Rent Income Over £25,000 per annum or to a Company and Your Landlord Rights Change says Letting Focus

One of the nice things about being a landlord right now (at least for those who bought the right type of property in the right place) is that rents are going up strongly.
Now, not a lot of people know this, but if the annual rental income is over £25,000 per annum or if it is let to a company, the let won’t be covered by a standard assured shorthold tenancy.
So what happens in these scenarios, which are increasingly common, these days?
Well, it’s actually a little involved which is why I kept it out of my book, Successful Property Letting and why even I had to check with the sage of landlord law, Tessa Shepperson at Landlordlaw.co.uk for the facts, but here goes…..
The history is that originally all tenancies were 'common law' tenancies – governed, funnily enough, by the common law.
Then, various acts of Parliament started introducing what are called “statutory codes” which governed how certain new sort of tenancies operated.
However these codes only covered certain new types of tenancy and pretty well any other type of tenancy which fell outside the codes were still governed by the 'common law'.
The main sorts of tenancies excluded from protection under the codes are and which are therefore covered by common law are as follows:
Company lets – i.e lets to limited companies - because the statutory codes are designed to protect 'individuals' only.
High rent lets - lets to tenants where the rent is over £25,000 per annum
Resident landlords - lets where a landlord has divided a large house into flats and lives in one of them. (Note - if the landlord shares living accommodation such as a kitchen and bathroom, the sharer will be a lodger not a tenant, and will have a license not a tenancy agreement)
So, what the difference between these “common law tenancies” and the Assured Shorthold tenancies?
Well, there are really just 2 main differences you need to know about…..
First, damage deposits will not need to be protected in one of the government authorised tenancy deposit schemes. These are required only for assured shorthold tenancies.
Second, the Accelerated Possession procedure is not available for landlords of common law tenancies
There are other differences too, but these are the main ones.
So, they you are – it’s nothing really to worry about.
In fact, as you won’t have to protect a deposit in one of the tenancy deposit schemes, there is arguably less to worry about and one less thing to remember to do.
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ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of property investment experts lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 3 years has been the UK’s top selling property title - buy the UK's top selling landlord book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert property journalist, property speaker and a well known property investment blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide landlords education
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property training programme at my website.What’s unique about lettingfocus.com is that we offer you help as an independent property investors coach because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week.
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