Tenancies with high rents – changes on 1 October 2010

(This change is due to come into effect for landlords in Wales on 1 December 2011)

High rent common law tenancy changes

This is a just a reminder of what all landlords of high rent tenancy properties ought to know already.

At the moment all tenancies with a rent of between £25,000 and £100,000 are ‘common law‘ tenancies. On 1 October 2010, all these tenancies will change automatically to assured shorthold tenancies.

There are a number of points leading on from this:

• Notices to quit should no longer be served if you want tenants to vacate
• You should now serve section 21 and section 8 notices instead
• The accelerated possession procedure will now be available to you (but not during the first six months after 1 October 2010), and
• You will now need to protect the tenancy deposits

So far as deposits are concerned, the advice coming from the government appears to be that they do not need to be protected until a new tenancy agreement or renewal form is given to the tenant.  However most advisors are suggesting that deposits be protected anyway as a precautionary meausre.  It is free if you use the DPS.

If you want to evict your tenant under s21, note that you may not be able to do this until after April 2011.  It is being suggested that, as the properties are ‘new ASTs’ (ie not replacement ASTs) the six month period during which a possession order cannot be made, as set out in s21 of the Housing Act 1988, will apply here.  Which I suspect will annoy many landlords.

Landlords of older tenancies are warned that tenants may acquire greater security of tenure on 1 October.  This was discussed on this post here.

Are you aware of any other pending problems with this change?

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Update: The Communities and Local Government web-site has published a FAQ page here.