Residential Buy to Let Landlords Administration of Estates What you need to know Many people invest in a buy to let property as part of their portfolio of investments. The law and procedure in relation to landlord and tenant matters is complex and unless closely followed, the value of the investment could be diminished. There are traps for the unwary landlord. In order to protect the investment, specialist legal property advice can be invaluable. Key Terms Explained Assured Shorthold Tenancy This is a written contract between the landlord and the tenant which contains the terms and conditions of the arrangement. It is the most common form of tenancy agreement and it will invariably provide for an initial fixed term of either six months or twelve months. It is important to avoid using any off the shelf agreement which may not meet all the landlord s needs. Bespoke drafting of special provisions should be considered. These include for example a clause relating to ending the tenancy before the term expires, known as a break clause or a clause that confirms the tenant s acceptance that the property is in good repair at the start of the tenancy. Deposit Certificate The deposit certificate is an information form which the landlord must provide to the tenant. It confirms the deposit has been registered as a protected deposit. The deposit must be protected with one of the three Government authorised deposit protection schemes operated by TDS, DPS and My-deposits Agencies. The deposit has to be registered within the requisite timeframe. Once registered, these agencies will issue a certificate which will record information about the deposit including when the deposit was protected and with whom it is registered. If a landlord does not register the deposit on time, a tenant can bring a claim for compensation AND the landlord could be at a disadvantage when trying to recover possession of the property Prescribed Information Form This form contains information about the landlord and the deposit. The landlord must provide this form to the tenant. Failure to provide all of the requisite information and to serve it within the timeframe will have adverse consequences in relation to possession recovery. Section 8 and Section 21 Notices These sections refer to the Housing Act 1988 and are written notices which a landlord must serve on the tenant as a preliminary step before court eviction proceedings can be brought. An eviction order cannot be obtained against a tenant unless one of these notices has been served. April 2016
Possession Order Commonly referred to as an eviction order, this is a court order which is required to allow a landlord to legally remove a tenant or trespasser from the property. Guarantor Agreement This is a written contract between the landlord and the person or business providing the guarantee on behalf of the tenant. It is a legally binding promise by the guarantor to indemnify the landlord in full in respect of all losses suffered by the landlord in the event of the tenant failing to pay the rent or damaging the property. This agreement enables the landlord to bring a claim to court against the guarantor for rent arrears, compensation, expenses and costs. A common example of this, is where a parent of a student stands as a guarantor for the student which will render the parent personally liable for any rent arrears or damage arising from the student s breach of the tenancy agreement. Rent Arrears A failure by the tenant to pay the contractual rent on time is a fundamental breach of the tenancy agreement and the landlord can bring a claim to court to recover the arrears no matter how modest the amount of the arrears. The landlord can also apply to the court for an eviction order based on rent arrears provided the arrears amount to at least two months outstanding rent and provided also that the arrears existed at different stages of the court process. It is also possible to apply to the court for a possession order based on persistent rent failure. Deregulation Act 2015 This Act has been introduced partly to prevent unscrupulous landlords from being able to evict a tenant too quickly. In the context of eviction procedure, the legislation means that it has become more difficult to obtain a possession order using the section 21 accelerated procedure. Trespasser A trespasser is a person entering or occupying someone's land or property without permission. The difference between a trespasser and a tenant is that at the commencement of the occupation the tenant has the landlord s permission to enter or occupy, a trespasser does not. A common situation where a landlord may find there is a trespasser in occupation is where the tenant moves in a friend without the landlord s knowledge.
Issues for a Landlord Rent Arrears A tenant sub-letting the property without the landlord s knowledge or consent. Anti-social behaviour by the tenant incurring issues with neighbours and the management company. A tenant causing damage to the property Tenants including trespassers bringing a claim for injury suffered. Tenants bringing a claim for compensation for alleged disrepair Following the Deregulation Act, there will be greater pressure and responsibility on landlords to respond to requests and complaints from tenants to carry out improvements and repairs. Remedies Possession order A landlord can issue proceedings to obtain a court possession order requiring the tenant or trespasser to vacate the property either forthwith or within the usual 14 day period. The court may grant an extended period because of exceptional hardship but this is invariably a very short period of an additional 14 days. Claim the deposit This claim is largely an administrative one and should be brought to the relevant Government Agent, such as DPS,TDS or My-deposit, which holds the deposit. Often this form of security is insufficient to cover the rent arrears and compensation for any damage suffered. Claim against the tenant for rent or compensation - If there is a personal guarantor then the guarantor should be notified immediately of a possible claim and, if necessary, a claim should be brought against both the former tenant and the personal guarantor at the same time. In the absence of a personal guarantor recovery can be very difficult. When the tenant vacates, the problem becomes one of identifying the tenant s whereabouts and assessing whether it is a cost effective exercise to pursue the tenant.
Injunctive relief to prevent misconduct If the tenant or trespasser is engaged in antisocial or nuisance behaviour, a landlord can apply to the court for an injunction. This is a court order preventing such behaviour from continuing. Any breach of the injunction may result in the tenant s committal to prison. As this is an expensive route and may not provide a permanent solution, applying to the court for an eviction order is generally the preferred remedy. Order for access to inspect The tenant or trespasser may prevent the landlord from having access for essential repairs to be done or for the annual gas inspection and other such checks to be carried out. An application to the court can be made for an order granting access. Again, an expensive option and it is generally more economical to apply to court for an order to evict the tenant. Possession Proceedings The 2 main procedures relating to recovering possession against tenants are; Section 8 Housing Act 1988 Section 21 Housing Act 1988 Section 8 possession procedure Section 8 procedure is used to apply to the court for a possession order where a tenant has breached the terms of the tenancy agreement during the initial fixed term of the tenancy. Examples of this would be a failure to pay rent on time or a breach of some other term of the agreement. In order to rely on section 8, the landlord has to show one of the grounds set out in the Housing Act ( e.g. two months rent arrears ) but unless the arrears existed at different stages of the court process or the tenant persistently failed to pay rent then there is no guarantee of obtaining an order for possession. Whilst the preliminary section 8 notice which must be given to the tenant is between two weeks and two months notice depending on the ground used ( two weeks for rent arrears ), the court process can be a lengthy one which is often the case where the tenant raises a counterclaim for repairs and compensation or disputes the amount of the landlord s rent arrears claim. In these circumstances, the court will order the parties to follow court directions relating to disclosure of documents and exchange of witness statements and list the matter for a final hearing. This could be a protracted and expensive process.
Section 21 accelerated possession procedure Prior to the recent introduction of the Deregulation Act, this was the preferred option in the majority of cases, where the initial fixed term of the tenancy had expired. It was a quick procedure as there was no need for court directions or a hearing in the vast majority of cases. Moreover, there was no need to prove a ground existed, such as rent arrears or some other breach of the tenancy agreement. However, there are strict procedures to follow and failure to comply with the technical requirements could prevent success. Mistakes relating to the content of a section 21 notice, to time limits for protection of the deposit and the service of the prescribed information could affect the success of the claim. The Deregulation Act will, in some cases, slow down the section 21 procedure. Trespassers There is a different procedure to follow in the case of a trespasser. Court proceedings will need to be issued. There are strict rules to follow for service of the court papers. These must be either fixed to the door or to a stake in the garden. Using the ordinary postal service is not sufficient. If the name of the trespasser is unknown, the documents must be issued in the name of any other occupier.
Why Use Linder Myers We have a team of dedicated lawyers specialising in property litigation. We can provide advice and assistance in relation to the drafting of tenancy agreements, guarantor agreements and preparation of legal notices along with full representation at court to obtain a possession order. Our team has experience in dealing with cases at Court of Appeal and Supreme Court level. We are panel members of a national and international insurer which appoint us to advise and represent their landlord clients as well as instruct us to advise on a whole range of property matters. Our clients include companies as well as Management Agents and letting agents in addition to single owner landlords. We are committed to delivering the very best possible service at a competitive price. We work closely with clients to take the strain out of the legal process. Distance is not an issue as we offer a number of ways you can appoint us including a postal service, email service, telephone service, Skype or Face time and face to face meetings. Contact Linder Myers place your trust in a specialist lawyer. April 2016