Tenants protected by the Rent Act 1977: what does it mean?

In the property market, a sitting Tenant may typically be nothing to be concerned about, particularly if you are an investor who purchases buy to let properties. If anything, it might be a positive aspect of the investment as you are likely to be deriving a reliable, regular rental income.

But what if the sitting Tenant is a long-standing Tenant who has the protection of the Rent Act 1977?

These Tenants are often referred to as ‘Protected Tenants’. What rights does that Protected Tenant have? You may be looking to increase the rent on the property or give notice to that Protected Tenant. The legal implications of these points will be reviewed in this blog.

A Protected Tenant for the purposes of this blog is a Tenant whose Tenancy falls within the remit of the Rent Act 1977. These are Tenancies that were granted before 15 January 1989. These Protected Tenants, and their Protected Tenancies, are becoming increasingly rare, but they do still exist and if you come across one, a landlord should tread with care.

A Protected Tenancy affords the Tenant the right to remain in the property for life, and for those long-term rights, on the Tenant’s death, to pass to their spouse, civil partner, or a member of the family. Additionally, a Protected Tenant must only be charged a ‘fair rent’ which means that the Tenant will be paying lower than market rents.

Can you not just get a Protected Tenant to sign a standard Assured Shorthold Tenancy and bring the tenant in line with other tenants you may have?

Yes, you can arrange for the Protected Tenant to sign an Assured Shorthold Agreement but all that this achieves is the migration of the Rent Act 1977 rights to the new agreement. This does not remove the Tenant’s protection. The rights are carried forwards.

It is possible for a Tenant to surrender the Protected Tenancy rights, but this process must be handled with extreme caution and is likely to require the Tenant to physically move out of the property for a period of time (at least 24 hours) before returning to the property on the terms of the new agreement.

This begs the obvious question: why would a Protected Tenant agree to do this when that Tenant has the relative luxury of an extensive suite of rights under the Rent Act 1977? The reality is that persuading a Protected Tenant to sign up to a new agreement requires planning, preparation, and sometimes a degree of guile.

It is possible to terminate a Protected Tenancy but you must be able to satisfy one or more grounds. These grounds are set out in the Rent Act 1977 and are not dissimilar to the Housing Act mandatory and discretionary grounds, although typically it is a more challenging exercise for a Landlord. One also has to keep in mind that persuading a Judge to evict a long-term Protected Tenant on the basis of a discretionary ground (e.g. rent arrears, or disrepair) is in most cases going to be a tall order.

If you have found yourself in a situation where you have purchased a property with a sitting Protected Tenant, or perhaps you already own a property with a Protected Tenant, and you would like to discuss the scope for either removing the Tenant or seeking to alter their tenancy status, please contact the Property Litigation Team at Hughes Paddison Solicitors.