (i.e. pre-1989) tenant.
• An assured tenancy following a secure tenancy where a tenancy has become a private tenancy from a public sector landlord; and
• An assured tenancy arising automatically when a long leasehold tenancy expires.

There are also still some private sector tenancies which result from earlier legislation and do not fit into any of the categories discussed above.  Normally these tenancies give the tenant security of tenure.

Best form of tenancy

It is nearly always advantageous to let under an assured shorthold tenancy because recovering possession is easier. Where property is bought specifically to let, the mortgage lender will almost invariably insist on the property only being let on an assured shorthold tenancy.

Note that where an assured shorthold tenancy is granted with a fixed term of less than 6 months, the landlord cannot recover possession during the first six months even though the fixed term has ended.

If you purchase a property occupied by an existing assured tenant, you cannot then create an assured shorthold tenancy just by getting the tenant to sign a new agreement.   The tenancy will remain an assured tenancy and the tenant will therefore have security of tenure.  However it is possible for the landlord and tenant to adopt a special procedure by which both agree that a new assured shorthold tenancy will replace an assured tenancy.  Of course the tenant is unlikely to agree to do this but in some circumstances, he might.  An example would be a case where the landlord agreed to make a payment to "buy out" the assured tenancy rights.

Buying property already let

If a landlord buys a property with a tenant in it, he must investigate the status of the tenant carefully.  It will be important to know whether or not the tenancy is an assured shorthold tenancy, an assured tenancy or some other type of tenancy.

Note that:-

• It was not possible to create an assured shorthold tenancy before 15th January 1989.
• Until 27 February 1997 in order to create an assured shorthold tenancy the landlord had to serve a special notice on the tenant before granting the tenancy.  If this was not done the tenancy will be an assured tenancy and the tenant will have security of tenure.  Note that this special notice was abolished in 1997 and as already explained a tenancy is now an assured shorthold tenancy unless a special arrangement is made.

If proper care is not taken to investigate the position when buying property with a tenant in it, the landlord may inadvertently end up with a sitting tenant and a property worth less than he paid for it.

Tenancy terms

Written tenancy essential

A written tenancy agreement is vital.  The tenancy agreement will set out the terms of the tenancy and the obligations which each party undertakes.  The lack of a written agreement will in practice make it impossible for a landlord to evict a bad tenant during the initial fixed term of the tenancy if there is one.

If rent is payable weekly, the landlord must provide a rent book.  This has to contain certain information prescribed by legislation.  Forms of rent books can be bought from stationers.

Obligations of the tenant

It is usual for the tenancy agreement to contain quite detailed obligations.  See Forms for a specimen tenancy agreement.

Obligations commonly undertaken by the tenant are:-

• To pay the rent.
• To pay for all electricity, gas etc supplied and often to pay water rates and drainage charges.
• To keep the interior in good repair.
• To decorate the interior.
• Sometimes the tenancy agreement will say that the tenant must NOT re-decorate.
• Not to sublet the property.
• To allow the Landlord to inspect the condition of the property.

It is usual for tenants to be responsible for paying council tax except where the house is in multiple occupation, where it is usually the landlord’s responsibility.  In those instances, council tax is usually factored into the rent and paid by the landlord.

Tenants  should also take responsibility for payment of other utility bills and it is always a good idea to ensure that readings are taken and agreed with the tenant in respect of gas and electricity at the commencement and at the end of a tenancy. 

Obligations of the landlord

The main obligation of the landlord is of course simply to make the property available and a typical tenancy will not impose many obligations on the landlord.  Obligations commonly imposed on the landlord are:-

• To give "quiet enjoyment".
• To insure the property.

Quiet enjoyment is a legal term for a bundle of rights which the tenant has, basically the right to live at the property undisturbed.

In residential lets for a fixed term of less than 7 years the landlord is nearly always responsible for repairs to:-

• The structure and exterior of the property (including drains, gutters and external pipes).
• The installations for the supply of water, gas and electricity and for sanitation (including basins, sinks baths and other sanitary conveniences).
• The installations for space and water heating.

These duties are imposed by section 11 of the Landlord and Tenant Act 1985.  If repairs are required to structures or appliances covered by this legislation, then the landlord must carry out the repairs within a reasonable time after the tenant has given notice of the problem.  A landlord who fails to do that exposes him/herself to a claim for damages.  This duty does not cover things which the tenant is entitled to remove from the property.

Specimen agreement

There is a specimen assured shorthold tenancy agreement in Forms.  This contains quite a large number of clauses and in many cases not all of them will be necessary.  Every landlord should use a tenancy which fits his particular requirements.  There is no "one size fits all".  Special provision, to in the specimen, are needed where the property to be let is a leasehold flat.

Bringing the tenancy agreement into force

Make two identical prints of the agreement.  Obviously the tenant should read it carefully and the terms of the document should be acceptable both to the landlord and the tenant.  Once it is agreed the usual procedure is for the landlord to sign one print (which he gives to the tenant) and at the same time the tenant signs one print and gives it to the landlord.  It is equally correct for both parties to sign both copies.  Always observe these golden rules:-

• Do not date the document until both prints have been signed.
• The commencement date for the tenancy should never be earlier than the date on the agreement.
• Never let the tenant into the property until the tenancy agreement has been signed as above, dated and the landlord has a copy of a print signed by the tenant.
• Always get the rent for at least the first month before letting the tenant into the property.  The same applies to any deposit which it to be taken.

Houses in multiple occupation (HMOs)

There are new legal requirements relating to the registration of houses in multiple occupation (HMOs).  This is very important indeed because of the sanctions for non-compliance which are draconian.  From 6 April 2006, the Housing Act 2004 brought into force a new, compulsory system for the licensing of HMOs.

Definition  The definition of an HMO is contained in section 254 of the 2004 Act. It is too complex to describe fully.  Broadly the following are likely to be HMOs:-

• An entire house or flat which is let to 3 or more tenants who form 2 or more households and who share a kitchen, bathroom or toilet.
• A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to 3 or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.
• A converted house which contains one or more flats which are not wholly self contained (i.e. the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by 3 or more tenants who form two or more households.
• A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.

In order to be an HMO the property must be used as the tenants’ only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence.

There are two levels of licensing.

Mandatory licensing

This applies to HMOs which consist of three or more storeys and are occupied by two or more households comprising five or more people. If a property falls into this category the Landlord must apply for a licence from the local authority. In order to obtain a licence, the premises must be suitable and the landlord a fit and proper person.

Additional licensing schemes

In addition, individual local authorities have power to widen the scope of HMO licensing to cover other types of HMOs. Each local authority must make it own decision as to whether to introduce an additional licensing requirement. Before making such a scheme the local authority must:

• Identify the management problems arising from the types of HMOs in the area for which it intends to make the scheme, including the extent to which those HMOs have been managed in accordance with any approved code of practice for HMO management that is in force.
•  Consider whether there are other courses of action available to them that might provide an effective means of dealing with the issues which the scheme is intended to address and whether the scheme will significantly help them in dealing with those issues.
• Ensure that the making of a scheme is consistent with its overall housing strategy and is co-ordinated with its approach to dealing with homelessness, empty properties and anti social behaviour in the private rented sector.
• Consult on the proposed additional licensing scheme with those persons who are likely to be affected by it, including landlords, tenants and local recognised resident associations, and consider their representations.

An additional licensing scheme requires the consent of the appropriate national authority. The Secretary of State intends to extend general approval for additional licensing schemes to those authorities in England classified overall as "Excellent" or "Good" in Comprehensive Performance Assessment. In all other circumstances an individual scheme will require confirmation from the appropriate national authority.

Sanctions

These are significant:-

• Operating an HMO without obtaining the required licence is an offence and the landlord can be prosecuted. The current maximum fine for this is £20,000.
• In the case of an assured shorthold tenancy, the landlord cannot validly serve a section 21 notice to recover possession if the property is required to be licensed and is not.
• The Landlord can be required to repay the rent he has received in respect of any period where premises have been let without a licence where a licence is required.

Fees

Inevitably, landlords seeking to licence a property will have to pay a fee. The levels of fees will be set by each local authority and it is thought likely that a typical fee will be several hundred pounds. It is expected that more details information and details of the additional licensing scheme and the fees to be charged by local authorities will emerge in due course.

Identity of landlord

The landlord must give written notice to the tenant of an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant.  See Landlord and Tenant Act 1987, section 48.  This is usually done in the tenancy agreement.

Every written rent demand must specify  the name and address of the landlord.  If that address is not in England and Wales, the demand must specify an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant.

Changes in ownership

Where a property with a tenant in it changes hands, the new landlord must give the tenant written notice of the change and of his name and address (which can be his business address).

Failure to do this can result in prosecution and a fine.  See Landlord and Tenant Act 1985, section 3.

Also:-

• The old landlord can be liable for breaches of the tenancy occurring after the change of ownership and before the notice is given - so the old landlord has an interest in ensuring that notice is given.
• The tenant may continue to pay rent to the old landlord until notice is given.

Other regulatory matters

Gas and Electrical Safety - It is a legal requirement for the landlord to ensure that all gas appliances are maintained regularly and annual safety checks carried out by a CORGI qualified and registered engineer.  The landlord must keep records of the checks carried out and provide the tenant with an annual safety certificate.  He must do this either at the commencement of the tenancy or within 28 days of the annual inspection.

Electrical appliances  Also, the landlord must make sure that any electrical appliances that he supplies for the tenant’s use, such as cookers, washing machine etc are safe to use.

Furniture and Fire Safety  If a landlord supplies furniture, that furniture must meet the relevant fire safety requirements contained in the Furniture & Furnishings (Fire) (Safety) Regulations 1988.

Utility meters  Arrangements should be made for all meters to be read when the tenant takes over and again when he leaves.  This includes the water meter if there is one.

Television licence  The parties should consider who is to pay for this.  A well drawn agreement will provide for the tenant to buy a licence.  For more information see www.tvlicensing.co.uk/information/landlords.jsp

Rent

A subject dear to the heart.  Every tenancy agreement will fix the rent.  As time goes on the landlord will want an increase in line with market conditions.  How can this be achieved?

By agreement with the tenant

Normally the parties are free to agree a new rent.  This is the best course and it applies to both assured shorthold tenancies and assured tenancies.  But suppose the tenant will not agree.

Assured Shorthold Tenancies

Where a tenant is an assured shorthold tenant, the rent will be fixed for the initial fixed period of the tenancy and cannot be increased unless the tenant agrees.  Once the fixed period comes to an end however, the landlord can suggest that he will terminate the tenancy unless the tenant will agree an increase.  In practice if the tenant will not agree the landlord will either accept the position or terminate the tenancy by issuing a section 21 notice.

Assured  Tenancies (including assured shorthold tenancies)

If the tenant will not agree an increase the landlord can serve a notice of increase on the tenant under section 13(2) of the Housing Act 1988.  There is a specific notice for this purpose, which we will call a section 13 notice.

This can be used with assured tenancies (where the tenant has security of tenure).  However the section 13 notice procedure can also be used with assured shorthold tenancies as an alternative to terminating the tenancy (although this is unusual).

A copy of the notice is in Forms.  The form of notice is prescribed by law and a notice which does not comply will probably be held to be invalid and ineffective.  The notice must specify the date on which the increase is to take effect.  Considerable care is needed to complete the form properly but the guidance notes within the form itself are helpful.

The notice cannot take effect until after the first anniversary of the tenancy.  The notice must give at least the following notice of the increase:-

• If the tenancy is a yearly tenancy, not less than 6 month's notice.
• Where the period of the tenancy is less than a month (the usual example would be a weekly tenancy), not less than a month's notice.
• In any other case a period equal to the period of the tenancy.

The notice must not specify a date for the increase to start which is less than a year after the rent was last increased under these rules.

If the landlord seeks to increase rent without serving a section 13 notice then the tenant is not liable to pay the increased rent.  If the landlord later seeks possession based on the arrears of the increased rent, the court may not allow the landlord the increase.  Therefore there may be no arrears of rent and a possession action  based on rent arrears would fail.

If the tenant does not agree to the increased rent proposed in the notice, the tenant can refer the proposed new rent to a Rent Assessment Committee.  The application must be made by the tenant and received by the Rent Assessment Committee no later than the day before the date on which the new rent is due to start.  If the application is not received in time, or is not made at all, the landlord's proposed rent becomes the rent payable.

The Rent Assessment Committee is a statutory body consisting usually of a property valuer, a layman and a lawyer.  It will in some circumstances invite representations from landlords and tenants.  The committee will visit the property and, having carried out research into market rent levels in the area, will fix the rent.

Once the rent is fixed, then that is the maximum that the landlord can charge until the review procedure can be repeated.

Rent periods

The tenancy agreement should specify the rent payment dates.  If payment is monthly, payment should be on the same date each month.  The first is ideal because the tenant will just have been paid.  For weekly rent, specify a payment day.  For monthly rent, consider the use of a standing order.  You can only insist on this if the tenancy agreement says so.  If you do get the tenant to pay by standing order, be sure to check your bank statement soon after the due date so that you can act quickly if a payment is missed.  There is a form of standing order for monthly rent in Forms.

Deposits

Compulsory deposit scheme

From 6^th April 2007, the Tenancy Deposit Protection (TDP) scheme applies to all deposits taken by landlords for assured shorthold tenancies.  The scheme does not apply where the rent exceeds £25,000 p.a.

The scheme was introduced to ensure good practice in handling deposits so that a tenant who pays a deposit and is entitled to get it back can be assured that it will be repaid. Where there is a dispute about repayment, the scheme encourages the use of Alternative Dispute Resolution (ADR).

The scheme applies to all assured shorthold tenancies, not to assured tenancies. It only applies to assured shorthold tenancies that began on or after 6^th April 2007. Deposits paid for tenancies that commenced before that date are not subject to deposit protection.

If however a new tenancy agreement is granted to an existing tenant after that date (where for example an earlier agreement has come to an end), any deposit paid at the start of the first tenancy will be caught by the scheme. Deposits paid by tenants who ‘hold over’ without a new agreement will not fall into the scheme.

How does it work?

Landlords are able to choose between two types of scheme: a custodial scheme and two insurance based schemes.

Custodial scheme:-

• Once a deposit is paid to the landlord, it must be paid into the scheme.
• Within 14 days of receiving the deposit, the landlord must give the tenant certain prescribed information about the scheme being used and the tenancy.
• At the end of the tenancy, if landlord and tenant agree about how the deposit should be divided, they tell the scheme which will return the deposit divided as agreed.
• If there is a dispute, the scheme will hold the deposit until the dispute is de-iced by ADR or the courts.
• Interest accrued is used to pay for the running of the scheme, with any surplus being paid to the tenant (or the landlord if the tenant is not entitled to any money back).

Insurance-based schemes:-

• The tenant pays the deposit to the landlord.
• The landlord retains the deposit but pays a premium to the insurer.
• Within 14 days of receiving the deposit, the landlord must give the tenant certain prescribed information about the scheme being used and the tenancy.
• At the end of the tenancy, if landlord and tenant agree about how the deposit should be divided, the landlord returns all or part of the deposit as agreed.
• If there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.
• If for any reason the landlord fails to comply, the insurance arrangements will ensure that the deposit is returned to the tenant if they are entitled to it.

What happens if there is a dispute?

Each scheme will contain an Alternative Dispute Resolution service which is free to both landlord and tenant. If a dispute occurs, and both landlord and tenant agree to use ADR, they will also agree to be bound by its decision with no recourse to the courts.

A dispute will only go to court if the parties cannot agree to use ADR.

Who runs the scheme?

The custodial scheme is run by the Deposit Protection Service (DPS) and is the only custodial scheme. Landlords and agents can register and make transactions online by visiting  www.depositprotection.com. There is a dedicated call centre for the scheme and its ADR service on 0870 707 1707.

There are two insurance based schemes:-

• Tenancy Deposit Solutions Limited – is a partnership between the National Landlords Association and Hamilton Fraser Insurance. See www.mydeposits.co.uk
• The Tenancy Deposit Scheme – is run by the Dispute Service Limited and builds on a scheme established in 2003 to provide a dispute resolution and complaints handling service for the letting industry. See www.tds.gb.com.

What happens if a landlord does not protect a deposit?

• Restrictions on possession  - A landlord will be unable to regain possession  of a property by giving notice under section 21 Housing Act 1988 if the deposit has not been safeguarded and notice given to the tenant.
• Fine – a tenant can apply to the court for an order requiring the deposit to be safeguarded. Where the court believes that the landlord has failed to comply or the deposit is not held in an authorised scheme, the court must either order the landlord to repay the deposit with 14 days or to pay it to the custodial scheme administrator.  The court must also order the landlord to pay the tenant a fine of three times the amount of the deposit within 14 days.

Eviction

Problem tenants

No matter how careful you are, there will sometimes be occasions when things go wrong.  Tenants can lose jobs and rent sometimes falls into arrears.  This may not necessarily be the tenant's fault.  Worse, tenants may breach other terms of their agreement, for example by damaging the property or by the way they use it.  While the situation may or may not be the tenant's fault, it is a big problem for the landlord, who of course may have his own outgoings, including loan finance payments, to meet.

In these circumstances a landlord needs to understand what he can and cannot do to remedy the situation. 

Unlawful eviction

The first and most important thing to understand is that a landlord cannot simply throw a tenant out on the street or change the locks.  This is sometimes called "black bagging".  A residential tenant who refuses to leave willingly can only be evicted by court order.

It is an offence unlawfully to deprive a residential occupier  of his occupation of premises or to attempt to do so.  It is a defence to show that the landlord believed, with reasonable cause, that the occupier had ceased to reside in the premises.  Thus, evicting a tenant without a court order is unlawful.  It can result in both prosecution in the criminal courts and a claim for damages by the tenant.   The damages awarded can be very high, being calculated on the difference between the market value of the property if it were sold with vacant possession and its value if it were sold subject to the tenancy (Housing Act 1988, section 28). 

The only exceptions to the rule about obtaining a court order are:-

• If a landlord shares occupation with the tenant;
• If the occupier has failed to vacate a property let for holiday purposes;
• If the accommodation is available to the tenant rent free; or 
• If the accommodation is in certain types of residential hostel. 

Where a person who is not a tenant occupies premises as a licensee, reasonable notice is required to force him to leave.  This is generally interpreted as being 4 weeks' notice.

Harassment

It is an offence to do acts likely to interfere with the peace or comfort of a residential occupier or members of his household, or to withdraw or withhold services reasonably required for occupation of the property as a residence if this is done with the intention of causing the occupier:-

• To give up occupation of the property; or
• To refrain from exercising any right or pursuing any remedy in respect of the premises.

This activity is generally called "harassment".

Examples are:-

• Cutting off services, such as water, gas or electricity.
• Threats or abuse.
• Making the premises less habitable, e.g. removing windows, doors or locks.

How to get it right

In order to obtain an court order, proceedings must be commenced in the County Court local to the property.  Before court proceedings can begin however, the tenant must be served with notice of the landlord’s intention to start the process that may ultimately lead to him having to give up possession. 

There are two routes open to a landlord who lets a property on an assured shorthold tenancy, but only one where the tenancy is an assured tenancy.

Assured shorthold tenancy only - notice requiring possession (section 21 notice)

A landlord can end an assured shorthold tenancy by serving on the tenant a notice requiring possession of the property under section 21 of the Housing Act 1988.  Lawyers commonly call this a section 21 notice.

In simple terms the notice must give the tenant at least two months' notice that the landlord requires possession of the property.  A section 21 notice can be served at any time after the creation of the tenancy.

But, if a section 21 notice is served with an expiry date which is earlier than the last day of the fixed term of the tenancy, the court will not allow the landlord to recover possession until the fixed term has ended.

There are two different types of notice.  It is important to use the right one or a possession action will probably fail.  These are the rules:-

• Where there is a fixed term and the notice is served on or before the last day of the fixed term, the notice must be given under section 21(1) of the Housing Act 1988.
• Where there is a fixed term and the notice is served after the fixed term has expired, the notice must be given under section 21(4) of the 1988 Act.
• Where there is no fixed term, the notice is also under section 21(4).

Examples of both types of notice can be found in   Forms.

There is one important rule to know when notice is being given under section 21(4).  This is that the notice must expire on the last day of a period of the tenancy. This means that if the tenancy runs from say, the 15^th of one month to 14^th of the next, the notice must expire on the 14^th of the month, but at least 2 clear calendar months in the future. Depending on the date of service, this can mean that in practice the actual notice period is more than 2 months.  It requires considerable care to get this type of notice right.  If the notice is wrong, it will be invalid and the court will not make a possession order.

It is easy to make a mistake and specify the wrong date in the notice.  Note however the following words at the end of the section 21(4) notice in   Forms:-

"...or on the day on which a period of your tenancy next expires after the end of two months from the date of service of this notice"

They look odd and they are odd.  What they do is cure any slight error made by the landlord as to the date mentioned in the section 21(4) notice.   Of course they may not cure a blatant error in the date mentioned in the notice.

It is advisable for a section 21 notice to contain the wording set out under the heading "Information for Tenant(s)".  If it does not, it may be ruled invalid by the court and any proceedings based upon it will then fail.

Both types of tenancy - notice seeking possession (section 8 notice)

This notice can be served on a tenant who has either an assured shorthold tenancy or an assured tenancy.  It is served under section 8 of the Housing Act 1988 and is commonly called a section 8 notice.

This notice does not rely on the fact that the tenancy has or will shortly come to an end due to time passing, but upon one or more of 16 "grounds for possession" contained in the Housing Act 1988. Reliance upon these grounds is the only way a landlord can recover possession in the case of an assured tenancy if the tenant refuses to leave voluntarily. The full text of all of the grounds are set out in   Forms. 

The most commonly used of these grounds are those relating to rent. They are grounds  8, 10 and 11. Of these, only ground 8 will, if the rent arrears are proved to the court, guarantee that you will get a possession order. This is known as a mandatory ground for possession. The other two rent based grounds will allow the court to make a suspended possession order (more of which later) if it feels it is just to do so. These are known as discretionary grounds for possession. The full text of the 16 grounds says which grounds are mandatory and which are discretionary.

The wording of the section 8 notice is very important. An example of this notice can be found in   Forms.  The grounds themselves set out the periods of notice required by each ground before court proceedings for possession of the property can start.  Some grounds need 2 months' notice, but each of the rent grounds only requires 2 weeks' notice.

It is also very important that the FULL TEXT  (exactly as set out in the Act) of each ground relied upon is included in the notice and that a brief explanation is given as why the ground is relied upon.

In   Forms there is a blank form of section 8 notice and an example of how that form might be used in a typical rent arrears case.  If using that version, do not forget to tailor it to the facts of the actual case.  The arrears figures in the form are examples only.

Which to use?

In "bad tenant" cases, there can be finely balanced decisions to be made as to which is the best type of notice to use.  Appropriate professional advice is desirable.

Service of the notice

Where there is more than one tenant, every notice to be served must be served on each of them individually.

While there is normally no requirement for a notice to be served personally (as opposed to by post), personal service is advisable.  Otherwise the tenant may claim that he did not receive the notice.

Which ever method of service is used, the landlord should keep an accurate, written record of how, when and where service was effected in case the tenant disputes service.

Court Proceedings

If, after the notices are served the tenant still refuses to leave, the landlord will have to commence court proceedings for possession.

There are two ways this can be done.

• If the claim for possession is based on a section 21 notice, you can use the accelerated possession procedure. This is usually dealt with by the court on paper, unless the tenant shows that there is a defence to your claim, which in these cases is quite rare.
• If the claim is based on a section 8 notice, there must be a court hearing.  After issue of the proceedings, the court will fix a date for a first hearing. This is usually about 6 to 8 weeks after the date of issue. If there are no disputes about, for example, the level of rent arrears, the court can make a possession order at that first hearing.

If however, the tenant can show that there is a dispute, the case is likely to be adjourned to a later date to allow more time for the dispute to be examined by the court and usually for the parties to provide further evidence.

Although accelerated possession proceedings are quicker in themselves, they will usually only take place after the expiry of a 2 month notice. Section 8 proceedings take longer from start to finish, but may begin as soon as 2 weeks after the notice is served. Overall, there can be very little difference in terms of timing between the two routes.

The main advantage of section 8 proceedings is that as well as asking the court to give possession of the property to the landlord, a county court judgement for any outstanding arrears can also be sought.

Possession orders

Where proceedings are based on a section 8 notice, there are two possible types of possession order that a court can make.

Firstly, a final possession order.  This is the order that the court will make if the claim is based on a mandatory ground.  The usual order is that the tenant give possession of the property to the landlord within 14 days.   The court has power to lay down a longer period of up to 42 days.

Secondly, a suspended possession order (SPO). This is an order where the court will give possession to the landlord, but suspend that possession actually taking place unless or until the tenant breaches certain terms ordered by the court.  For example, the most common SPO is where rent is in arrears but the landlord has not relied on a mandatory ground. The court may order that possession be suspended upon payment by the tenant of the rent each month (if that is the term) PLUS a sum towards the outstanding arrears. Under this order, the tenant will be allowed to remain in the property provided he sticks to the terms of the order.

 If the order is breached, however, the landlord can apply for a possession warrant (where the bailiffs will evict the tenant – more of which below) without having to go back to see a judge.

The SPO can be a powerful tool in recovering rent from a tenant who has fallen behind but is otherwise a good tenant.

Adjournments

A tactic often employed by tenants in court proceedings based on rent arrears in particular is to ask the court to adjourn the hearing on the first occasion.  Where a landlord’s claim is based on discretionary grounds (such as grounds 10 and 11) the court can often be persuaded to adjourn proceedings.

This is particularly so where a tenant says that he has applied for housing benefit but that the claim has not yet been processed.  In those circumstances the court will often allow the tenant the benefit of the doubt in the hope that the housing benefit claim will clear some or all of the arrears before the matter next comes before the court.  This can be annoying and costly for a landlord and may sometimes be avoided if the tenant has a history of persuading the court to adjourn but not coming up with the rent during the period of the adjournment.

Enforcing a possession order 

Even having obtained a possession order from the court, a landlord cannot simply take it upon himself to evict the tenant.  He must apply to the court for a possession warrant.  This will lead to the court bailiffs setting a date for the eviction and ultimately removing the tenant if he refuses to leave voluntarily by the date of the eviction.  It is unlawful for a landlord to take steps to enforce the possession order himself. 

Once a date for eviction is fixed, the landlord will need to notify the bailiff at least 5 days before the date for eviction if the landlord thinks that assistance from the police will be needed.  If no police assistance is needed, the landlord will need to confirm with the bailiffs that the eviction will still go ahead on that date no less than 3 days before the eviction.

On a practical level, the landlord will need to ensure that he has a locksmith available so that entry into the property can be forced if the tenant refuses to open the door and so that the locks throughout the property can be changed once the tenant is evicted.  If the landlord himself cannot attend, it is useful for somebody with authority to give instructions to the bailiff to be there in case the tenant makes any acceptable last minute offers that would avoid the eviction.

Application to suspend warrant of possession

Even at this late stage, and where an eviction date has been fixed, a tenant can still make an application to the court for an order suspending the possession warrant.  Where a possession order was made based on a discretionary ground, the court can in effect reconsider the decision of the original judge and order that the possession warrant be suspended.  This can happen if, for example, the tenant has now obtained money to pay off the rent arrears which he did not have at the time of the original hearing. 

If however a possession order is made following the accelerated procedure or on a mandatory ground, the court will not have discretion to suspend.  Applications made in these circumstances are at best annoying and at worst expensive for a landlord.

In any event the hearing to deal with the tenant’s application will be dealt with urgently by the court and obviously before the date for the eviction.  It is quite common for tenants to make applications at the last minute and for the application to suspend to be dealt with by the court the day before the date fixed for the eviction.  If the application fails however the eviction will proceed as normal.

Ten top tips

Grant the tenancy in writing

There are no hard and fast rules about how to create a tenancy.  It can be as simple as agreeing a rent and handing the keys to the tenant.  However it is best to have a written agreement as this will set out the terms agreed between the landlord and the tenant and can avoid problems at a later stage.  The lack of a written tenancy agreement will probably mean you cannot evict a defaulting tenant during any initial fixed term of an assured shorthold tenancy.

Use a good tenancy agreement

A properly drawn tenancy agreement will comprehensively set out the obligations of the parties and will deal with more than just the rent and the length of the term.   See Forms for a specimen tenancy agreement.   It is essential to make sure that the form of agreement which in the end you decide to use accurately meets your own particular requirements.  Ensure that the agreement gives you the right to require rent to be paid by standing order.

Choose your tenant carefully

Carefully selecting the people to whom you let your property is one of the best ways to avoid things going wrong later on.  How choosy you can be will of course depend on the market you are aiming at.

Take up references

Insist on references from previous landlords and the tenant’s bank.  If the tenant supplies names and addressees of referees, make a point of taking up the references. Credit searches are commercially available from companies such as Experian and Equifax and can provide a guide to a potential tenant’s credit history.

Plan in advance

It is a good idea to list in advance your criteria for vetting applicants for tenancies.  Take care however not to exclude people on the grounds of race, disability or gender because this is illegal.

Keep good records

It is a good idea to keep careful records of all information provided by a tenant in an application for a tenancy, as the Housing Act 1996 introduced a new ground (ground 17) which protects landlords against false or misleading information provided by a tenant.  This can then be used by a landlord to seek possession of a property if it is apparent that a tenant has obtained the property by providing such false or misleading information.

Guarantors

In some cases you may have concerns about a tenant’s ability to pay the rent, or you may just want some security if a tenant loses their job and cannot pay.  It is possible therefore to ask a tenant to provide a guarantor.  This person will need to sign a form in which they agree to be responsible for any rent arrears (or other sums due) if they are not paid by the tenant and to guarantee that the tenant will perform his other tenancy obligations.  A specimen form of guarantee agreement is set out in Forms.

Inventories

In order to ensure that there is no disagreement about any furniture or fixtures and fittings in the property to be let, always prepare an inventory and get the tenant to sign it.

Deposits

It is also beneficial to ask the tenant to pay a deposit at the beginning of the tenancy to cover cleaning, damage or breakages that might occur during the tenancy.  It is usual to ask for one month’s rent although you should take care not to ask for more than 7 weeks' rent as this could give rise to difficulties related to tenancies known as premium leases.  The deposit will remain the property of the tenant throughout the tenancy.  The landlord must comply with the tenancy deposit protection scheme which aims to protect tenants.  There is a dispute resolution procedure as part of the scheme.  Landlords failing to comply with the scheme suffer serious disadvantages.

Keep the grass short

Finally don't ever let the grass grow under your feet.  If the rent is not paid, chase immediately.  React immediately to any other problems with the tenant.  They will always get worse not better and the sooner problems are tackled the better.

Forms

The specimen forms listed are available on our website from free download.

Specimen Forms

Files are offered in Word or PDF.  To use PDF documents you must have Adobe Reader installed on your PC

Assured shorthold tenancy agreement
Section 21(1) notice (notice requiring possession served up to expiry of fixed term of assured shorthold tenancy)
Section 21(4) notice  (notice requiring possession served after expiry of fixed term of assured shorthold tenancy)
Section 8 notice (blank form)
Section 8 notice (example of a form partially completed for a rent arrears case)
Grounds for possession, assured tenancies
Section 13 notice (notice proposing increase in rent)
Guarantee agreement
Rent standing order (monthly rent)

Guarantee agreement

• All details must be clearly and accurately completed.
• The agreement can be executed before or at the same time as the tenancy agreement but is not designed to be executed after the tenancy has been granted.
• The guarantor should be given an exact copy of the proposed tenancy agreement with all details completed other than the date of grant.  The landlord should ask the guarantor to sign a receipt on identical copy and return it to the landlord.  The landlord should keep this as a record.
• The guarantor must sign the guarantee agreement in the box at the end and his signature must be witnessed.  The witness must be present when the document is signed and sign it himself (and add his address) in the space provided.
• The landlord should keep the original signed guarantee agreement.   A copy can of course be given to the guarantor.
• If the above steps are not followed, the guarantee may be invalid.
• Note that under the form provided the guarantor is liable only for as long as the tenancy lasts.  Termination during any initial fixed period would release the guarantor.  This may be an issue in student lettings where re-letting during the academic year may be a problem.

Rent standing order

• This is a standing order for payment of monthly rent.  A standing order for weekly rent is unlikely to be acceptable to the banks.
• If you receive rent by standing order, be sure to check your account soon after the payment date so that you detect any non-payment early.

About Young&Pearce

For more information about Young&Pearce call us on 0115 959 8888 or visit our website at www.youngandpearce.com.