Residential Tenancy (Ending) Focus Note

B1 When can Managing Trustees terminate a tenancy during the fixed term?

There are very limited circumstances in which a landlord can terminate a tenancy during the fixed term. A landlord would have to rely on statutory grounds 2, 8, 10-15 and 17 set out in Schedule 2 of the Housing Act 1988 (the 1988 Act).  These are the only grounds that can be relied upon during the fixed term (being the agreed length of the tenancy set out in the tenancy agreement). Even then, the grounds can only be relied upon if the specific grounds are set out in the tenancy agreement itself (see paragraph 5.1 of the Residential Tenancy (Landlord) Template Clauses). The tenancy agreement should also confirm that the landlord must obtain a court order for possession before taking any steps to actually evict the Tenant.

B2 What are grounds 2, 8, 10-15 and 17 of Schedule 2 of the 1988 Act?

The grounds are set out in full on the government website but Managing Trustees are most likely to come across the following grounds;

• Grounds 8, 10 and 11 relate to non-payment (or persistent delays in payment) of rent. Ground 8 requires the rent to have been unpaid for specific periods, e.g. 2 months’ at the date of the hearing if rent is paid monthly, and is mandatory. This means that the court must make an order if the Managing Trustees can prove the ground applies. Grounds 10 and 11 are discretionary and there is no obligation to make an order in such cases, it is for the court to decide whether it is reasonable to make the order
• Ground 12 (discretionary) relates to breach of tenant obligations under the tenancy agreement – other than payment of rent
• Grounds 13 and 15 (discretionary) relate to deterioration of the condition of the property and furniture due to the tenant or others residing at the property
• Ground 14 (discretionary) relates to occupiers causing nuisance and being convicted
• Ground 15 (discretionary) relies on the tenant, or somebody acting on their behalf, having made a false statement to persuade the landlord to grant the tenancy

Managing Trustees should seek a solicitor’s advice before taking any steps to seek possession as it is important to ensure that the notice, timings and procedure followed are correct otherwise Managing Trustees could face losing the chance for obtaining possession and having to start the procedure all over again. Possession under s.8 of the 1988 Act  requires; (1) service of a prescribed notice asking for possession; (2) a court order for possession and (3) a warrant for possession.

C1 Why would Managing Trustees need to terminate after the end of the fixed term?

If Managing Trustees do not want to enter into a new tenancy at the end of the fixed term, then they need to take formal steps to end the current tenancy. To do this your agents or solicitors will usually advise you to follow the procedure under s.21 of the 1988 Act although they may also suggest using the procedure under s.8. Whilst a tenant may indicate that they are quite happy to leave at the end of the fixed term, formal notice should still be served.

Managing Trustees could also find themselves in situations where a fixed tenancy has turned into a periodic tenancy. This is where a tenant has been allowed to remain in occupation after the end of the fixed term without a new tenancy agreement having been entered into and the tenancy continues on a periodic basis by reference to how often rent is paid. Again, as the fixed term has ended, Managing Trustees’ letting agents or solicitors will usually advise them to follow the procedure under s.21 of the 1988 Act.

C2 How do Managing Trustees terminate a tenancy after the end of the fixed term?

It is strongly recommended that Managing Trustee seek independent legal advice, or the advice of their letting agent, to terminate the tenancy correctly. Managing Trustees may be advised to follow the procedure under s.21 of the 1988 Act. In short, this allows the landlord to serve at least two months written notice to end the tenancy. Under this procedure there is no need to prove any statutory grounds and no need to go to court to obtain a possession order (unless the tenant refuses to leave when the notice expires). It is important to obtain appropriate advice as following the incorrect procedure could mean that the Managing Trustees lose the right to end the tenancy and have to serve notice all over again.

The Managing Trustees may also be advised to follow the procedure under s.8 of the 1988 Act as well as or instead of the s.21 procedure. Sometimes Managing Trustees are advised to serve a s.8 notice if there are arrears of rent that they seek to recover in addition to obtaining vacant possession of the premises.

C3 What is the procedure under s.21 of the 1988 Act?

Managing Trustees should seek independent advice to ensure that the correct procedure is followed. Their advisers will explain that the procedure in England (but not Wales) is different depending upon whether the tenancy was entered into before or on or after 1 October 2015.

For tenancies entered into in Wales, and for tenancies entered into in England before 1 October 2015 only, a notice must be served on the tenant under s.21 of the HA 1988. There is no prescribed form of notice but Managing Trustees do need to ensure that the notice is served correctly.

For tenancies entered into in England only, on or after 1 October 2015, there are additional requirements. A prescribed form of notice must be used, the notice cannot be served within 4 months of the start of the tenancy and landlords cannot use the s.21 route if they have failed to comply with the requirements under the Deregulation Act 2015. This legislation is discussed in the News Article – Legislation Update and requires landlords to comply with certain statutory obligations and serve certain prescribed information on tenants including Energy Performance Certificates and gas safety certificates. Compliance with the statutory requirements set out in the Residential Tenancy Guidance and Residential Tenancy (Statutory Requirements) Focus Note satisfies the requirements. There are also restrictions on landlords seeking a “retaliatory” order (in retaliation to complaints about the state of the property).

As charity trustees, Managing Trustees are under a general duty to act only in the best interests of the charity. This includes obtaining appropriate professional advice when required. It is strongly recommended that Managing Trustees instruct a solicitor to advise them in relation to ending a tenancy due to the consequences of not following the procedures correctly; having to start the process all over again.

When Managing Trustees are considering instructing a solicitor to act for them, TMCP would like to draw your attention to the panel of solicitors which has been set up to provide advice to managing trustee bodies across the Connexion.  The firms on the panel were selected following a rigorous tender exercise and have extensive experience in acting for charities and Christian organisations across a wide area of legal work. For instance, the panel can advise in all types of property transactions, employment law, charity governance and litigation, to name a few.

The benefit to Managing Trustees in using the firms on the panel is that they are familiar with Methodist law, policy and the procedural requirements which must be complied with in transactions. TMCP and the Connexional Team have invested time in training the firms on Methodist law, policy and procedure, and as a result transactions should proceed in a timely and efficient manner resulting in matters completing more quickly and being cost effective.

Further details on each of the firms on the panel are available on the TMCP website at www.tmcp.org.uk/property/panel-solicitors

For ease of reference the details for each of the panel firms are provided on the website in alphabetical order only and not in an order of preference. Once Managing Trustees are on the website page for the panel solicitors they can click on the logo for each firm which will take them to a separate page giving a description of the areas of law the firms can advise on as well as the relevant contact details and location of the firms’ offices.

Whilst TMCP does not need to be involved in the service of notices seeking possession, if the tenant refuses to leave the property and Managing Trustees are advised to seek a court order for possession, they should notify TMCP as a matter of urgency. There are specific requirements under Standing Orders, which include obtaining the consent of the Connexional Team, that have to be followed before issuing court proceedings. Please keep TMCP up to date so that TMCP legal can provide appropriate guidance.

The guidance in this Focus Note applies to England and Wales. Managing Trustees in Scotland may find the following guidance provided by the Scottish Government of assistance.

 

Please note that this document is to provide guidance and assistance to Managing Trustees and their professional advisers. This guidance note is general in nature, may not reflect all recent legal developments and may not apply to the specific facts and circumstances of any particular matter.   Also note that nothing within the documents and guidance notes provided by TMCP nor any receipt or use of such information, should be construed or relied on as advertising or soliciting to provide any legal services. Nor does it create any solicitor-client relationship or provide any legal representation, advice or opinion whatsoever on behalf of TMCP or its employees.   Accordingly, neither TMCP nor its employees accept any responsibility for use of this document or action taken as a result of information provided in it.   Please remember that Managing Trustees need to take advice that is specific to the situation at hand. This document is not legal advice and is no substitute for such advice from Managing Trustees' own legal advisers.