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Why checking the rent is essential

This content applies to England

Why it is crucial to check the rent payable on a tenancy.

The rent can help determine key information about a tenancy, including the type of tenancy it is, the tenant's rights, and whether it is in fact not a tenancy, but a licence.

Tenancy or licence

The obligation to pay rent is generally held to be one of the three requirements for a tenancy to be created, as opposed to a licence.[1] The rent payable on a property - or lack of rent payable - therefore plays an important role in determining an occupier's security of tenure and rights. Case law has held that rent is not always essential to the creation of a tenancy, but any such tenancy would still fall outside the security of tenure provisions of the Rent Act 1977 and Housing Act 1988.[2] See What is a tenancy? for more information.

Low or high rents

The level of the rent payable can also determine the type of tenancy that the occupier has, and thus the security of tenure and other rights of that occupier. For example, a tenancy at a very low or very high rent will not qualify as a protected tenancy under the Rent Act 1977, nor as an assured tenancy under the Housing Act 1988 (see the page on Rent levels - the paragraph on tenancies at an exceptionally low or high rent).

Avoiding rent arrears

When advising clients on rent issues, it is important to know what payments are lawfully due to the landlord as a term of the written or verbal tenancy agreement. If lawfully due payments are not made, rent arrears will accrue, and this will constitute a breach of the tenancy agreement. Where this happens, the landlord could apply for possession and/or a money judgment.

Where there is a separate charge, for payments such as water rates or council tax, set out in the tenancy agreement as an obligation of the tenancy then it is likely that arrears of these charges would be classified as rent arrears (see What is rent), and the landlord could apply for possession using the rent arrears grounds.[3]

Law of distress - abolished

Distress was a little used common-law right where in certain circumstances a landlord could take goods from a tenant for non-payment of rent. It was abolished with effect from 6 April 2014.[4]

[1] Street v Mountford [1985] 2 WLR 877.

[2] Ashburn Anstalt v Arnold [1988] 2 WLR 706, CA; AG Securities v Vaughan (1988) 21 HLR 79, HL.

[3] for eg see Escalus Properties Ltd v Robinson [1996]; Sidney Trading Co v Finsbury Corp [1952] 1 All ER 460.

[4] s.71 Tribunals, Courts and Enforcement Act 2007; art. 2(1)(a) Tribunals, Courts and Enforcement Act 2007 (Commencement No. 11) Order 2014 SI 2014/768.

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