Section 13 statutory periodic tenancy to licensee

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    Section 13 statutory periodic tenancy to licensee

    Hello Landlords,

    I've recently become a new live-in landlord in a residential HMO property.

    I have taken the property from the previous landlord with the current tenants, who were initially on six month ASTs which have lapsed into statutory periodic tenancies.

    Having attended a landlord accreditation course, I was advised that these contracts should be revised to a licensee contract. This is due to my status as a live-in landlord.

    I have spoken to a number of the tenants who have agreed with the new contract and have signed it, along with a slight increase in rent to bring up the rent to market value.

    One of the tenants has asked that their change in rent does not come into effect this month, rather he is stating a two month notice period is required. Now this is where I'm unsure how to proceed.

    According to Section 13 in the Housing Act 1988, the rent can be increased given a notice period equivalent to the period in the contract, in this case I believe it to be one month, as this is the period of payment in the statutory periodic tenancy.

    I hope this makes sense, I would be grateful if anyone can point me in the right direction.

    Best,
    J

    #2
    Much of the housing act does not apply whereby tenants are excluded occupiers...

    regulatory reform suggests rent cannot be increased more than once every 12 months in AST's FYI! I would be a bit interested in the legal implications of moving into a property as a landlord where tenants have rights reduced. It is something I am not overly familiar with as surely to be able to legally move in T's must be let a room plus a proportion of the rest of the property/ let a room then giving access to communal areas?

    Nevermind Westminster resolved my question! :-D
    [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

    Comment


      #3
      Originally posted by jww View Post
      Hello Landlords,

      I've recently become a new live-in landlord in a residential HMO property.

      I have taken the property from the previous landlord with the current tenants, who were initially on six month ASTs which have lapsed into statutory periodic tenancies.

      Having attended a landlord accreditation course, I was advised that these contracts should be revised to a licensee contract. This is due to my status as a live-in landlord.
      You moving in/them signing new contracts does not change/reduce the tenancy status from AST to licence. You'd have had to be living there at the start of their tenancies.

      One of the tenants has asked that their change in rent does not come into effect this month, rather he is stating a two month notice period is required. Now this is where I'm unsure how to proceed.

      According to Section 13 in the Housing Act 1988, the rent can be increased given a notice period equivalent to the period in the contract, in this case I believe it to be one month, as this is the period of payment in the statutory periodic tenancy.
      If the tenants were licencees (which they're not), Housing Act 1988 wouldn't apply.

      To increase the rent during a periodic AST, you must serve notice in the prescribed form under s.13 (and the notice period is as per s.13(3)) OR you/T can simply sign a new fixed term, no notice or notice period required.

      Comment


        #4
        Thanks Westminster,

        Originally posted by westminster View Post
        You moving in/them signing new contracts does not change/reduce the tenancy status from AST to licence. You'd have had to be living there at the start of their tenancies.
        Just to clarify, is it not possible to change the tenancy from AST to a license through written or verbal agreement with the existing tenants?

        Originally posted by westminster View Post
        To increase the rent during a periodic AST, you must serve notice in the prescribed form under s.13 (and the notice period is as per s.13(3)) OR you/T can simply sign a new fixed term, no notice or notice period required.
        The period of notice to issue a Section 8 or Section 21 is written in the contract as two months. Section 13 3c mentions that for a statutory periodic tenancy, the notice period is equal to the rental period, i.e. one month. The LandlordZONE rent increase article is a little bit vague in this respect, again pointing to s13.3

        Apologies for waffling, this is the first legality I've had to deal with, thanks for your help so far!
        J

        Comment


          #5
          Originally posted by jww View Post
          Just to clarify, is it not possible to change the tenancy from AST to a license through written or verbal agreement with the existing tenants?
          No; the tenancy status is dictated by statute, not by contract.

          The period of notice to issue a Section 8 or Section 21 is written in the contract as two months.
          Again, the notice period for a s.8 or s.21 notice is dictated by statute. In the case of s.8 notices, the notice period varies according to which grounds are used.

          Section 13 3c mentions that for a statutory periodic tenancy, the notice period is equal to the rental period, i.e. one month.
          So that's the minimum notice period. But, as I said, no need to give notice if T/LL agree a new fixed term contract with a higher rent - and you say that a number of tenants have signed new contracts. These contracts are still valid, even if they say they grant a licence, i.e. all the provisions apply such as the length of term, rent payable, etc.

          Comment


            #6
            There seems to be an underlying assumption here that "resident landlord" = "licence". That is not the case.

            The first question to ask is whether the occupation amounts to a tenancy or a licence. It is quite clear that you can have an assured tenancy of a room as the Housing Act 1988 defines a dwelling as a house or part of a house. The commonly held view that a person who takes a room and shares other accommodation must necessarily be a licensee is wrong. Whether the owner resides on the premises is also irrelevant. What is important is whether the occupier has actual exclusive occupation of his room. That is usually, though not always, determined by whether the landlord provides services such as cleaning the room and providing clean linen at regular intervals.

            If there is a tenancy you can go on to ask if the landlord is a resident landlord within the meaning of Paragraph 10 of Schedule 1 to the Housing Act 1988. If he is, then the tenancy is not an assured tenancy and cannot therefore be an assured shorthold tenancy.

            If the occupation is a licence or a tenancy which is not an assured tenancy section 13 of the Housing Act 1988 has no application.

            Comment


              #7
              Offer tenants "new" contract on more attractive terms (lower rent, include TV licence, some sweetener..??). Then, as long as the "new" contract if legit (standard "lodger" deal) surely the "old" ASTs would have been ended and a new "license" then rules the roost??

              In your shoes I'd then leave things for a couple of months then evict those I wanted out..

              Not entirely certain on the legals over this - any other views??
              I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

              Comment


                #8
                It is not quite a rule, but on the whole a tenant can never, even if he wants to, give up one form of occupancy and immediately agree another that gives him less security.

                Comment


                  #9
                  Thanks for taking the time to reply Lawcruncher,

                  Originally posted by Lawcruncher View Post
                  It is not quite a rule, but on the whole a tenant can never, even if he wants to, give up one form of occupancy and immediately agree another that gives him less security.
                  As it stands, the current tenancies were ASTs which have lapsed to statutory periodic tenancies. If I understand correctly, in order to change the contract from an AST to a Licensee I must first issue a section 21 with two months notice.

                  Is issuing a Section 21 in order to change the contract and increase the rent to market rates in the new licensee contract legally sound? I am assuming this is the best way to do so.

                  I don't want to continue with ASTs for the previous tenants and issue a section 13 to increase the rent on their current contracts. I would rather switch to licensee contracts, unless there is a major reason not to.

                  Best,
                  J

                  Comment


                    #10
                    Originally posted by Lawcruncher View Post
                    What is important is whether the occupier has actual exclusive occupation of his room. That is usually, though not always, determined by whether the landlord provides services such as cleaning the room and providing clean linen at regular intervals.
                    The tenants do not have any services provided for their individual rooms, rather all communal areas (kitchen, bathroom, living room) are cleaned weekly.

                    Comment


                      #11
                      If the tenancies are ASTs issuing section 21 notices will not bring then to an end. Without the tenants' cooperation the tenancies will not come to an end until you have obtained an order for possession and the order has been executed.

                      You talk about switching to licences, but it is not just a question of putting in front of the tenants new agreements; you would actually have to change the arrangements to ensure they were genuine licences. It comes down to substance and not form. Whatever you do, there is always going to be doubt because of the difficulty in showing that there has been a real change and the reluctance of a court to accept that change was possible in any event.

                      Comment


                        #12
                        Originally posted by jww View Post
                        As it stands, the current tenancies were ASTs which have lapsed to statutory periodic tenancies. If I understand correctly, in order to change the contract from an AST to a Licensee I must first issue a section 21 with two months notice.

                        Is issuing a Section 21 in order to change the contract and increase the rent to market rates in the new licensee contract legally sound? I am assuming this is the best way to do so.
                        A s.21 notice is just the initial step in evicting a AST tenant. It does not end the tenancy at notice expiry nor oblige the T to vacate, nor does it change the status of the tenancy. It just entitles you to apply for possession after notice expiry.

                        (Have you, BTW, served notice to the tenants under s.48 Landlord and Tenant Act 1987 and s.3 Landlord and Tenant Act 1985, together with a letter of authority from the previous owner/landlord, as you are legally obliged to do when you buy a property subject to a tenancy?)

                        I don't want to continue with ASTs for the previous tenants and issue a section 13 to increase the rent on their current contracts. I would rather switch to licensee contracts, unless there is a major reason not to.
                        As has already been explained, it is statute which dictates the status of the occupier - that's the major reason why you can't just 'switch' to licences.

                        If you click on the link to Schedule 1 Housing Act 1988 posted by lawcruncher in post #6, you will see, in paragraph 10, that a landlord is classed as 'resident' only if he lived in the rental property 'at the time when the tenancy was granted'. You weren't living there when the tenancies were granted, so you are not and never can be a resident landlord (in respect of the existing tenancies) and the tenancies will remain AST tenancies (even if the T would love to have reduced security of tenure and signs a new contract calling itself a licence).

                        Comment


                          #13
                          Originally posted by westminster View Post
                          (Have you, BTW, served notice to the tenants under s.48 Landlord and Tenant Act 1987 and s.3 Landlord and Tenant Act 1985, together with a letter of authority from the previous owner/landlord, as you are legally obliged to do when you buy a property subject to a tenancy?)
                          I have provided the tenants with my address, phone and e-mail. I have not stipulated that this is related to s.48. I am unaware if the previous landlord has issued a letter of authority.

                          Originally posted by westminster View Post
                          the tenancies will remain AST tenancies (even if the T would love to have reduced security of tenure and signs a new contract calling itself a licence).
                          It seems that the best thing to do is keep the AST/statutory periodical tenancy and issue a s.13 notice for the existing tenants. When the existing tenants decide to move on, any new tenants will be signed to the licensee contract.

                          Comment


                            #14
                            Originally posted by jww View Post
                            I have provided the tenants with my address, phone and e-mail. I have not stipulated that this is related to s.48. I am unaware if the previous landlord has issued a letter of authority.
                            That's not enough. Read section 48 LTA1987 and section 3 LTA1985.

                            Comment


                              #15
                              Originally posted by westminster View Post
                              That's not enough. Read section 48 LTA1987 and section 3 LTA1985.
                              I've read through this legislation, and have written a formal letter for each of the tenants.


                              Dear Tenant,

                              I am writing to inform you of the address where rent and service of notices are due, as required by Section 48 of the Landlord and Tenant Act 1987.

                              Rent and service of notices should be addressed to:

                              Full Name
                              Address 1
                              Address 2
                              Postcode

                              Best Regards,
                              (Signed)
                              Landlord


                              From what I understand that covers the legislation. I will send this letter to the existing tenants and incorporate it into the new licensee contracts.

                              Thanks,
                              J

                              Comment

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