Have You Taken Ownership Of A Property With Sitting Tenants?

Image: Ricardo Gomez Angel/ripato/Unsplash
Image: Ricardo Gomez Angel/ripato/Unsplash

This article looks at some of the key considerations for the new landlord.

 

First and foremost, notice needs to be given pursuant to section 3 of the Landlord and Tenant Act 1985 (change of landlord) and pursuant to section 48 of the Landlord and Tenant Act 1984 (address for service).

Section 3 of the Landlord and Tenant Act 1985

A tenant has a right to know who their landlord is and who they need to pay rent to.

Under section 3, the new landlord must provide notice to tenants that their landlord has changed. Notice must be given not later than the next day on which rent is payable or, if that is within two months of the assignment, the end of that period of two months. There is no prescribed form, but it must confirm the name and address of the new landlord. The notice should be given even if the previous landlord has already provided the information to the tenant.

Tips for serving a compliant notice:

  • Notify the tenant(s) in writing that their landlord has changed (i.e. the AST has been assigned).
  • Provide the full address of the property and the tenant(s)’ name(s).
  • Provide the new landlord’s name and address (for a company per Companies’ House).
  • For landlord trustees, the address from which the affairs of the trust are conducted should be given.
  • Notice should be given in accordance with the requirements of the AST.
  • Notice must be served on all tenants

Haven’t complied?

Non-compliance carries serious consequences for both the previous and new landlord:

  • The previous landlord remains jointly and severally liable with the new landlord for any breach of the AST on their part until notice is given (the failure on the part of the new landlord to give notice would likely constitute a breach of any indemnity provided to the previous landlord at sale).
  • A new landlord’s failure to notify the tenant(s) of the assignment, without reasonable excuse, constitutes a summary offence and carries a fine of up to £2,500.00.

 

Section 48 of the Landlord and Tenant Act 1987

A tenant needs to know where to contact their landlord.

Under section 48, landlords are required to notify their tenants of their name and provide an address for service of any notices and proceedings. This is usually contained within the AST but is required where the landlord changes address or the property is sold to a new landlord. Again, there is no prescribed form.

Tips for serving a compliant notice:

  • The notice should provide the tenant(s)’ name(s) and the property address.
  • The notice should state the new landlord’s name and address.
  • The address and be their managing agent or a solicitor’ office.
  • Notice should be given in accordance with the requirements of the AST.
  • Notice must be served on all

Haven’t complied?

A landlord cannot legally demand charges under the AST until the notice is provided (and so this includes rent and service charges). This would therefore render any section 8 notice defective; because the absence of a section 48 notice would mean that the rent was not due.

For the avoidance of doubt, the obligation to pay rent is not suspended permanently and is rectified by service of a compliance section 48 notice. If in doubt, serve a section 48.

 

The benefits of serving valid notices

Whilst it goes without saying that there should be compliance, service of proper notices means:

  • Legal compliance.
  • Reduced risk.
  • Improved communications with tenants.

 

How can we help?

It is not uncommon for landlords to overlook these requirements. Anecdotally, we are aware that the requirements are often not raised during the conveyancing process when properties are purchased with sitting tenants.

Don’t get caught out – let us ensure you are a compliant landlord – Greenhalgh Kerr’s Housing Recoveries Team can provide general advice on and serve valid notices for you. Get in touch with one of our Key Contacts: https://www.greenhalghkerr.com/housing-recoveries/.

 

Kelly Evans, Senior Litigation Assistant

Greenhalgh Kerr
Olympic House, Beecham Court,
Smithy Brook Rd,
Wigan WN3 6PR

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+44 (0)333 200 5200

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