Tenancies excluded from Rent Act protection

No new regulated tenancies can be created on or after 15 January 1989 (the commencement of Part 1 of the Housing Act 1988). Tenancies created after this date are assured or assured shorthold tenancies.

The Rent Act 1977 can protect a new tenancy in cases where:[1]

• the contract for the tenancy was made before the 15 January 1989

• 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

• 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

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 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.

Tenants of resident landlords are excluded from full Rent Act 1977 protection. In order to be resident, the landlord must:[7]

• live in the same building as the tenant

• occupy the premises as a residence; it does not have to be their only or principal home

• 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 they usually have had a restricted contract 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 they are an occupier with basic protection.

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 minimis 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 is a licence. A tenancy with attendance is either 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.

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.

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]

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 is protected.

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.

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.

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 are excluded by being business premises.

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.

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.

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, including by stock transfer, they automatically become 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.[17]

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.

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.