Protected Tenant
- Most tenants have some protection but some have more or less protection than others i.e. the protection from eviction. Some tenants also enjoy additional protection from high rent increases determined by the Valuation Office Agency (VOA)
- There is a hierarchy from most to least protection as follows: Protected Tenants; ASTs and, with least protection lodgers with little more protection from eviction than a hotel guest.
- Specifically a "Protected Tenant" is one whose tenancy started prior to the Housing Act 1988 (HA'88) effective from 15 January 1989. This said, subsequent tenancies have some protection, albeit significantly less. Prior to this date, letting property was not viable due to the unintended consequences of over regulation. Landlords owned properties worth less than market value (see BMV) and generated insufficient rent to break even, at a time when prospective tenants were homeless. The government stepped in with the HA '88 reducing tenant rights, whilst paradoxically successfully achieving the intention of the HA'88 - creating homes to rent - as landlords were able to rent their accommodation at market rents, not controlled rents, ironically called Fair Rents. These rents were one-sidled, fair to tenants - not landlords.
- However, the HA88 only applies after 15 January 1989. This has created a decreasing number of pre-existing protected tenancies. The protections afforded carry forward to any new tenancies between the same landlord(s) and tenant(s) - even tenancies created after 15 January 1989. And, if the tenancy is in the name of one spouse or civil partner, but not the other, then the surviving spouse is also likely to be deemed a protected tenant through succession rights. Only upon death of the survivor will such tenancies cease. With the passage of time these tenancies are thus becoming fewer.
- Uninformed or inexperienced landlords unwittingly purchase protected tenancy properties, e.g. at auction in haste, without exercising due diligence which should establish the type of tenancy. Unaware, landlords subsequently learn that their new property purchase is occupied by protected tenants. This can make the purchase a very poor deal potentially ruining the purchaser whose rental income is unlikely to cover the mortgage repayments. And, the landlord becomes responsible for the cost of running the tenancy at a loss. Now the landlord cannot evict, nor afford mortgage repayments. Worst still he cannot sell and cut his loss since there are few buyers. At best the landlord can negotiate a deal with the protected tenant who now holds all the aces. Settlements of over £200,000 have been paid to protected tenants to persuade them to leave. However, bargains can be bought if the tenant is aged and not expected to remain much longer, releasing the owner from such restrictions.
- This also raises potential pitfalls for the inexperienced agent unaware of such matters. The acts of an agent usually bind a landlord. Failing to recognise a protected tenant can result in the wrongful eviction or increase in rent of protected tenants and in turn in fines, legal action and loss of reputation.
- A tenant, whose landlord is a resident landlord, is normally an unprotected lodger.
- Protected tenants enjoy additional rights including regulated i.e. 'fair rent'.
- Unlike protected tenants and "AST tenants", landlords with unprotected lodger tenants have an automatic right to re-possession.
- Protected tenant rents are not set by the landlord but by a rent officer Valuation Office Agency in accordance with what they deem fair, but need not reflect market values of unprotected tenants.
- Do not confuse other types of protections.
See also
- Protection from Eviction Act 1977
- Protected tenancies are also known as Regulated Tenancies, Secure Tenancies and Sitting Tenancies.
- Tenancies Compared
Published: 11 November 2013
Last Updated: 5 December 2021