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Question Title: Which agreement
| Question: 43 |
| We have a client who has a vacant property and is prepared to offer it to a friend who is also an employee, for a nominal rent. However, the landlord wants to set up the tenancy on a formal basis. In order to give him some form of protection the landlord would like to set up an assured shorthold tenancy(AST). We are aware that there is a maximum figure to which an AST cannot be applied but is there a minimum and can an AST be created for an employee ?
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| Answer: |
| Firstly, your landlord is correct in trying to formalise the letting. In such situations, friendships can sometimes deteriorate and employment cease. Regarding setting up an AST, you are correct that there us a maximum rent under such tenancies - this is £25,000 per annum. Tenancies at low rent or no rent are also excluded. Under the Housing Act 1988, the low rent limit is currently £250 a year (£1000 a year in Greater London) for tenancies granted after 1 April 1990. Tenancies where the tenant is an employee of the landlord are normally permitted to be assured shorthold, and the Act even provides specific possession grounds which apply in such cases. Thus Ground 16 (sch. 2, Housing Act 1988) allows the landlord to recover possession of property where the tenant was employed by the landlord but the employment comes to an end. However, an order for possession under this ground is discretionary and will depend on the court being satisfied that it is reasonable to make such an order. Alternatively, the accommodation could be provided by way of a licence (and not a tenancy) - this is called a service occupancy - and occurs where accommodation is provided for an employee, and occupation of the property is necessary or essential for the performance of his duties.
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References:
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Pages:
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Hyperlinks:
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Letting Handbook |
Chapter 6 |
letting-handbook-and-factsheets.html
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For more information, discuss on the Forum
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