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Tenancies excluded from protection

This content applies to England

This page looks at tenancies that are excluded from the protection of the Rent Act 1977.

Tenancies granted on or after 15 January 1989

No new regulated tenancies can be created on or after 15 January 1989 (the commencement of Part 1 of the Housing Act 1988). Such tenancies will be assured or assured shorthold tenancies. For further information, see the section on Assured tenancies and the section on Assured shorthold tenancies. However there are three limited circumstances where the Rent Act 1977 can protect a new tenancy:[1]

  • the contract for the tenancy was made before the 15 January 1989
  • the tenancy is granted to a person who, immediately before the tenancy was granted, was an existing regulated tenant of the same landlord.[2] The expression 'immediately before the tenancy' is to be given its ordinary meaning, and be restricted to those cases where the tenancy took effect immediately before the new tenancy was granted. An interval of 24 hours has been held to be sufficient to prevent the tenant from being protected.[3] If there are joint landlords or joint tenants this would still apply even if only one of the landlords/tenants is involved in the new tenancy. The tenancy need not be of the same premises
  • the new tenancy is suitable alternative accommodation offered by the landlord to a regulated tenant after obtaining a possession order and the court had directed that the Rent Act 1977 should protect the alternative accommodation.

Tenancies with high rateable values or high rent

Tenancies whose rateable values on 23 March 1965 (the 'appropriate day') exceeded the following limits are excluded from Rent Act 1977 protection.[4] If the property was not on the valuation list on 23 March 1965, the 'appropriate day' is when the dwelling first appeared on the list. The rateable value limits are as follows (the higher of the two figures is for Greater London):

  • where the appropriate day is before 22 March 1973, tenancies are excluded if their rateable values exceed:
    • (a) £400 or £200 on the appropriate day and
    • (b) £600 or £300 on 22 March 1973 and
    • (c) £1,500 or £750 on 1 April 1973
  • where the appropriate day is on or after 22 March 1973 but before 1 April 1973 the limit is (b) and (c) above
  • where the appropriate day is on or after 1 April 1973 the limit is (c) above.

Where a Rent Act 1977 protected tenancy is created after 1 April 1990 (these can only been created in limited circumstances listed above) the rateable value limit is replaced by a rent limit of £25,000 per year. For the definition of 'rent', see Tenancies at low rent below.

Information on rateable values may be obtained from the finance department of the local authority, or possibly from a library archive.

Tenancies at a low rent

Tenancies with no rent or where the rent is less than two thirds of the rateable value on the 'appropriate day' are excluded from protection.[5]Although the rateable value is fixed at the appropriate day, the rent level to be compared is the current level. Tenancies can therefore fall in and out of protection if rent increases or reductions take the rent above or below the rateable value limits.

The Rent Act 1977 defines 'rent' as the total payment made by the tenant to the landlord and therefore can include payments for rates, services, repairs, maintenance and insurance except in the case of tenancies exceeding 21 years where these items are expressly mentioned in the lease.

Special rules apply to old controlled tenancies with low rents to enable them to have full Rent Act 1977 protection.[6]

In the case of Rent Act 1977 protected tenancies created after 1 April 1990 (which is only possible in the circumstances listed above), the rateable value limits are replaced by an minimum annual rent level of £1,000 for Greater London and £250 elsewhere.

Resident landlords

Tenants of resident landlords are excluded from full Rent Act 1977 protection. In order to be a resident landlord, the following conditions must be satisfied, s/he:[7]

  • must live in the same building as the tenant
  • occupy the premises as a residence; it does not have to be her/his only or principal home
  • must have resided in the premises at the start of the tenancy and continuously throughout.

Exclusions

A landlord living in a separate flat in the same purpose-built block is not a resident landlord.[8]

An unfurnished tenancy that began before 14 August 1974 has the protection of the Rent Act 1977 if there is a resident landlord and the tenant does not share living accommodation with the landlord.[9]

Status of tenants

If the tenant shares living accommodation with the resident landlord s/he will usually have had a 'restricted contract' (see the section on Restricted contracts) but are likely to have become an excluded tenant following the introduction of the Housing Act 1988. If the tenant does not share living accommodation with a resident landlord s/he will be an occupier with basic protection. See the section on Occupiers with basic protection/excluded occupiers for more information.

Board and attendance (services)

A tenancy is excluded if the rent includes payment for board, or if a substantial amount of the rent can be shown to be attendance (services). Therefore no tenancy with board can be protected by the Rent Act 1977, unless the de minimus principle applies (the amount of board is negligible). A tenancy with board will be a restricted contract unless the board is substantial in which case it will be a licence. A tenancy with attendance will either be protected or a restricted contract depending on the amount of attendance. Board can mean the provision of one meal although it has been held that a morning cup of tea is insufficient to exclude the tenancy from protection.[10] Meals need not be cooked but there must be more than the provision of groceries. Attendance is the provision of services that are personal to the tenant. It cannot include central heating or the cleaning of common parts, it does include cleaning of the tenant's room and laundry.

Dwelling houses let with other land

A dwelling house that is let with other land is excluded from protection. Land that is less than two acres and is not agricultural is treated as part of the dwelling house. In addition, where a property is let with land where the house is secondary to the main purpose of the letting, it will be excluded. In both these cases the house and land need not be let in the same document.

Student lettings

A letting by a specified educational institution to someone who is a student or is intending to become a student at a specified educational institution is excluded. The institutions are specified by the Secretary of State and include universities, polytechnics and some other higher education establishments.[11]

Holiday lettings

A tenancy is excluded if it only gives the tenant the right to occupy the dwelling house for a holiday. The Rent Act 1977 gives no definition of 'holiday' but in order to cover working holidays the courts have held that it is a suspension of one's normal activities rather than a period of recreation.[12] There have been many cases of sham holiday lettings. If a tenant can prove that an agreement for a holiday let does not correspond with what both the landlord and tenant knew to be the purpose of the letting, then it will be protected.

Agricultural holdings

A tenancy of an agricultural holding defined by the Agricultural Holdings Act 1986 and occupied by the person in control of the farming, whether tenant or agent, cannot be protected by the Rent Act 1977.

Business premises

A tenancy to which Part 2 of the Landlord and Tenant Act 1954 applies will not be protected by the Rent Act 1977. This covers any tenancy where the property is occupied for the purpose of a business (apart from a 'home business tenancy' - see below). The business use must be a significant, not incidental, reason for occupation.

'Home business tenancies'

For Rent Act protected tenancies created on or after 1 October 2015, where the landlord permits the tenant to operate a 'home business', this will not result in a business tenancy regulated under the Landlord and Tenant Act 1954, so the tenancy can remain Rent Act protected.[13]

A 'home business' is one that can reasonably be carried on at home such as internet businesses, financial consultancy, advertising copywriting, or a translation service.[14] A landlord should not withhold consent to a 'home business' unreasonably, but may do so if the business would result in significant wear and tear to the property, or cause a nuisance to neighbours.

Licensed premises

A tenancy that comprises of premises licensed for the sale of intoxicating liquor for consumption on the premises, is not protected by the Rent Act 1977. (Since 1 January 1991, new tenancies of licensed premises are protected by the Landlord and Tenant Act 1954).[15] Off-licences, although not excluded under the category will be excluded by being business premises.

Parsonage houses

The Rent Act 1977 does not protect houses provided by the Church of England for its incumbents. This exemption does not apply to assistant curates or ministers of other religions although there is a ground for possession for such cases.

Crown lettings

If the interest of the landlord belongs to the Crown or a Government department, then any tenancy cannot be protected by the Rent Act 1977. However this does not include tenancies of the Crown Estate Commissioners or tenancies of the Duchies of Lancaster or Cornwall.

Excluded landlords

The following landlords are exempt from creating Rent Act tenancies:[16]

  • local authorities
  • housing associations
  • cooperative housing trusts where the local authority has granted the cooperative a lease of some of its housing stock (only possible until January 1987)
  • charitable housing trusts
  • the Commission for New Towns (abolished 1 April 2009), new town and urban development corporations
  • the Development Board for Rural Wales, residuary bodies and housing action trusts.

Where a Rent Act tenant becomes a tenant of a private registered provider of social housing (PRPSH) landlord (ie if a registered social landlord takes over stock from a private landlord), s/he automatically becomes a housing association tenant with the statutory protection of a Secure tenancy under the Housing Act 1985.

A secure housing association tenant also has the right to a fair rent fixed by a rent officer. See Secure tenancies in the section on PRPSH and housing association landlords.[17]

Shared ownership leases

Where a tenant has acquired a shared ownership lease under the right to buy provisions of the Housing Act 1985, or has been granted a shared ownership lease by a housing association, then the tenancy part will not be protected by the Rent Act 1977.

Home office 'no right to rent' notice

Where the Home Office serves a disqualification from renting notice (under section 33D(2) of the Immigration Act 2014) on the landlord in respect of all of the occupiers in premises held on a Rent Act protected tenancy, the tenancy is converted into an excluded tenancy[18], and the landlord may serve no less that 28 days' notice (on a prescribed form) to evict. See the page Right to rent immigration checks for details.

[1] s.34 Housing Act 1988.

[2] s.34(1)(b) Housing Act 1988.

[3] Bolnore Properties v Cobb (1996) 29 HLR 202; Truro Diocesan Board of Finance Ltd v Foley [2008] EWCA Civ 1162.

[4] s.4 Rent Act 1977; s.25(3) Rent Act 1977 for a definition of the 'appropriate day'.

[5] s.5 Rent Act 1977.

[6] Sch.17, para 5 Rent Act 1977 as amended by Housing Act 1980, Sch.25, para 59.

[7] s.12 Rent Act 1977.

[8] s.12(1)(a) Rent Act 1977.

[9] para 6, Sch 24 Rent Act 1977.

[10] Wilkes v Goodwin [1923] 2 KB 86.

[11] Assured and Protected Tenancies (Lettings to Students) Regulations 1998 SI 1998/1967, as amended from time to time.

[12] Francke v Hakmi [1984] CLY 1906.

[13] ss.35 and 36 Small Business, Enterprise and Employment Act 2015; Small Business, Enterprise and Employment Act 2015 (Commencement No.2 and Transitional Provisions) Regulations 2015 SI 2015/1689; Small Business, Enterprise and Employment Act (Commencement No.1) (Wales) Regulations 2015 SI 2015/1710.

[14] s.43ZA Landlord and Tenant Act 1954 as amended by s.35 Small Business, Enterprise and Employment Act 2015; see also section C3(2) of the Model Agreement for an Assured Shorthold Tenancy, DCLG, October 2015.

[15] Landlord and Tenant (Licensed Premises) Act 1990.

[16] ss.14-16 Rent Act 1977.

[17] s.35(5) Housing Act 1988.

[18] (from 1 December 2016) s.3A(7D) Protection from Eviction Act 1977 inserted by s.40(5) Immigration Act 2016.

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