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May 3, 2024WYN Legal recently acted for a landlord of a residential, Assured Shorthold Tenancy (“AST”).
The landlord informally and verbally granted tenancy to two tenants who were friends or acquaintances. Rent arrears accumulated, leading the landlord to decide to evict the tenants in accordance with the 1988 Housing Act, as amended (“The Act”).
Since the usual legal formalities for an Assured Shorthold Tenancy (AST) were not followed, the landlord couldn’t use the no-fault ground for possession under Section 21 of the Act. Instead, due to rent arrears, the landlord issued a notice to end the unwritten tenancy under Section 8 of the Act. This relied on both “mandatory” (Ground 8) and “discretionary” (Grounds 10 and 11) grounds. The relevant grounds can be found in Schedule 2 of the Housing Act 1988 at legislation.gov.uk.
At the court hearing, issues arising from the lack of a written Assured Shorthold Tenancy (AST) were highlighted:
- Statutory interest on arrears was refused as there was no written agreement. The court typically allows interest based on contractual terms in a written AST, but without such an agreement, no interest was awarded.
- Similarly, without a written agreement on tenants covering the landlord’s costs, only a nominal contribution towards costs was allowed.
- A tenant argued that due to the absence of a written agreement, traditional methods of serving the Section 8 Notice, like postal delivery or direct delivery to the property’s letterbox, couldn’t be used. They insisted the Notice had to be handed directly to them, which was difficult since one tenant couldn’t be located at the property. However, the court inferred that the Notice was properly served by being posted to the address. Even if this inference was incorrect, the court indicated it would have waived the need for formal service of the Notice, meaning the landlord couldn’t rely on the mandatory ground under Section 8. Given the substantial rent arrears, the court would have granted a possession order based on discretionary grounds regardless of the service method of the Notice.
The lesson here is clear: ensure all formalities are met, and have a legally sound, written tenancy agreement. Seeking legal advice before finalising any arrangements is always prudent, especially when dealing with friends or acquaintances.
