The Legality of the Tenancy - Essay Example

LAND LAW: A CASE STUDY 28th November, Introduction In this paper, I have referred to the land laws to provide advice to a client, Joan, who is interested in buying a townhouse from its current owner, Peter. The Land Registration Act (2002) governs how land is registered in the UK, the rights of individual parties when transacting with a piece of land, and encourages voluntary registration of land. Background Peter, a resident of Southpool owns a townhouse. However, he wishes to move into the countryside and decides to give up the townhouse for renting. He thereby converts the houses into flats, and rents the houses to several individuals, who rent jointly or on individual basis. Part of the agreement signed with the tenants reads that he is not intending to create a tenancy. However, Peter signs documents detailing his relationship with the new occupants of the flats. He then considers selling the townhouse, and gets a suitable buyer in Joan. For Joan to purchase the townhouse, matters of the relationship between Peter and the current occupiers of the house are vital and she must evaluate them conclusively, concurrently projecting patterns of actions in view of legal inhibitors and enablers. In this paper I have looked deeply into the relationship between Peter and the existing tenants of his property, in order to establish whether, indeed, there is no effective tenancy agreement between him and the “occupants” as the agreement detailing their relationship deemed. Further, details of the types of tenancy available to Peter at the time he signed the agreements with the tenants and the implications they have are discussed. The fact that the townhouse is a freehold puts to rest any matters about eligibility of the sale, especially considering that no details of mortgages/ loans, or joint ownership are provided. Such matters would likely complicate the sale process. Evaluation of Joan’s Right to Evict the Tenants (Present Occupiers of the Townhouse) To begin with, Joan needs to study and establish the legality of the agreements signed between Peter and the present occupiers of the house. But before she can recover any documents from the seller, she has substantial background to base her claim to either evict or not to evict the tenants. In this part, I have provided enlightening notes on the types of tenancy available to the present occupiers, and the implications of each to the buyer in her pursuit for their eviction. In the pursuit of her right to evict the tenants, Joan needs to understand the types of tenants that she will be dealing with, and how much protection they have under law. Legality of the Tenancy In establishing whether a tenancy really exists between a “landlord” and an “occupant”, the law has specific provisions that serve as guides to answering the question. The Private Tenants Order (2006) provides clarifications into what entails a tenancy. According to the act, a tenancy exists in the event that one party is entitled to receive payments from the other as compensation for living in a property the former either owns, manages, or sublets. Several other factors are used to back up evidence for the existence of a tenancy. For instance, if the persons/ party who receives payments for receiving such payments is partly or wholly responsible for maintenance and ensuring the comfort of the occupant, the law deems that these services are provided as part of the tenancy agreement. Additionally, the tenant reserves the right to privacy, despite residing on other’s property. In the case of Peter, there is one concern around this provision. He retains one of the keys to Belle’s flat, despite promising that he was not intending to provide certain services spelled out in the agreement, and which would require him to enter the house in her absence. This situation creates a different type of relationship – one that violates the rights of the occupant. The law is clear about the rights of each party to a tenancy agreement: each party has the basic minimum rights that cannot be violated. This implies that the rights of others cannot subject the occupant to lesser treatment than outlined in law. Some of these provisions include the right to privacy, right security and safety, and right to fair charges. In view of the first and more defining clause, the fact that each of the occupants is entitled to basic service provision from Peter and each pays him for letting them into his flats, then there is a legally existing tenancy agreement between him and the occupants. Furthermore, the last contract signed (with Belle) clearly states that Peter intends to provide services to the rented flat. In law, any written agreement supersedes a verbal agreement in the determination of the legality of a covenant among parties. That serves to further confirm that Belle effectively enjoys the right to have her house well maintained in the course of her tenancy. It is further proof to the existence of a landlord-tenant relationship. As such, any considerations should be made from the viewpoint of rental houses other than private residence. Consequently, the clause in the agreement stating that Peter does not intent to establish a tenancy is null and void in law. Consideration for Evicting the Current Occupants The type of tenancy enjoyed by the current tenants is the main determining factor of whether Joan is entitled to evict them. However, it is imperative to learn the basics before considering any type of eviction. For instance, Joan has to be introduced to the tenants as the new owner of the property. This is enshrined in the law, which provides that tenants have the right to know their landlord. Once she has been introduced, she may then evaluate the agreements signed between the occupants and the exiting landlord. The law governs different types of tenancies differently. The main types of tenancy are assured shorthold tenancy (AST), periodic tenancy, and assured tenancy. Joan will need to evaluate the details of the agreements between Peter and the tenants in order to rightly classify the tenancies. Assured Shorthold Tenancy This type of tenancy includes a clause in the tenancy agreement stating the length of time within which the renter is expected to stay in the rented premises. In the event that the stated period expires, the parties may consider signing a new time-bound agreement, or simply continue without one. Effectively, the type of tenancy ceases to be AST and becomes periodic (covered below) in case the parties continue without signing an agreement. The parties may also opt to change the nature of the tenancy to any other upon expiration of the initial one. In order to establish whether Peter and any of the current tenants have an AST in place, Joan needs to check whether the agreements have the “time” clause. If any or all of the agreements have the said clause, Joan will have the express right to reclaim the houses after the expiration of the stated time periods. In most cases, tenancy agreements for residential property provide for six to twelve months of an AST relationship. Further, she will need to study the agreement to establish whether the agreements have any provisions for repossession. In the case such a provision was signed, she will then issue eviction notices, which must be made at least two months prior to the actual vacation date. If she finds that the eviction dates coincide with the expiration of the existing agreement, she only needs to notify them that there will be no room for renewal of the agreement. In the event no provisions for pre-term eviction were made, it implies that the tenants’ occupancy ends at the end of the occupancy period, and there is no way that Joan can serve them eviction notices as provided in law. The occupants’ security of tenure ends at the end of the stipulated period. Periodic Tenancy This type of tenancy exists where there is no agreed period for the tenant to stay at a given premises. It may also result from the behaviour of the parties at the expiry of an assured shorthold tenancy. If the parties fail to sign renewal documents but the tenant continues to pay for subsequent stay, the agreement automatically translates into a periodic one. In case any of the current tenants have issued notices to vacate the premises (usually one month prior to leaving), Joan will simply need to honour the notice and wait for the tenant to leave. However, in case none of the tenants has yet to provide such notice, she will need to provide a two-month notice for the tenants to vacate their flats. Periodic tenancy makes it simple for the landlord to issue eviction notices than both the AST and assured tenancy. It presents the best case scenario that Joan can hope for. Assured Tenancy It is the most complicated of the three types of tenancy, and would present the worst case scenario for Joan. Under this type of tenancy, the tenant reserves the right to choose when to leave the premises. In the event that the landlord desires to evict the tenants, they need to establish adequate grounds for gross violation of terms of agreement. Issuing a notice to the tenants does not provide grounds for them to consider vacating the premises, unless their avenues to contest allegations of gross violation are exhausted. Joan cannot evict the tenants if they signed an assured tenancy with Peter. She is bound to honour the existing relationship in accordance with the law and terms of agreement. Conclusion A review of the agreement between Peter and the existing tenants shows that there is, indeed, a tenancy relationship between the parties. Therefore, Joan acquires the property as a rental property. That does not, however, override her right to convert the property to a private residence as it was before Peter decided to rent it out. Joan reserves the right to evict the tenants in case their tenancy agreements are either assured shorthold or periodic. However, her right to evict the tenants is vacated in the event Peter signed an assured tenancy with any of them. Bibliography Ball, Michael. 2010. “The UK Private Rented Sector as a Source of Affordable Accommodation.” Reading: Joseph Rowntree Foundation. Cafaggi, Fabrizio. n.d. “Tenancy Law and European Contract Law.” Retrieved from http://www.eui.eu/Documents/DepartmentsCentres/Law/ResearchTeaching/ResearchThemes/EuropeanPrivateLaw/TenancyLawProject/TenancyLawCafaggi.pdf. Douglas, Gillian, Julia Pearce and Hilary Woodward. 2007. “A Failure of Trust: Resolving Property Disputes on Cohabitation Breakdown.” Cardiff: University of Bristol. Heath, Sarah. 2014. “Rent Control in the Private Rented Sector (England).” Note SN/SP/6760. Stone, Michael E. 2003. “Social Housing in the UK and US: Evolution, Issues and Prospects.” London: Atlantic Fellowship in Public Policy. The Law Commission. 2011. “Making Land Work: Easements, Covenants and Profits a Prendre.” London: The Stationary Office. The Law Commission. 2013. “Renting Homes in Wales.” London: TLC. Wharton, Nathalie and Lucy Cradduck. 2011. “A Comparison of Security of Tenure in Queensland and in Western Europe.” Monash University Law Review, 37(2): 16-46. Read More