Non-Housing Act 1988 Tenancies

Published on 2015-07-16

The Housing Act 1988 excludes certain types of lettings from the provisions offered to tenants by assured tenancies and ASTs. There is no Act of Parliament directly covering these tenancies but common law and contract law do give some structure.

Law of Contract Agreements

If a tenancy is not a Housing Act 1988 tenancy, the agreement will simply be non-Housing Act tenancy agreement. They are contracts, recognised in court to which none of the Housing Act 1988 provisions apply.

Types of Non-Housing Act Tenancies

Lettings to Companies

This includes leases of residential properties to companies registered at Companies House, registered charities and trusts. The company is the tenant and pays the rent. The permitted occupiers live in the property under licence from the tenant (the company).

Holiday Lets

Usually for just a few weeks and for a property which is not a main residence, for tax purposes, a holiday let must meet a number of conditions e.g. it must be available for commercial letting to the public for at least 210 days per year in total.

Lettings by Resident Landlords

A tenant will be sharing with a resident landlord where the landlord lives in another part of the property and the property is the landlord’s only or main home. The landlord does not have to share any accommodation with the tenant to be a resident landlord and the property must be originally constructed as one unit. If a landlord lives on the premises and rents out a single room, the occupant would be a licensee.

Rents Over £100,000 a Year

Rents of this amount are mainly found in London and the south-east of England. The rent must consist of ‘pure rent’ only i.e. excluding utilities even if the cost of them is included in the rent. Such tenancies are contractual.

Not the Tenant’s Main or Principal Home

If a property is not the tenant’s main or principal home, the tenancy falls outside of the Housing Act 1988.

Premium Leases

A premium lease is created when a tenant purchases the lease for the term of the tenancy, which must exceed two years. The terminology used is ‘lease’, ‘lessor’ and ‘lessee’. The money (equivalent to the rent for the complete term) is paid in advance and is known as the premium. Neither party can have a break clause and there is no refund of rent if the lessee decides to leave the property before the end of the term. In addition to the premium there is a nominal rent payable if demanded, often referred to as a peppercorn rent. A premium lease, often a letting to a company, is considered a contractual tenancy.

Note that paying the full rent in advance for a six or 12 month AST would not be classed as a premium lease.

Other non-Housing Act 1988 tenancies may include agricultural tenancies, lets to students by educational institutions or lettings by Crown landlords. Agricultural properties have special provisions and are often similar to service tenancies that can be ended if the related employment ends.

The Rent Act 1977

The Rent Act 1977 created tenancies where the tenant had a high level of security of tenure, succession rights and paid a fair rent. Fair rents are usually well below market rents and rises are capped by the Rent Acts Order 1999.

Categories: Residential Lettings Legal Aspects of Lettings