Since the introduction of The Housing Act 1988 all new tenancies from 15 January 1989 became assured or assured shorthold tenancies unless they came within one of the exceptions set out in Schedule 1 of the Act.
If the single annual rental threshold was more than £25,000 then the tenancy was exempt under Schedule 1 of the Act.
From 1 October 2010 under the above new legislation this will change from £25,000 to £100,000. This change affects England only.
The legislation will affect tenancies that are already in place before the 1 October and any that has a rent for more than £25,000 but less than £100,000 will automatically convert to an assured shorthold tenancy.
What does this mean for Landlords?
Firstly tenancy deposits will need to be protected in accordance with the Housing Act 2004 and Landlords will have to give two months notice under s21 Housing Act 1988 to terminate the tenancy.
There will be potential problems that will occur and it will be issues that the courts will have to decide. For example:
(a) If a tenancy ends shortly after 1 October there may not be enough time to serve a s21 notice or if a s21 notice was served before 1 October is it valid as technically the tenancy wasn't an assured shorthold until 1 October?
(b) If court proceedings are issued before the 1 October for breach but a hearing has not been set down until after 1 October could a Tenant argue that the appropriate notices haven't been served?
We would like to think that the courts will take a pragmatic view but until we see some cases go through the courts it would be wise to take advice on individual cases.
If you would like more information please do not hesitate to contact us here at the Hertford Branch.
Director and Head of Arrears Management