Pictured above: David Hollingworth
Local law firm Andrew & Co LLP is urging residential
landlords to check their position, following a change in law that
has seen the maximum rent level for assured shorthold tenancies
quadruple to £100,000.
Previously, only tenants with annual rents of up to
£25,000 had security of tenure. The change came in in October
and applies to existing tenancies as well as to new ones, giving
some tenants security of tenure for the first time. Tenants will be
granted assured shorthold tenancy security if their agreement dates
from March 1997 and here the landlord can recover possession once
the fixed period of the tenancy has expired by giving the tenant at
least two months' notice.
More controversially, a tenancy that was granted before 1st
March 1997 at a rent between £25000 and £100,000 will
now become an assured tenancy, which may hit some landlords as they
can only recover possession if they can establish that certain
grounds apply.
The changes, which apply only in England, came in on 1st
October, and any new residential tenancy of premises in England
granted to an individual at a rent of up to £99,999 will be
an assured shorthold tenancy by default.
Said property expert David Hollingworth of Andrew & Co LLP
solicitors in Newark: "The original threshold of £25,000 was
set in 1990 so if this figure had been raised in line with
inflation, the threshold would now be around £52,000. The
£100,000 threshold shows how keen the government is to bring
all residential tenancies under the umbrella of security of tenure,
especially in London."
He added: "The retrospective effect will be detrimental for
landlords who have been letting their property to the same tenant
for many years, but it seems to be seen as minor collateral
damage".
New tenancies and tenancy renewals will also be subject to the
statutory deposit protection scheme. Whilst this only applies to
deposits paid after 1st October 2010, or on tenancies renewed after
that date, landlords are being recommended to adopt the scheme as
good practice for all deposits held.