I have just learned via the National Landlords Association, that the government *will* be implementing the increased rent level for ASTs that was announced in their news item on 3 February.
However the surprising piece of news is that the legislation will be retrospective So all tenancies where the rent is between £25,000 and £100,000 on 1 October 2010, on the day the changes are scheduled to come force, will change automatically into ASTs at that time.
There are two main consequences following on from this:
- All landlords of these tenancies who have taken a deposit, will need to ensure that it is protected, or they will be in default, and
- The procedure for evicting tenants will then be the procedure laid out in the Housing Act 1988, so you will need to serve a section 21 or section 8 notice first (not a Notice to Quit as now). Note also that the forfeiture procedure, currently available to ‘common law’ landlords, is specifically prohibited under the Housing Act 1988.
I have not had an opportunity to see any of the delegated legislation setting this up and will do a further blog post once I have more information. Many thanks to the NLA for keeping me informed.
David Salusbury, Chairman, NLA, said:
“Although we are still piecing together the facts, the retrospective nature of this change is highly regrettable, and it could have a wide-ranging impact on the letting of private residential property. For example, landlords in this higher rent bracket will have to protect deposits for the first time. If they fail to do so by October 1 2010 they could be in breach of the law. We are told the courts are being forewarned.
“The NLA believes the Government is rushing through this change without fully thinking through the consequences. We call for greater consultation to ensure this measure does not have a negative impact on the private-rented sector. We will continue to provide the most up-to-the minute help and advice on the issue to landlords and have published a guide to help landlords comply with the law. The NLA will continue the press the Government for further consultation.”
Watch this space!
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I’m not sure why this is supposed to be a problem (as the NLA suggests) – after all, if tenants in those rent brackets deserve protection, why should protection depends on when the tenancy commenced?
As to the balance of convenience, any landlords who have been dealing with deposits properly should find it little more than a slight inconvenience to put the deposits in a protection scheme.
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Thanks for bringing this to our attention. Like many government actions, I can’t help but think that thiss is a case of good intentions run amok.
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