Common-law contractual tenancy: procedure on new let

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Common-law contractual tenancy: procedure on new let

    Hello everyone. My property is empty and I have been recommended to let to a company which places vulnerable adults into residential property with full time carers (working on a shift basis). As a company let I realise this would have to be a common law tenancy. I would be very grateful for any advice as to the fundamental differences between an AST and a Common Law tenancy. What if the rent is not paid - is there an equivalent of a Section 8? Also end of fixed term - a version of a section 21? Does anyone have any experience of companies such as this? All advice gratefully received. Many thanks.
    Unshackled by the chains of idle vanity, A modest manatee, that's me

    #2
    The common law tenancy is a non-housing act 1988 tenancy. Different rules for possession apply; you do not use a section 21, or section 8 route.

    For a fixed period tenancy;LL or tenant do not need to give notice. It ends automatically.

    Periodic tenancies require a prescribed 'Notice to quit' to be served. Even if your agreement says otherwise, the Protection from Eviction act 1977 requires at least 4 weeks notice. If the agreement says more notice is required then it must be adhered to.

    Needless to say; a court order is required to remove tenants. The actual occupiers are licencees. The company is the tenant.

    Companies often have their own tenancy agreements that they like to use; the wisest route would be to have a lawyer check it out. They often like options to renew too; so watch out for the potential length this property will be tied up.

    The unfair terms in consumer contracts regulations do not include companies; so you could potentially use terms otherwise considered unfair in a usual AST.
    All posts in good faith, but do not rely on them

    * * * * * ** * * * * * * * * * * * *

    You can search the forums here:

    Comment


      #3
      Common Law Tenancy

      If you take a deposit and it comes under a Common Law Tenancy does the deposit have to be covered by a Tenancy Deposit Scheme?

      Comment


        #4
        Originally posted by Probert31 View Post
        If you take a deposit and it comes under a Common Law Tenancy does the deposit have to be covered by a Tenancy Deposit Scheme?
        No. Deposit Protection Schemes apply only to ASTs.
        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


          #5
          Non-1988 Act contractual tenancy

          Hi

          I am about to sign a Bare Contractual tenancy with my tenant as the rent is £2600 p/m (LHA rent) (£31,000 p/a) a normal AST is not suffice, however I have little knowledge of this type of agreement.

          Does anyone know where one can be otbained how such a tenancy can be terminated etc.

          Many thanks

          Shaf Butt

          Comment


            #6
            The Agreement format is identical to AST but without all references to 1988 Act and its sections. Termination procedures are common-law, contractual, i.e. treat Agreement's contents as applying literally; no continuation rights; T must leave on term expiry. However, PEA 1977 applies nevertheless- so Court Order needed and no forcible eviction otherwise.
            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


              #7
              Thanks

              Thanks for a quick repsonse Jeffrey ! 1 further question, what is the minimum term of such an agreement and if no notice is required for possesion when can I apply for possesion at the courts and which form would I require.

              Many thanks

              Shaf

              Comment


                #8
                1. There's no minimum nor any statutory grounds for possession; that's what I meant by 'literally'.
                2. As soon as fixed term expires, T has to leave; if T stays, apply AT ONCE for a common-law Possession Order.
                3. DO NOT ACCEPT FURTHER RENT after term expiry, as that might inadvertently create a new letting.
                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


                  #9
                  Further to the OP, and the replies regarding a non AST contract, if the tenant does stay past the initial term in the case of an AST it then goes to a periodic tenancy, and the tenant has to give one months notice. With a non AST contract is that the same or can the tenant leave at any time. The reason for asking is I have a tenant who's initial term expired the 15th August, I gave two months notice in July for them to vacate on the 15th September, they have then told me today that they are leaving the 30th August and are only paying rent up until then.
                  Any help would be appreciated.

                  Comment


                    #10
                    Common Law Tenancy - Break Clause and Deposit

                    I am just about to break a two year contract I entered into a year ago and trying to figure out my liability to compensate landlord and letting agent.

                    The rent is £3,250 per month so common law tenancy drawn up by agents (one of the largest letting agent chains) with term from September 2007 to September 2009. I made clear I wanted a break clause in case and they agreed to insert the following:

                    "8.4 The Tenancy may be terminated at any time after the first 6 months of the fixed period has elapsed by either party by serving one month's written notice upon the other".

                    We are now 12 months into the contract and I want to exercise my right to terminate effectively leaving 11 months remaining (I plan to in the next week or two assuming things go through on house I am buying).

                    However, there is also the standard clause relating to the deposit:

                    "5.3 The Landlord or [agent] may deduct from the Deposit at the determination or sooner termination of the Tenancy any commission fees lost by agent as published in agents terms and conditions or any reasonable costs incurred by agent or Landlord through the early termination of the Tenancy by the Tenant."

                    Not sure what I was thinking when I signed this as my intention as discussed with agent and landlord was that if I wanted to leave I could at no expense. However, on first reading sounds like I could be on the hook for a lot of money - one-off costs of letting again, agents management commisison (10%?) for remaining 11 months or even the rent? Of course the agent never mentioned this discussing the break clause.

                    Looking at example elswhere I think the break clause should have explicitly mentioned that my financial liability would end but I wasn't on the ball enough to have this inserted.

                    Am I right to be concerned or does legally the break clause free me of any responsibility under 5.3?

                    Any advice much appreciated.

                    Comment


                      #11
                      As it's a tenancy at common law then what it states in the tenancy agreement is legally enforceable. You will have to ask the agent what expense you are likely to incur.

                      It says that costs will be deducted from your deposit which I assume is at least one months rent. Note it also states that they will be in line with the agents terms and conditions, a copy of which you need to obtain.

                      The break clause frees you of nothing! The agent is saying that as it will lose fees (from the landlord probably) if you determine early then they want to ensure somebody (you) is making good their loss.
                      The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                      Comment


                        #12
                        Thanks for the quick reply. I agree with what you say was just hoping that it wasn't that bad! Rather silly mistake on my part. However, I do feel very misled by the agent who quite clearly knew what I wanted when we agreed the break clause.

                        So what is my worst case? Assuming they can't rent it out for 11 months or rent it out via another agent then say 10% of £3,250 times 11 months so £3575 for the agent plus cost to landlord of letting through another agent (50% of first month rent for up front payment?) so £1,625 if same. Total of £4,875 which is more than my deposit of £4,500. Ouch....

                        Best case presumably is if they rent it out straightaway via same agents as same price then just cost of finding new tenant.

                        Comment


                          #13
                          Common Law Tenancy vs. AST- differences?

                          My girlfriend is 4 months into a 12 month lease and is about to give notice and move in with me. There is a 6 month break clause so this should be fine.

                          However I was just reading through her tenancy agreement and I noticed it was a "Common Law Tenancy Agreement".

                          I've searched online but it's not very clear.

                          Is this different to an AST? What are the differences and should it make a difference? She though she had a standard AST as it was through a high street lettings agent. She pays £2123/month as a private tenant and from what I can see CLT's are for properties with a rental greater than this.

                          Thanks

                          Comment


                            #14
                            £2123 p.c.m.= £25 476 p.a.
                            A letting is not within the Housing Act 1988 (so cannot be an AST) if rent > £25 000 p.a. This is why it's described as a common-law tenancy; a better name would be a non-statutory contractual tenancy. Consequence: s.8s.21 procedures do not apply, and the letting operates on the literal wording of the Tenancy Agreement. Similarly, the 'deposit protection' rules do not apply.

                            However, the Protection from Eviction Act 1977 still applies.
                            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
                              Thanks Jeffrey,

                              Ok so now we are just about to take out a new tenancy together which is also above £25,000 per annum.

                              Foxtons are the Agents and the tenancy is just called "The Tenancy". Nothing mentioned about Assured Shorthold or Common Law etc.

                              Is there anything I should look out for? I am only used to dealing with AST's.

                              Thanks again.

                              Comment

                              Latest Activity

                              Collapse

                              Working...
                              X