Urban Myth – when a landlord lets a property, its still his

Many landlords are outraged when they are told that their conduct towards their tenants is illegal.  “Its my house isn’t it, so why can’t I go in when I like?” is a common response.  But what they don’t realise is that it isn’t their house any more.  Not in the same way that it was before it was let.

We have a limited supply of land in England and Wales, and it is something which we all need and use.  As a result, down the centuries, there have been various ingenious solutions to the problem of how different people can have different legal interests or ownership at the same time, over the same bit of land or property.

The Lease solution

One of these solutions is the lease or tenancy.  This is where you ‘sell’ the land to someone, but just for a slice of time. So the tenant or lessee owns the land or property for the specified time period (and has the sole right to live in it or use it), and you own the right to be paid rent and to get it back afterwards.  What lawyers call the ‘reversion‘.

A lease (or term of years) is one of the two ‘legal interests’ in land provided for in the Law of Property Act 1925 s1.  The other legal interest is ‘freehold’.

There are a  number of different kinds of lease, but they all work in more or less the same way:

• There is a transfer of the legal rights over the land for a specific period of time (called a term or fixed term), normally by a written document or deed.  During that period of time, the property, in effect, belongs to the person renting the property.  Or, to put it in legal language, they own a ‘legal interest’ in the land that grants them control over it.
• That person (the lessee or tenant) pays rent and sometimes pays a premium (eg to ‘buy’ a flat)
• The lessor or landlord has the right to receive rent (for long leases this is called ground rent), and get the property back again once the lease is ended
• The lease or tenancy is governed by terms and conditions, either in a written lease or tenancy agreement, or implied by statute – and some statutory rules will override the terms agreed between the parties
• Sometimes, for some types of lease or tenancy, there will be legal rules which will make the tenancy continue after the fixed term comes to an end, if the tenant wants this (regardless of the wishes of the landlord)

Leaseholder rights

When you buy a long lease from the freeholder for £300,000 for a term of 99 years  (or take an assignment of a lease that has been granted to someone else for a similar price) it never occurs to anyone that you don’t own the property.  The freeholders know that they can’t go barging in whenever they feel like it.

However, because an assured shorthold tenancy is for a much shorter time, many landlords think that it does not really belong to the tenants and that they still have owner rights.

They don’t

So if you keep going into your tenant’s property, without their permission, that is unlawful. You can be prosecuted by the local authority under the criminal law, and your tenant can sue you under the civil law for an injunction to stop you going in, and for financial compensation.

It will still be the tenant’s property (or they will still hold their legal interest), even though they may not be paying the rent.  The fact that they are not paying the rent will normally entitle you, the landlord, to go to court and ask for the tenancy to be brought to an end.  But (for residential leases/tenancies) it does not allow you to end it yourself, now, without a court order, and to physically evict the tenant.  That would be unlawful.

This is the way it is.

There are no exceptions

The same rules apply to all landlords, whether they are professional investor landlords, ‘accidental’ landlords letting a property because they can’t sell it, or someone renting out their home while they are abroad for a year.

After all, so far as the tenant is concerned, it is their home.

Why should two identical families, paying the same rent for identical properties, be treated differently, just because one is renting from an investor landlord and the other is renting  from a home owner working abroad for a year? That would be unfair.

The only solution

So if you are thinking of renting out a property and feel unhappy about this, there is only one answer.  Don’t rent.  Because if you rent to a tenant, you will be bound by these rules.  Whether you like it or not.

Why not read the rest of my Urban Myths now?