Location
These notes are intended to provide a layman’s description of the essence of what the legal requirements are. They should always be used in conjunction with the full text of the Act and any subsequent legal interpretations of it. These interpretations may also change after these notes have been produced. Legal confirmation should always be sought if you are uncertain on any point.
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WHICH TENANCY?
All of the following assumes that this is the first letting of any property between the landlord and tenant. If not, then the terms of the previous letting have to be taken into consideration. For example, a Rent Act 1977 tenant cannot just be given an assured shorthold tenancy with the same landlord.
When the Housing Act 1988 was first introduced, the “default tenancy” was the fully assured tenancy. If a landlord wanted to create an assured shorthold tenancy then a special “section 20 notice” had to be served on the tenant. When the Housing Act 1996 came into force on the 28 February 1997, the default tenancy was switched to the assured shorthold tenancy and, if a fully assured tenancy was required then a notice under Schedule 2A had to be served. This made letting property much less risky as if you got it wrong you were only left with a tenant with a reduced security of tenure.
Over the 30 or so years since the Housing Act 1988 was introduced some of the rules have changed so each will generally need an explanation for a new tenancy and there may be a few differences for tenants who have been in the property for a number of years.
Establish the status of the parties involved
In order to understand if you can use an assured shorthold tenancy there are four basic factors to consider. It can be helpful to look at these as a set of “tests”. If the tenant fails any of the tests, you may not be able to use the assured shorthold tenancy (AST); they must pass all the tests. After the four tests, we explain the different options for letting a property that is not on an AST because it fails even one of the tests.
The Tenant
Is the tenant (or any one of them) a Limited or a Public Limited company? The reason for checking is because a tenant for an AST must be an individual and if any of the joint and several parties making up the tenant is a company they cannot be given an AST. It is also important to ensure that the company sets up a proper agreement with the occupant. Failure to do so may allow the tenant to sublet on an assured tenancy, planning to use ground 16 (former employee) to recover possession. Should the tenancy to the company be ended with the tenant in occupation then the landlord would inherit the assured sub tenant, but would not be eligible for ground 16, a potentially serious problem. It is always important to understand exactly who will be occupying the property.
Is the tenant a Government department? The Landlord and Tenant Act 1954 gives unusual rights to government departments. These include security of tenure, the right to renewal and the right to have the terms and conditions set by the courts. This represents a serious loss of control for the landlord.
Does the tenant enjoy diplomatic immunity? If so, it is likely to prove impossible to enforce the terms of the tenancy through the courts. This could prove highly risky and an agent/landlord would be well advised to avoid this sort of letting. Does your tenant’s application form ask this question?
Is the tenant renting the property while on holiday? Holiday lets must be to people genuinely taking a holiday. Claiming it is holiday let when it is no such thing will mean the court might well follow the facts and not what the agreement says. Now that the default agreement is a shorthold this is slightly less serious but you will still run into problems like not being able to serve a section 21 notice in the first six months. If you are letting holiday accommodation out of season and plan to use the fully assured tenancy then, if you want to use ground three, it is also a requirement that the property has been let out for a holiday in the last eight months.
Is the letting the prime residence of at least one tenant? This is a common area for problems. Many people may work away from home on a long-term basis and rent a property to stay in during the week. It is highly doubtful if these could ever practically be ASTs. Again, this may only come to light if the question is asked about whether this is to be their only or principal home. Note that whereas all the tenants have to be individuals, it just needs to be the only or the principal home of any one of them.
Is the tenant employed by the landlord? This may give rise to a potential ground 16 claim. This, and several other grounds, really exist because the vision when the act was passed was that most tenancies would be the secure type of assured tenancy and so this ground gives important rights. In practice, it may be easier to use an AST since ground 16 is discretionary.
Are there more than four tenants who will be jointly and severally liable? Section 34 of the Law of Property Act 1925 and sec 34 of the Trustee Act limit the number that can be jointly and severally liable under the tenancy agreement to four. If there is to be a larger group then the technically correct way to handle it is to let to four people and have them hold the property in trust for the wider group. Though the legal interest in land is limited to four the contractual obligations are not restricted to four. Therefore, if there are more than four, list them all with the first four being the “strongest” tenants, but include them all for contractual reasons.
The Landlord
Is this the landlord’s main or only residence? This could give rise to a ground 1 claim. Usually, it will be easier to use the AST and section 21 but sometimes you may wish to let for fewer than six months and this ground makes this possible. The downside of relying on serving a section eight notice and ground one is that you cannot use accelerated possession proceedings.
Is the landlord an educational establishment? This is because there is a special ground for specified educational establishments to let their student accommodation to non-students. It was created to allow them to set up agreements for fewer than six months. It has no relevance to the regular private rented sector.
Is the landlord a Business Expansion Scheme company? These were a Government tax incentive to encourage investment in certain areas that operated during the later 1980s and early 1990s. When originally formed, they had to use assured non-shorthold tenancies. They will often therefore have a substantial portfolio of such tenancies. New lettings can be on AST’s.
Is the landlord resident at the property? Resident landlords cannot use any type of assured tenancy. The decision on whether a landlord is resident is not as easy as it sounds and cases have been judged both ways in apparently similar circumstances. Schedule 1 of the Housing Act, para 10 details the exact definition, but the principle is that, if they live in the same building as originally constructed, and it is not a purpose-built block of flats, the landlord may qualify as resident (for the purposes of the Housing Act 1988, but not necessarily for the Protection from Eviction Act which has a separate definition).
The Property
Is the property let as a separate dwelling as required by section 1 of the Housing Act 1988? If you have people sharing everything in a house (including sharing a bedroom), each with their own agreement, they cannot have any type of assured tenancy. Under the Housing Act a “separate dwelling” only requires the tenant to have exclusive occupation of any accommodation (sec 3(1) of the HA 88). This means that they can share a bathroom or toilet. It can be a separate dwelling even if there is no kitchen available to the tenant (Uratemp Ventures v Collins 2001). If the tenancy is not within the Housing Act 1988 then they will require exclusive occupation of “living accommodation” (lounges, bedrooms and kitchens) or they will only have a licence.
Does the property include agricultural land of over two acres? Check the rating of the land to establish whether or not it has an agricultural designation. Typically, meadows and woods will be agricultural. If it is agricultural, you cannot use a Housing Act 1988 tenancy.
Is this an agricultural letting? The letting of farms (as a business) is excluded. It would be possible to let a farm house alone on an AST (for example, where two farms are farmed by one tenant farmer and the second house is spare).
Is the letting for residential purposes? Commercial premises cannot be let on assured tenancies. This is tricky where the person works from home or you are letting a property which has previously been a B&B or similar. Clarify the purpose of the letting in the contract. If there is a mixture of commercial and residential use, for example a shop with a flat above, then it has to be let on a commercial lease. You can, of course, let a self-contained flat above a shop (but not the shop itself) on an AST.
Has the property been a holiday let in the last year? This may give rise to the possibility of a claim using ground three for a possession action (though since the loss of the accelerated possession action for ground three and the fact assured shorthold tenancies can be set up for less than six months, this is not such a popular option).
Is the property subject to a mortgage? It is especially important to ensure that permission has been obtained if the property has a mortgage. Failure to do so could result in the reclaiming of Housing Benefit paid to you, action under the Accommodation Agencies Act 1953 or the repossession of the property by the lender for a breach of mortgage terms. Mortgage lenders often require service of a ground two notice (but watch out for the ground one trap). This is the fact that ground two says in para C) that it can only be used if a notice as in ground one above is served. It is not unknown for mortgage lenders to insist on a particular type of tenancy being used for them to give permission. In some cases, these conditions can conflict with Housing Act requirements and the Housing Act requirement is dominant. For example, we have seen a case where the property was a flat within the house of the landlord and the mortgage lender was insisting an AST was used, when the Housing Act prohibits the use of the AST when the landlord is resident in the same building (as originally constructed, Sch 2 case 10). In this case, it is worth being aware about the problem with the requirement but still doing what the lender asks to avoid being in breach of the mortgage.
Is this a minister of religion’s house? This gives the possibility for a claim using ground five. As with ground three, with the loss of APP, this is not so useful.
The Tenancy
High rental values. Rents over £100,000 per annum are prohibited from being within the scope of the Housing Act 1988. The threshold used to be £25,000 and was changed to make it more appropriate considering rent inflation.
Is the rateable value over £1,500 (Greater London) or £750 (elsewhere)? (This is only relevant to lettings before April 1993. Since then, the above rental figure was used as houses no longer had rateable values).
Is the rent a market rent? Very low rents (below £250 or £1,000 in Greater London) are excluded from being assured and would need to be set up by deed too.
Can the tenant stay for at least six months? If not, then you may have a problem in being able to take repossession action. It may be possible to use one of the first five grounds, but only if they apply and you need to be mindful that, without accelerated possession available, it may take just as long to repossess via the open court. The post Deregulation Act rules say that the section 21 notice cannot be served during the first four months in most cases. Even if the notice can be served, the court cannot award possession in under six months; this makes it important to ensure the property is available for six months in most cases.
Licences and Tenancy Agreements
The difference between a licence and a tenancy agreement is that, for a licence, the tenant must not enjoy exclusive possession of the property (which part varies depending on the legislation under which the property is let). Licences are therefore always outside the Housing Act (Section 1 of the 1988 Act is for letting a separate dwelling house). In the case of Bruton v London and Quadrant Housing Trust, the fact that exclusive occupation was granted was considered to be more important than the wording of any agreement (this supports the Street v Mountford decision) and interestingly overrode a clause in the landlord’s agreement prohibiting him from subletting on anything other than a licence.
The Outcomes
The tenancy will either be within or outside the Housing Act. Fuller details of tenancies excluded from the Housing Act are given later in the material.
If it is within the Housing Act, it will either be an assured shorthold tenancy (time limited) or an assured tenancy, which carries on until ended by permissible grounds.
If it is outside the Housing Act, it will probably be a contractual letting e.g. a company let, high rent tenancy, resident landlord or a licence (if there is no exclusive possession). If the tenancy is outside the Housing Act, you need to state why it is outside the Housing Act.
If the tenancy qualifies as within the remit of the Housing Act then a Housing Act tenancy must be used. It is not possible to elect to let under contract law. A qualifying tenancy, claiming to be outside the Act, will be regarded as within the Act should it come to court, regardless of the wording of the contract or any notices served. Statute law cannot be overridden by a contract.
The following flow chart shows the applicability of the Housing Act 1988 based on the four factors we have looked at. It then shows how, if it is inside the Housing Act 1988, it may be an assured or an assured shorthold tenancy. If it is not in the Housing Act, it may be some form of contractual tenancy or “something else”.
The following diagram shows how you can grant various lengths of time to a tenant in different types of tenancy. They all start with the option of granting a fixed term or a periodic tenancy from the outset. Under the original Housing Act 1988, you HAD to issue a fixed term for at least six months, this point was removed by the Housing Act 1996 and it is now acceptable to issue a periodic tenancy from the outset. The big difference is that, at the end of any fixed term granted under the Housing Act 1988, tenancies have a statutory periodic tenancy option whereas the tenancies outside the Housing Act 1988 do not; you have to either agree a new fixed term or establish a periodic tenancy. Doing nothing will most likely result in the conclusion that you have agreed a periodic tenancy.
Notices
With all notices it is preferable to have a copy signed for the landlord’s records. Therefore, where possible, produce at least three copies of the notices and have the second copy signed by the tenant and have the wording “Certified as a true copy” written on it. This may help the case of the landlord if there is any future question over correct service of a notice. The third copy is your “Proof of service” and will be certified as a true copy and sets out how and when the notice was served, ideally including a witness.
Remember to include notice service details on your agreement (for example “Notices will be served to the property address by first class post and will be deemed to have been served the second day after posting”). Failure to do this will increase the burden of proof required in court.
Housing Act Tenancies
Notices before a tenancy
The following notices are all “prior notice grounds”. This means that, in order to rely on one of these grounds, the tenant must have been given notice warning them that possession may be sought for one of these reasons, before the tenancy was granted. There is a provision that the court can dispense with the requirement for prior notice but it would be unwise to gamble on them agreeing to this dispensation.
Schedule 2 Ground One of the Housing Act 1988
The property is the only or principal residence of one of the landlords. This can be in the past or future (parts a and b).
Schedule 2 Ground Two of the Housing Act 1988
That the property has a mortgage provided before the tenancy was granted. There have been cases where the landlord has not had permission to let, has then had the property repossessed and the tenant has gone on to claim damages for loss of quiet enjoyment (current claims are around £3,000). Since 2010, where a landlord fails to get permission, the tenant can apply to the court in the event of a repossession asking for a period of two months to enable them to find alternative accommodation.
Schedule 2 Ground Three of the Housing Act 1988
That the property has previously been a holiday let.
Schedule 2 Ground Four of the Housing Act 1988
Where the property is let by an educational establishment.
Schedule 2 Ground Five of the Housing Act 1988
Where the property is a dwelling house held for the use of a minister of religion.
The following may be served prior to a tenancy or included in the agreement.
Section 47 of the Landlord and Tenant Act 1987
This requires that any demand for rent should include the name and address of the landlord. A legal case has decided the agent’s address is not acceptable (Beitov Properties v Martin 2012). Though a legal requirement, most assured shorthold tenancy landlords are less concerned with this requirement as the penalty is that no service charge may be charged and landlords of residential tenants do not general make service charge claims on the tenant (a service charge is a charge that varies based on variable cost; one example that might apply would be if tenants were charged by the landlord for the electricity they use).
Section 48 of the Landlord and Tenant Act 1987
This requires that the tenant is given an address in England or Wales where notices should be served. No rent is due, and claims for possession on rent arrears grounds may fail, until this notice is served. It may be served retrospectively, i.e. after the tenancy has begun. If a new landlord buys a property with existing tenants then this notice may have to be reissued. If you use the agent’s or the landlord’s address, and it changes, then these should be reissued (this is in addition to the requirements of Section 3 of the Landlord and Tenant Act 1985 to notify the tenant of any change in the landlord).
Notices During a Tenancy
The following notices may be served during a tenancy (under appropriate circumstances). They include notice during the fixed term served due to the tenant’s default on the agreement.
Housing Act 1988 Section 6 Notice
This notice may be used by either the landlord or tenant to propose a change in the terms and conditions of a tenancy (other than just a rent increase) during the first 12 months of a statutory periodic tenancy. It is very rare to use this notice and again, in its design the drafting presumed that people would all have the fully assured tenancy.
Housing Act 1988 Section 8 Notice
This notice is used if claiming possession under some of the 20 grounds in schedule 2 of the Housing Act 1988 (as amended). These might include Grounds 2 (mortgage repossession), 6 (redevelopment of the property), 7 (successional tenant), 7A (ASB, England only), 7B (Immigration, England only), 8 (rent arrears, mandatory), 9 (alternative accommodation), 10 (any rent arrears), 11 (persistent late payment), 12 (some other non rent obligation of the tenancy has not been fulfilled), 13 (deterioration of the property due to waste or neglect), 14 (nuisance), 15 (furniture deterioration), 17 (misrepresentation). England and Wales have different section 8 notices.
Housing Act 1988 Section 13 Notice
This is for proposing a new rent during a periodic tenancy where there is no clear specific provision in the agreement for a rent increase. As from April 2003, there are different forms for agricultural tenancies and properties in Wales.
Notices at the end of a Tenancy
The following notices may be used specifically to end the tenancy (without the tenant’s default) under the Housing Act 1988.
Housing Act 1988 Section 8 Notice
This notice is used if claiming possession under Grounds 1, 2, 3, 4 or 5 in Schedule 2 of the Housing Act 1988. These correspond to the five cases where prior notice may be used. It is also used for Grounds 6 (redevelopment of the property), 7 (death of a tenant), 9 (alternative accommodation), 16 (former employment ended) as well as those listed above.
Housing Act 1988 Section 21 Notice
This system of notice service is for ending an assured shorthold tenancy. At least two months’ notice is required and, in England, the earliest the notice can be served is the first day of month five. In order for the notice to run for two clear months, the earliest expiry date quoted should therefore be the first day of month seven. Be aware of the delay in serving notices. Notices posted first class will normally be considered to have been served two days after posting. As of the Deregulation Act 2015 a new Form 6A was prescribed to be used and it is this new form which must be used. Note that there are slightly different rules for serving the notice in the fixed term and when it is periodic, though they are generally only a concern for longer rental periods.
Non-Housing Act Tenancies
There are far fewer prescribed notices outside the Housing Act. A contractual tenancy (as with a company let), ends simply due to the effluxion (passing) of time. However, the Protection from Eviction Act 1977 may apply and this would require a court order before any repossession (unless the property is voluntarily returned vacant). Remember that the occupant may have a Housing Act tenancy with their landlord (your company tenant) which the landlord would inherit on repossession of the property.
If seeking possession at the end of a fixed term company let, no formal notice is required. However, some form of notice would be sensible and indeed essential if possession costs are to be claimed. Clarify in the agreement what notice will be required or given as statute law is silent on this matter. A Notice to Quit would be used to end a periodic tenancy.
Break Clauses
Break clauses are included in a tenancy agreement where one or both parties can at some stage seek to end the agreement before the end of the fixed term. The important point to understand is that a break clause does not, in itself, allow you to repossess the property. For example, if you have an assured tenancy for two years’ fixed term with a landlord’s break clause option at one year, operating the break clause simply changes the fixed term to periodic, and notice under one of the Schedule 2 grounds or section 21 would still be required to end the periodic tenancy that follows breaking the fixed term. Break clauses come in all shapes and sizes and it is important to read them carefully to understand them. For example, some require the notice breaking the tenancy to expire at the end of a rent payment period; others do not. Some require notice to be given on a specific date (but not thereafter) while others allow for notice on any day after a given date.
Tenants Giving Notice
A tenant may not give notice to end the contract during the fixed term of an agreement unless the contract allows for this (or the landlord agrees to it later). The fixed term binds the tenant to those obligations for the whole term (break clauses excepted).
For periodic tenancies the Protection from Eviction Act states that the tenant or landlord must give at least four weeks’ notice. This does not reduce the two months’ notice required from a landlord by the Housing Act 1988 where applicable as it says “at least” 28 days’ notice. Periodic notices must end on the last day of a rent period (or for non-Housing Act notices and the tenant serving notice to quit on a Housing Act tenancy, they can end on the first day of the next period as well). Longer terms on giving notice could be negotiated, but watch that these terms do not survive the transition to being statutory periodic and the situation reverts to the basic legal position of one and two months for the tenant and landlord respectively on Housing Act monthly tenancies.
The Law of Property (Miscellaneous Provisions) Act 1989
Section 2 of this legislation, and the Law of Property Act 1925 section 52, requires that the contract for the disposal of land can only be made in writing and by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each. It states that all conveyances of land or any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed. The exception to this is short leases as defined in the Law of Property Act 1925 sec 54(2)). Letting without the use of a deed is therefore limited to fixed terms of no more than three years.
There are two other requirements contained in section 54 of the Law of Property Act 1925. These are that you must let “at the best rent which can reasonably be obtained without taking a fine” and it must “take effect in possession”. The first of these means that if a property is let at less than the open market rent or let on a premium lease (where a large lump sum is paid upfront for the right to occupy for a period of time), you would have to use a deed. The second part means that you would have to use a deed if you wish to set up a tenancy in advance of the date on which it is due to start (a bit like the purchase of a house where exchange and completion are kept separate).
Miscellaneous
It is worth noting that landlords do not have an automatic right to enter a let property (except for specified purposes). It is therefore important to add a clause covering this to a tenancy agreement to allow landlords the right to enter the property etc.
The Landlord and Tenant Act 1985 sections 4-6 make it a requirement to issue rent books to tenants paying rent weekly. Weekly rent also delays the date on which possession can start from the second day of the second month (about 33 days after the first rent is missed) to the second day of the eighth week (about 51 days) after the first rent payment is missed.
The Landlord and Tenant Act 1987 section 48 requires that the tenant is given an address in England and Wales where notices can be served.
Sharing
If a property is a bedsit type HMO then the landlord becomes liable for the council tax (under Council Tax Regulations) and this should therefore be factored into the rent paid.
The Housing Act 2004 redefined HMOs and required some of them to be licensed. In simple terms, any property occupied by three sharers who are not all related (could be two single ladies, one with a baby or a couple and an unrelated single person) will be an HMO. If it is an HMO with five or more occupiers from two or more households, it will probably need a licence.
If the property is an HMO, the environmental health office may also take an interest in the number of toilets, sinks and bathrooms provided in relation to the number of occupants, refuse provisions and room sizes. Additional fire safety precautions may also be prescribed for HMOs. These may include smoke or fire alarms, fire doors, and fire escapes. The Management of Houses in Multiple Occupation (England) Regulations 2006 impose responsibilities on managers (landlords and possibly the agent if there is one) in respect of these fire regulations (ensuring fire exits are kept clear, notices are displayed, fire precautions are effective etc.)
As local authorities vary in their requirements, discussion with your local authority will be necessary. The Housing Act 2004 gave the local authority the power or the duty to introduce up to three types of licensing in their area. Failure to comply carries unlimited fines.
If one tenant (or landlord for that matter) gives notice on a joint and several tenancy, the notice is deemed to be from all if ending a fixed term at the end or ending a periodic tenancy,
If a guarantor is needed for a group of sharers then a guarantor has to be liable for the total liability not just a portion (joint and several liability). Therefore, ideally only one guarantor should be used for each joint and several letting. It is important that any guarantor is vetted, to confirm suitability, and bound into the contract. In many cases guarantors are not willing to take on the risk of others defaulting. The only solution is to allow the guarantors to guarantee a share of the debt (say 25% if there are four). The debt may not have been “caused” by their son/daughter or whatever, but it will usually bring the risk down to a level most will accept.
Family Law Act 1996
Part IV of this Act contains provisions for a divorce court to transfer tenancies. It basically re-enacts, with limited modification, the Matrimonial Homes Act 1983.
The Law of Property Act 1925
This legislation gives the mortgagee (the company lending the money) the right to repossess the property to exercise their power of sale rights. This may give rise to a breach of contract claim by the tenant. Past cases have received £2,500 - 3,000 in damages. On a Housing Act tenancy, you still need to have served a ground 2 notice prior to the tenancy if you are to break the fixed term. Ideally, it should be made clear that the notice cannot be exercised within the initial six months to avoid the problem of the tenant not having the benefit of their full contractual term.
Changes in leases
Generally, the parties to a lease are free to change the conditions of the lease by agreement. There are, however, some established areas which cannot be altered without creating a new agreement (possibly this would result in a verbal contract and might preclude the use of accelerated possessions).
The following areas of a lease should not be altered without issuing a new tenancy:
- ¨The property let should not be changed or increased (an increase may happen if the landlord was storing furniture in one bedroom and subsequently removes it and says the tenant can have that room too).
- ¨The tenants. This would mean that if A, B and C share a tenancy and C wishes to leave and be replaced by D then you should create a whole new agreement with the new group of tenants to be safe. This would also retrigger the How to Rent Guide, deposit protection etc.
- ¨The term of the agreement. It can be shortened (by accepting surrender) but cannot be lengthened without effecting a surrender and re-grant. If you wish to create a longer fixed term, it is therefore wise to issue a new tenancy for the new fixed term.
PART 1 (Housing Act 1988)
RENTED ACCOMMODATION
Chapter 1
Assured Tenancies
Meaning of assured tenancy etc.
1 A tenancy under which a dwelling-house is let as a separate dwelling is for the purposes of this Act an assured tenancy if and so long as-
(a) the tenant or, as the case may be, each of the joint tenants is an individual; and
(b) the tenant or, as the case may be, at least one of the joint tenants occupies the dwelling-house as his only or principal home; and
(c) the tenancy is not one which, by virtue of subsection (2) or subsection (6) below, cannot be an assured tenancy.
2 Subject to subsection (3) below, if and so long as a tenancy falls within any paragraph in Part I of Schedule 1 to this Act, it cannot be an assured tenancy; and in that Schedule-
(a) “tenancy” means a tenancy under which a dwelling-house is let as a separate dwelling;
(b) Part II has effect for determining the rateable value of a dwelling-house for the purposes of part I; and
(c) Part III has effect for supplementing paragraph 10 in Part I.
[2A The Secretary of State may by order replace any amount referred to in paragraphs 2 and 3A of Schedule 1 to this Act by such amount as is specified in the order; and such an order shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]
SCHEDULE 1
TENANCIES WHICH CANNOT BE ASSURED TENANCIES
Part 1
The Tenancies
Tenancies entered into before commencement
1 A tenancy which is entered into before, or pursuant to a contract made before, the commencement of this act.
Tenancies of dwelling-houses with high rateable values
2 (1) A tenancy-
(a) which is entered into on or after 1st April 1990 (otherwise than, where the dwelling-house had a rateable value on 31st March 1990, in pursuance of a contract made before 1st April 1990), and
(b) under which the rent payable for the time being is payable at a rate exceeding £100,000.00 a year.
(2) In sub-paragraph (1) “rent” does not include any sum payable by the tenant as is expressed (in whatever terms) to be payable in respect of rates, [council tax,] services, management, repairs, maintenance or insurance, unless it could not have been regarded by the parties to the tenancy as a sum so payable.
2A A tenancy-
(a) which was entered into before the 1st April 1990, or on or after that in date in pursuance of a contract made before that date, and
(b) under which the dwelling-house had a rateable value on the 31 March 1990 which, if it is in Greater London, exceeded £1,500 and, if it is elsewhere exceeded £750.
Tenancies at a low rent
3 A tenancy under which for the time being no rent is payable.
3A A tenancy-
(a) which is entered into on or after 1st April 1990 (otherwise than, where the dwelling-house had a rateable value on 31st March 1990, in pursuance of a contract made before 1st April 1990), and
(b) under which the rent payable for the time being is payable at a rate of, if the dwelling-house is in Greater London £1000 or less a year and, if it is elsewhere, £250 or less a year.
3B A tenancy-
(a) which was entered into before 1st April 1990 or, where the dwelling-house had a rateable value on the 31st March 1990, on or after 1st April 1990 in pursuance of a contract made before that date, and
(b) under which the rent for the time being payable is less than two-thirds of the rateable value of the dwelling-house on 31st March 1990.
3C Paragraph 2 (2) above applies for the purposes of paragraphs 3, 3A and 3B as it applies for the purposes of paragraph 2 (1).
Business tenancies
4 A tenancy to which Part II of the Landlord and Tenant Act 1954 applies (business tenancies).
Licensed premises
5 A tenancy under which the dwelling-house consists of or comprises premises licensed for the sale of intoxicating liquors for consumption on the premises.
Tenancies of agriculture land
6 (1) A tenancy under which agricultural land, exceeding two acres, is let together with the dwelling-house.
(2) In this paragraph “agricultural land,” has the meaning set out in section 26 (3) (a) of the General Rate Act 1967 (exclusion of agricultural land and premises from liability for rating).
Tenancies of agricultural holdings etc
7 (1) A tenancy under which the dwelling-house-
(a) is comprised in an agricultural holding, and
(b) is occupied by the person responsible for the control (whether as tenant or as servant or agent of the tenant) of the farming of the holding.
(2) A tenancy under which the dwelling-house-
(a) is comprised in the holding held under a farm business tenancy, and
(b) is occupied by the person responsible for the control (whether as tenant or as servant or agent of the tenant) of the management of the holding.
(3) In this paragraph-
“agricultural holding” means any agricultural holding within the meaning of the Agricultural Holdings Act 1986 held under a tenancy in relation to which that Act applies, and
“farm business tenancy” and “holding”, in relation to such a tenancy, have the same meaning as in the Agricultural Tenancies Act 1995.
Lettings to students
8 (1) A tenancy which is granted to a person who is pursuing, or intends to pursue, a course of study provided by a specified educational institution and is so granted either by that institution or by another specified institution or body of persons.
(2) In sub-paragraph (1) above “specified” means specified, or of a class specified, for the purposes of this paragraph by regulations made by the Secretary of State by statutory instrument.
(3) A statutory instrument made in the exercise of the power conferred by sub-paragraph (2) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
Holiday lettings
9 A tenancy the purpose of which is to confer on the tenant the right to occupy the dwelling-house for a holiday.
Resident landlords
10 (1) A tenancy in respect of which the following conditions are fulfilled-
(a) that the dwelling-house forms part only of a building and, except in a case where the dwelling-house also forms part of a flat, the building is not a purpose-built block of flats; and
(b) that, subject to part III of this Schedule, the tenancy was granted by an individual who, at the time when the tenancy was granted, occupied as his only or principal home another dwelling-house which,-
(i) in the case mentioned in paragraph (a) above, also forms part of the flat; or
(ii) in any other case, also forms part of the building; and
(c) that, subject to part III of this Schedule, at all times since the tenancy was granted the interest of the landlord under the tenancy has belonged to an individual who, at the time he owned that interest, occupied as his only or principal home another dwelling-house which,-
(i) in the case mentioned in paragraph (a) above, also formed part of the flat; or
(ii) in any other case, also formed part of the building; and
(d) that the tenancy is not one which is excluded from this sub-paragraph by sub-paragraph (3) below.
(2) If a tenancy was granted by two or more persons jointly, the reference in sub-paragraph (1) (b) above to an individual is a reference to any one of those persons and if the interest of the landlord is for the time being held by two or more persons jointly, the reference in sub-paragraph (1) (c) above to an individual is a reference to any one of those persons.
(3) A tenancy (in this sub-paragraph referred to as “the new tenancy”) is excluded from sub-paragraph (1) above if-
(a) it is granted to a person (alone, or jointly with others) who, immediately before it was granted, was a tenant under an assured tenancy (in this sub-paragraph referred to as “the former tenancy”) of the same dwelling-house or of another dwelling-house which forms part of the building in question; and
(b) the landlord under the new tenancy and under the former tenancy is the same person or, if either of those tenancies is or was granted by two or more persons jointly, the same person is the landlord or one of the landlords under each tenancy.
Crown tenancies
11 (1) A tenancy under which the interest of the landlord belongs to Her Majesty in right of the Crown or to a government department or is held in trust for Her Majesty for the purposes of a government department.
(2) The reference in sub-paragraph (1) above to the case where the interest of the landlord belongs to Her Majesty in right of the Crown does not include the case where that interest is under the management of the Crown Estate Commissioners.
Local authority tenancies etc
12 (1) A tenancy under which the interest of the landlord belongs to-
(a) a local authority, as defined in sub-paragraph (2) below;
(b) the Commission for the New Towns;
(c) the Development Board for Rural Wales;
(d) an urban development corporation established by an order under section 135 of the Local Government, Planning and Land Act 1980;
(e) a development corporation, within the meaning of the new Towns Act 1981;
(f) an authority established under section 10 of the Local Government Act 1985 (waste disposal authorities);
(g) A residuary body, within the meaning of the Local Government Act 1985;
[(gg) The Residuary Body for Wales (Corff Gweddilliol Cymru);]
(h) a fully mutual housing association; or
(I) a housing action trust established under part III of this Act.
(2) The following are local authorities for the purposes of sub-paragraph (1) (a) above-
(a) the council of a county, [county borough,] district or London borough;
(b) the Common Council of the City of London;
(c) the Council of the Isles of Scilly;
(d) the Broads Authority;
(e) the Inner London Education Authority: and
(f) a joint authority, within the meaning of the Local Government Act 1985 [and
(g) a police authority established under section 3 of the Police Act 1964.]
Transitional cases
13 (1) A protected tenancy, within the meaning of the Rent Act 1977.
(2) A housing association tenancy, within the meaning of Part VI of that Act.
(3) A secure tenancy.
(4) Where a person is a protected occupier of a dwelling-house, within the meaning of the rent (Agriculture) Act 1976, the relevant tenancy, within the meaning of that Act, by virtue of which he occupies the dwelling-house.
Venue Facilities
Directions