The Housing Act 1980

The Housing Act 1980 brought significant changes into law governing private rentals. The change was prompted by a dramatic drop in the private rented sector towards the end of 1970‘s. Some  data reported that since the end of the First World War until 1979 the rented properties had gone down around 65%. The new conservative government headed by Margaret Thatcher decided to introduce a reform through the Housing Act 1980.

The main purpose of the Act was to:

  • offer council tenants the right to buy;
  • provide landlords with better rights and protection.

Towards the end of 1980’s the reform took off and there was a great wave of private individuals becoming landlords by buying 2-3 residential properties as an investment.

Rent Charges

Under the Housing Act 1980 the concept of fair rent has been largely scrapped and generally landlords are allowed to freely negotiate rents. The tenant still however has the right to refer any proposed rent increases during the assured periodic tenancy to the Rent Assessment Committee.

Security of Tenure

The Housing Act created ‘assured’. Unlike the old regime the assured tenancy provides not only security to the tenant but primarily is beneficial to the landlord as it offers him additional ground for repossession based on serious rent arrears. The Act has also introduced another type of assured tenancy – the assured shorthold tenancy (AST). The AST has become very popular and is the most common type of private tenancy in England and Wales.

The AST has two distinct features:

  • It offers the tenant the right to challenge the rent in the first six months; and
  • provides the landlord with an additional repossession ground through section 21 of the Act.

What is section 21 notice?

Section 21 notice to quit is a notice that can be served by the landlord at the end of the assured shorthold tenancy to regain possession of the property. Section 21 notice can be served without any reason for ending the tenancy agreement. In order to be valid section 21 notice needs to be served in accordance with legal procedures set out in the Act.

Serving section 21 notice during fixed term tenancy

Section 21 must be served with at least two months’ notice. The notice must be in writing and clearly state that the landlord is seeking to regain possession for the property. The two months’ notice beings when the tenant receives the notice and not when the notice is originally posted.

Serving section 21 notice during periodic tenancy

Upon expiry of the fixed term tenancy, unless a new fixed term is successfully entered into, the tenancy will automatically convert into a statutory periodic tenancy which rolls from week to week or month to month depending on how often the rent used to be paid under the original agreement.

Similarly as in the case of fixed term tenancy, also here section 21 notice must be offered with at least 2 months’ notice. The 2 months’ notice must however expire on the last day of a period of the tenancy. For example, if the rent is paid on a monthly basis the period of the tenancy is one month. Consequently, if the fixed term tenancy expired on 28th, the periodic tenancy automatically starts on 29th and section 21 notice would have to expire on 28th two months after the notice was served.

If the tenant does not comply with the notice the landlord is entitled to apply to the court for a possession order. The court will only be able to give the possession order if section 21 notice was correctly served. If the tenant further resists and does not vacate the property the landlord can seek bailiffs to evict the tenant.

Succession:

Under the AST, if the tenant dies, the tenancy will vest in accordance with the statutory rules. The statutory rules provide that the tenancy will vest in the tenant’s spouse (or person living as spouse) if:

  • Immediately before the death the spouse was occupying the dwelling-house as his/her only or principal home; and
  • The tenant was not such a successor him or herself (only one statutory succession is permitted)

If no such qualified person exists, the normal rules of administration of estates will apply. Also in the case of fixed term tenancies there are no statutory succession provisions and the tenancy will vest in the normal course of administration of the tenant’s estate.

For more information you can also refer to this article.

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May 20, 2012