Here is a question to the blog clinic from Gerry
What rights does a tenant have where a residential property was rented out 40 years ago on a verbal agreement.
The Tenant has paid rent on time during the years of the ‘tenancy’.
The Landlord has sold surrounding land plus the land, on which this is the only property,subject to planning permission.
Is there any obligation on the Landlord to re-house the Tenant given the 40 year tenure and the fact there is no legal agreement in existence between the parties?
Does the law imply a Tenancy agreement existed and treat the tenant in the same way as if a legal tenancy existed and if so,what rights if any does the Tenant have?
There is no need to put the word tenancy in inverted commas.
This is a proper tenancy – and as the tenant has lived there since 1975 it will also be a protected tenancy where the tenant has extra strong rights.
The legal agreement
So far as the ‘legal agreement’ point is concerned, under the Law of Property Act 1925, you do not need a written tenancy agreement to create a legal tenancy where the tenancy has a term of 3 years or less.
Which means that if a tenant just moves in and starts paying rent, a tenancy will be created automatically. The term would depend on how rent was paid – so if it was paid weekly, a weekly tenancy would be created and if it was paid monthly, a monthly tenancy would be created, etc.
This will be a periodic tenancy and will just run on until it is ended. In this case for over 40 years.
Protected tenancy – the tenant’s rights
As this tenant moved in, in 1975 the tenancy will almost certainly be governed by the Rent Act 1977 (which consolidated the earlier legislation). Under this act, tenants obtained a ‘protected tenancy’ which continues even if the contractual tenancy is ended by a Notice to Quit.
The statutory regime under the Rent Act is very different to that under the Housing Act 1988 which applies to tenancies created today. For example tenant’s rent is regulated under the ‘fair rent’ system .
Protected tenancy – getting possession
The only way this tenancy can end (other than by the tenant agreeing to move out) is by getting a court order. However, this is not easy as the no fault section 21 procedure does not apply to Rent Act tenants.
Often it is not possible to evict them at all – which is why you need to be careful about buying an investment property at a suspiciously low price – you may be unable to get vacant possession to develop it.
If the tenant is not in arrears of rent, then your best chance of getting the property back is by providing the tenant with ‘suitable alternative accommodation’.
However, this can’t be any old property – it must be of a similar tenure (ie another protected tenancy) and be suitable for the tenants needs. You need to take legal advice before doing anything (eg buying the alternative property to move the tenant to) as there is a string of case law to consider.
I managed to recover a property for a client on this basis in about 2003, but it was not a cheap exercise.