Tenancies that cannot be assured

A tenancy cannot be an assured tenancy if it is one of the exceptions listed in the Housing Act 1988.[1]

In most of the excepted situations, the occupier has basic protection or is an excluded occupier.

Tenancies that began before 15 January 1989 or are under a contract made before that date cannot be assured.[2] They are usually regulated tenancies or restricted contracts.

There are two exceptions to this rule:

• 'old style' assured tenancies, created by the Housing Act 1980,[3] which the Housing Act 1988 immediately converted into new assured tenancies,[4] and

• tenancies transferred from the public sector to another landlord under provisions contained in Parts 3 and 4 of the Housing Act 1988, which become assured tenancies on transfer.[5]

There are two situations where a tenancy granted to an existing regulated tenant cannot be assured.[6]

New tenancies offered to existing Rent Act tenants

A tenancy granted after the Housing Act 1988 cannot be a Rent Act protected tenancy unless it is granted to an existing Rent Act 1977 protected tenant.[7] There has been some debate as to whether this means that all new tenancies granted to former Rent Act tenants will remain regulated or whether it only means that they can remain regulated. Although the wording of the Act on this matter is not completely clear, the practice of the County Court has been to favour the interpretation that the clause is mandatory.[8]

In order for the above to apply, the new tenancy must be granted to a person who (alone or jointly with others) was a protected tenant of the landlord (or one of the joint landlords) who is granting the new tenancy. It is not necessary for the property to be the same.[9] However, the legislation that allows for continuity of regulated tenancy status[10] only applies to a person who was a protected or statutory tenant prior to the commencement of the Housing Act 1988. It was thought that regulated tenancy status could be passed on to new joint tenants but this is only possible if one of the joint tenants was a regulated tenant prior to the Housing Act 1988.[11]

Offers of suitable alternative accommodation to regulated tenants

Where a regulated tenant is evicted on the Rent Act ground that suitable alternative accommodation is offered by the landlord, the court can direct that the alternative accommodation should be protected by the Rent Act 1977.[12] The same applies to the similar ground for Rent (Agriculture) Act tenants.

When determining the rateable value of a property, information can be found from the finance department of the local authority. If the tenancy is for part of a house, the rateable value will be apportioned.

In deciding the level of rent, payments towards council tax, repairs, maintenance, management, services and insurance are disregarded.[13]

Tenancies granted in pursuance of a contract made before 1 April 1990, even if starting on or after that date, and where the property had a rateable value on 31 March 1990, are treated as tenancies starting before 1 April 1990.

Tenancies can fall in and out of the protection given by assured status if rent increases or reductions take the rent above or below the low or high rent levels below.

High rateable value or high rent

A tenancy entered into before 1 April 1990 cannot be assured if the rateable value on 31 March 1990 exceeded £1,500 in Greater London or £750 elsewhere.[14]

Tenancies entered into on or after 1 April 1990 where the annual rent is more than £100,000, cannot be assured – before 1 October 2010 in England, and 1 December 2011 in Wales, the threshold was £25,000.[15]

In one case, a rent review clause under which the rent on an assured tenancy was increased automatically to a sum over £25,000 (the then threshold) was held to be invalid, where there was no intention to collect rent at that figure.[16]

Tenancies at a low rent

A tenancy entered into before 1 April 1990 where there is no rent,[17] or where the rent is less than two-thirds of the rateable value on 31 March 1990, cannot be assured.[18]

Tenancies entered into on or after 1 April 1990 where there is no rent, or where the annual rent is £1,000 or less in Greater London or £250 or less elsewhere, cannot be assured.[19]

A tenancy to which Part 2 of the Landlord and Tenant Act 1954 applies cannot be an assured tenancy. This covers any tenancy where the property is occupied for the purposes of a business (apart from a home business tenancy).[20] The business use has to be a significant reason for occupation rather than incidental. For example, where a doctor had been given permission to carry on a business from his home but had in fact only occasionally seen a patient at home in an emergency and used the telephone for his profession, it was held to be a regulated and not a business tenancy.[21]

A Court of Appeal decision[22] considered the status of a tenancy commenced in 1995 which was used for mixed residential/business purposes, and therefore, within the scope of Part 2 of the Landlord and Tenant Act 1954. Possession proceedings were commenced after the tenant fell into rent arrears; the County Court ordered that the tenant give up possession to the landlord. The possession order was set aside on appeal, the tenant, successfully argued that as the property was party residential, the tenancy was an assured tenancy and protected under the Housing Act 1988. However, the landlord appealed; the Court of Appeal ruled that, despite mixed purposes, the tenancy was a business tenancy covered by the Landlord and Tenant Act 1954, and reinstated the earlier possession order.

'Home business tenancies'

For assured tenancies created on or after 1 October 2015, where the landlord gives consent to a 'home business', either through the terms of the agreement or subsequently, the tenancy will not be a business tenancy regulated by the Landlord and Tenant Act 1954 but will be a 'home business tenancy' which will retain assured tenancy status.[23]

A 'home business' is one that can 'reasonably be carried on at home'[24] such as internet businesses, financial consultancy, advertising copywriting, or a translation service.[25]

A tenancy that consists of or includes premises licensed for the sale of intoxicating liquors for consumption on the premises cannot be assured.[26] It may be arguable that a tenancy of a room or rooms above a pub does not fall within this exception. However, there is no case law on this point. Since 1 January 1991, the Landlord and Tenant Act 1954 has protected new business tenancies of licensed premises. The Landlord and Tenant Act 1954 therefore protects pub landlords who live on the premises.[27]

A tenancy under which agricultural land of more than two acres is let with the dwelling-house cannot be assured.[28] In addition, a dwelling-house that is let with land of less than two acres, where the main purpose of the letting is not to provide a home, cannot be assured. If the main purpose is to provide a home, the land is treated as part of the dwelling-house and the tenancy will be assured.[29]

Find out more about agricultural occupancies.

A tenancy that consists of an agricultural holding as defined by the Agricultural Holdings Act 1986, and which the person in control of the farming occupies, whether tenant or agent, cannot be assured.[30]

A tenancy granted to a student who is pursuing, or intends to pursue, a part-time or full-time course at a specified educational institution cannot be assured. The tenancy may be granted by the educational institution itself or by another specified housing provider.[31]

The Secretary of State has issued regulations to specify the educational institutions and the housing providers – these include universities, polytechnics, some higher education establishments; the housing providers include private registered providers of social housing and housing associations.[32]

A tenancy whose purpose is to give the tenant the right to occupy for a holiday is not assured.[33]

A tenancy granted by a resident landlord cannot be assured.[34] There are certain conditions that need to be fulfilled before the resident landlord exception is established:

• the landlord granting the tenancy must have been an individual (ie not a company) and must have occupied (and continued to occupy throughout the tenancy) the property as their only or principal home

• if there is a change of landlord, the new landlord must also be an individual and continue to occupy the property as their only or principal home; the exception to this is that periods of non-residence are allowable following the sale of the premises or death of the landlord[35]

• if the building is not a purpose-built block of flats, the dwelling-house must constitute only part of that building, and the landlord must occupy another dwelling in the same building

• if the building is a purpose-built block of flats, the dwelling-house let to the tenant must form part of one of the flats, and the landlord must occupy another part of the same flat as the tenant

If the occupier also shares living accommodation with the resident landlord, they are excluded from the Protection from Eviction Act 1977. Living accommodation includes a kitchen, living room or bathroom but not storage areas, stairways and hallways.

An excluded occupier can be evicted without a court order once their tenancy or licence has come to an end.

When a landlord let out a bedroom in a flat but keep another bedroom locked for themselves, and keep paying their share of bills and council tax living in the property sporadically, it is arguable that they are a resident landlord and the tenant is an excluded occupier (lodger). A lodger agreement could be a sham agreement if the landlord is not resident in the property immediately before the agreement starts and when it ends.

If the occupier does not share living accommodation with their resident landlord, they are an occupier with basic protection. The landlord must issue a claim for a possession order and apply for warrant of possession to evict the occupier.

Tenancies where the interest in the land belongs to the Crown or a government department cannot be assured.[36]

Two exceptions to this are:

• where the interest is managed by the Crown Estate Commissioners

• lettings after 1 April 1991 by health authorities and NHS trusts

Both of these can be assured tenancies.[37]

Tenants of the Duchy of Lancaster or the Duchy of Cornwall do not come within the definition of Crown tenants. Both Duchies may grant assured tenancies.

Where the Crown Estate Commissioners transferred its housing stock to a housing association after 15 January 1989, the High Court held that those of its tenants who were Rent Act regulated tenants became assured tenants of the housing association.[38]

Tenancies granted by the following bodies[39] cannot be assured:

• local authorities

• the Commission for New Towns (abolished 1 April 2009)

• the Development Board for Rural Wales

• urban development corporations

• development corporations

• waste disposal authorities

• residuary bodies

• fully mutual housing associations

• housing action trusts

A tenancy granted by a private landlord[40] under arrangements for the provision of support for asylum seekers or dependents of asylum seekers made under Part 6 of the Immigration and Asylum Act 1999 cannot be assured.[41]This includes accommodation provided under UKVI asylum support.

This provision does not prevent asylum seekers from entering into assured tenancies if they are making their own arrangements. The ordinary law relating to possession claims in respect of tenants who are asylum seekers applies as it does to other tenants.[42]

Tenancies secured under an arrangement with a private landlord by a local authority carrying out the following homelessness functions normally cannot be assured:[43]

• interim accommodation pending inquiries

• temporary accommodation under the full housing duty where it is the same as the interim accommodation provided pending inquiries

• temporary accommodation where the applicant is being referred to another authority

• temporary accommodation to an applicant who has been found to be intentionally homeless

• temporary accommodation provided under the authority’s discretionary power pending a homelessness review or appeal

The accommodation secured by the local authority will become assured (or assured shorthold) where 12 months have passed since the:[44]

• local authority made its decision on the homelessness application

• decision on review or an appeal was finally determined

Temporary accommodation will also become assured if the landlord serves notice on the tenant that the tenancy is to be regarded as an assured tenancy.[45]