Option for a second 12 months - no possession possible?

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    Option for a second 12 months - no possession possible?

    Hi
    I have a tenant on an AST for a 12 month term with an option to stay for a further 12 months. Can you tell me if I can gain possession under a section 8 ground 1 on the ending of the first 12 month term or must I let the tenant stay a further 12 months if they want to?
    Patricia

    #2
    Originally posted by Patricialouise View Post
    Hi
    I have a tenant on an AST for a 12 month term with an option to stay for a further 12 months. Can you tell me if I can gain possession under a section 8 ground 1 on the ending of the first 12 month term or must I let the tenant stay a further 12 months if they want to?
    Patricia
    Section 8 possessions are not dependant on any fixed term, so providing you gave them the necessary notification before the commencement of the tenancy than you can apply to the court for possession 2 months (for g1) after the service of the relevant s8 notice.

    Comment


      #3
      Thanks

      Hi
      thanks for the response. I think I've seen an answer on here that the s.8 ground 1 cannot be used till the end of the fixed term so the real question is whether the "option" for the second year is part of the fixed term or whether I can issue the section 8 using gr 1 to expire on the date the first 12 months completes? and if s.8 gr 1 cannot be used in the fixed term then I guess I'm confused as to why its there at all as if I need t wait to the end of the fixed term then wouldn't I just issue a s.21 notice?
      Patricia
      Last edited by Patricialouise; 07-07-2010, 09:08 AM. Reason: addition

      Comment


        #4
        Ground 1 or not, the point is that it is the contract between the parties that prevails. There are effectively two contracts here. The first is the one that granted the tenancy. The second is the one that allows the tenant to go for another fixed term tenancy if he chooses. So, although the second tenancy would not be part of the original term and is contingent on the tenant exercising the option, if he does so you will not be able to get him out using ground 1.

        Comment


          #5
          Hi
          Thanks for the response. The option states:
          "Option to renew for a second year with any rent increase in line with RPI minimum 2% and maximum 5%".

          Given that it does not specify that the option is solely in the tenants determination then can it not be argued that the contract is providing the terms for any rent increase, if the renewal is agreed, and not that the tenant can decide without he landlords agreement ?

          If however the tenant can decide in their sole option then can you tell me how and when a S.8 gr 1 can be used and why its any different to a s.21 ending of shorthold?

          Patricia

          Comment


            #6
            An option that needed both parties' agreement would not be an option. Theoretically you can have an option by which a landlord can require a tenant to take a lease, but I have never come across it in practice. This therefore has to be a tenant's option. The wording is woefully inadequate as it does not say how the option is to be exercised, but I do not think that on that account the option is void for uncertainty. The clause certainly cannot be construed as an agreement as to what the rent should be after the fixed term comes to an end because that would mean the agreement is fixing something that lies outside its terms; you cannot have an agreement for a fixed term and provide for what happens after the term has ended without at the same time providing for the term to continue.

            Comment


              #7
              New problem: if T has option to renew, and renewal Tenancy Agreement (for year2) is on same basis as original (for year1), it too will contain an option (for year3) and so on. That would be a perpetually-renewable lease, giving T a 2000yr. term!! [Yes, really: Law of Property Act 1922].

              I will post a link to my analysis of the 1922 Act's effects, once I've prepared it.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Originally posted by jeffrey View Post
                New problem: if T has option to renew, and renewal Tenancy Agreement (for year2) is on same basis as original (for year1), it too will contain an option (for year3) and so on. That would be a perpetually-renewable lease, giving T a 2000yr. term!! [Yes, really: Law of Property Act 1922].

                I will post a link to my analysis of the 1922 Act's effects, once I've prepared it.
                I didn't want to alarm the OP.

                Comment


                  #9
                  Originally posted by jeffrey View Post
                  New problem: if T has option to renew, and renewal Tenancy Agreement (for year2) is on same basis as original (for year1), it too will contain an option (for year3) and so on. That would be a perpetually-renewable lease, giving T a 2000yr. term!! [Yes, really: Law of Property Act 1922].

                  I will post a link to my analysis of the 1922 Act's effects, once I've prepared it.
                  Unless, if drafted smartly (although no smart lawyer would advise including a renewal option in my view), the renewed agreement would be on the original terms minus the renewal option.

                  Comment


                    #10
                    Originally posted by dominic View Post
                    Unless, if drafted smartly (although no smart lawyer would advise including a renewal option in my view), the renewed agreement would be on the original terms minus the renewal option.
                    I agree. The option clause cited above seems very abbreviated, too.
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

                    Comment


                      #11
                      A perpetually renewal lease can easily be avoided by including an appropriate formula such as: The terms of the new lease (except as to rent) being on the same terms as this lease but excluding the option to take a new lease.

                      Comment


                        #12
                        Originally posted by Lawcruncher View Post
                        A perpetually renewal lease can easily be avoided by including an appropriate formula such as: The terms of the new lease (except as to rent) being on the same terms as this lease but excluding the option to take a new lease.
                        Or even:
                        If that option is exercised, the new lease is to include the contents of this lease but exclude:
                        a. the amount of rent (which instead shall be £abc); and
                        b. the option to renew.
                        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                        4. *- Contact info: click on my name (blue-highlight link).

                        Comment


                          #13
                          The language says "option to renew for SECOND year" - so I guess there can only be one second year if it is is renewal and the next year would be the third year.

                          Thanks for everybody's comments. Very helpful although nobody seemed to answer how a section 8 gr 1 can be used or why it would be used in preference to a section 21.

                          Patricia

                          Comment


                            #14
                            Originally posted by Patricialouise View Post
                            The language says "option to renew for SECOND year" - so I guess there can only be one second year if it is is renewal and the next year would be the third year.
                            I do not agree. The year2 renewal would be for one year, it would include a renewal option for year3 (= its own year2), and so on!
                            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                            4. *- Contact info: click on my name (blue-highlight link).

                            Comment


                              #15
                              Originally posted by jeffrey View Post
                              I do not agree. The year2 renewal would be for one year, it would include a renewal option for year3 (= its own year2), and so on!
                              Yes, it would be better if it was to be an option to extend and not renew, as then the year 2 would be an absolute rather than relative anchor.

                              Comment

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