Ruling brings clarity for landlords

Brokers say a recent Court of Appeal ruling on standard rental agreements provides clarity and will help avoid costly legal battles.

The case related to tenant Miss Taylor, who took out an assured shorthold tenancy agreement in February 2006 for a property in Chesterfield with landlord Mr Spencer.

Spencer served notice on Taylor in October 2011, but Taylor challenged whether she had been given proper notice.

The case came before the court last November, with the judge ruling in Taylor’s favour. But the Court of Appeal has now ruled in Spencer’s favour, stating that  for rolling contracts following an assured shorthold tenancy, landlords can choose when the two months starts.

It was previously thought that under section 21 of the Housing Act 1988, landlords had to serve notice of possession starting from the beginning of the next period of tenancy. For example, if rent is payable on the first of the month and notice is served on the second, it was thought the two-month notice period would not begin until the the first of the next month. The Court of Appeal has now ruled this is not the case.

Trinity Financial product and communications manager Aaron Strutt says: “This will not affect most private landlords who have smaller holdings but professional landlords who have a lot more tenants will definitely be boosted by this news.

“At that level of operation, property management firms should be looking after these kind of issues but a lack of diligence can result in a big financial costs and penalties. This should help ease that problem.”

Coreco director Andrew Montlake says: “A grey area has been cleared up here and for landlords with large portfolios that could be hugely beneficial.

“The clarity this judgment gives for both landlords and tenants should help avoid those situations where there is a dispute about whether a landlord is acting within the law.”

Article courtesy of Mortgage Strategy

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