Many landlords are extremely angry that their right to a no-fault eviction is due to end when the Renters Rights Bill comes into force.
No doubt, they will be looking to create an occupation type where they will have similar rights.
Here are four options they may be considering:
1. Utilising section 30 and creating 7 year + tenancies
As pointed out by Justin Bates KC when he gave evidence to the committee stage of the bill, section 30 of the bill currently provides that the bill provisions will not apply to a fixed term tenancy of more than seven years.
As he pointed out, it would be easy for a landlord to grant a fixed term of seven years and one day with a right to terminate on two months’ notice.
This type of tenancy would be extremely prejudicial to tenants as the various repairing and fitness rules do not apply to tenancies with a term of seven years or more.
However, as this issue was pointed out to the committee, it is highly likely that section 30 will be amended or deleted. Indeed, Justin Bates informed the committee, during his evidence, how this could be done. So, this option is unlikely to remain available for landlords.
2. Creating a common law tenancy
This was a suggestion put forward by one of our Landlord Law members on our forum.
The member is a student landlord, and he suggested renting a property to the student’s parents. As they would not be living at the property, it would be a common law tenancy – as section 1 of the Housing Act 1988 limits the application of the act for tenancies where
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
The suggestion was that the students would be allowed by their parents to live in the property as permitted occupiers.
At the moment it looks as if this could be an option for student landlords.
3. ‘Proper’ residential licenses
A tenancy is the default occupation type in England. For this not to apply, there needs to be something that takes the occupation outside the definition of a tenancy.
The leading case here is the House of Lords decision in the case of Street v. Mountford. This was about whether Mrs Mountford had a tenancy or a residential license. Their lordships held that a tenancy would, in most cases, not be created if the occupier did not have ‘exclusive possession’.
One common way of creating a residential tenancy where the occupier does not have ‘exclusive possession’ is for the landlord to contract to provide services. If these require the landlord or their employees to regularly enter the property.
These could be:
- Cleaning services
- Providing and changing towels and bed linen
- Having a concierge service which would receive deliveries on behalf of the occupier and put them in the property (normally, this would be a flat)
- This could include putting away groceries into the kitchen larder, fridge and freezer
- Entering to carry out basic services such as changing lightbulbs when the occupiers are out
However, for a genuine residential license to be created, the services must actually be provided. This sort of thing will be expensive for the landlord to provide. So, this type of ‘serviced accommodation’ will normally be at the higher end of the market.
It is possible, though, that regulations made after the bill comes into force will provide for residential licenses to be regulated, as has happened in Wales. So landlords considering providing serviced accommodation should watch out for this.
4. Allowing tenants to sublet to lodgers
Lodgers are excluded from protection under the Protection from Eviction Act 1977 and so landlords do not need to obtain a Court order for Possession. Provided the conditions in section 3A subsections (3) and (3) of the act apply.
These are basically that:
- The landlord or a member of the landlord’s family occupied the property as their only or principal home immediately before the license was granted, and
- The occupier shares accommodation with the landlord or licensee. Note that this must be ‘proper’ living accommodation, such as a shared living room or kitchen, not just staircases, passages, corridors etc.
So, although the tenant would be protected under the act, anyone they sublet to (provided they shared living accommodation with them) would not.
The only problem with this is that it would, in most cases, turn the property into an HMO. If there were more than 5 occupiers, this would be a licensable HMO (or if the property was in an area subject to additional or selective licensing).
So this would only really ‘work’ if there were just two people living at the property, as a property with just two occupiers cannot be an HMO.
This model could, though, be used when a landlord purchases a flat or house for their student child, who is allowed to share it with just one lodger.
If you want to find out more about the law applying to lodgers, see our Lodger Landlord website.
Any other suggestions?
These are all the options that I can think of just now. But do any readers have any other suggestions?