What Are Regulated Tenancies?

These are tenancies that will have been in place prior to 15 January 1989 and are regulated under the Rent Act 1977

. The main points about a regulated tenancy are that it is defined as a "fair rent", the rent can only be increased every two years, and that the tenancy will not have a specified date as an end date, i.e. 12th October 2015.

A fair rent is an amount of rent a rent officer or rent assessment committee sets as the maximum the landlord is able to charge. This isn't necessarily the same as the market rent.

The law requires that the landlord keeps the structure and exterior of the property in good repair including the roof, guttering, windows, doors and walls, although this does not include internal decoration. In addition, the landlord is also required to keep all the equipment and services relating to the supply of gas, electric, heating, water and sanitation in good repair. Furthermore, the landlord may have more responsibilities depending on the specifics of the tenancy agreement.

It is usually difficult for a regulated tenancy to be passed onto a third party although not impossible. If the landlord agrees to it or the tenancy agreement allows for it then these are two of the three situations in which it can be done. The third is where the regulated tenant dies and in this situation the tenancy can be passed to a spouse or partner who was living in the property at the time of the tenant's death or to a another member of the tenant's family who lived in the property with the tenant for at least two years prior to the tenant's death.

If the tenancy passes to the spouse or partner and there have been no previous succession then the tenancy remains a regulated tenancy. If it passes to another member of the tenant's family or is a second succession it becomes an assured tenancy. An assured tenancy predates an AST and allows for rents to be paid at market values.

It is worth spending a few minutes considering regulated tenancies as these offer interesting opportunities for you. We will come back to them later and discuss it further.

Regulated tenancies offer interesting opportunities for investment, if you know what you are doing. If ever that there are some uncertainties you can discuss this with a legal expert or an expert in real estate.

by: Joseph Hurst

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