Illegal AST clause?

by Readers Question

A week ago

Illegal AST clause?

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Illegal AST clause?

My daughter is at university and an agent has just sent an AST to sign with the follow clause;

In the event of the rent or any part of it being unpaid for more than 14 days after it has become due whether legally demanded or not or if there shall be a breach of any of the obligations on the part of the tenants the provisions for the recovery of possession by the landlord in accordance with Section 21 of the Housing Act 1988 as amended under the Housing Act 1996 shall apply, the landlord may re-enter the property or any part of it in the name of the whole and immediately the tenancy shall end without prejudice to any other rights or remedies of the landlord

Correct me if I am wrong, in which case I will add this to my AST’s, but this is illegal. If it was a lone landlord I might guess he knows no better, but this is the standard AST used by an agent.

Should this be reported, if so to who?

Many thanks

Michael

Comments

Neil Patterson

A week ago

Hi Michael,

The only thing I can think of is that the agent normally deals with some form of commercial contract?

First point of call would be the agents themselves and then their Redress Scheme.

Emerald Legal

A week ago

It is a standard forfeiture clause which is included to enable the landlord to take possession using ground 8 etc within the fixed term. The landlord cannot actually just re-enter and take possession without a court order however.

Mark Alexander

A week ago

I'd sign the tenancy agreement and secure the property first. The contract term you've quoted is definitely not valid which means it could never be enforced.

If you complain before signing the agent will probably just rent the property to somebody else.

I agree with Neil's advice, albeit after you have secured the tenancy and are in the property.

If the agent doesn't belong to a redress scheme then report them to Trading Standards as that is also against the law.

Alison King

A week ago

Is the rent paid weekly in advance? In that case two weeks late would represent two periods overdue which I think is the standard minimum for repossession.
I have no doubt someone will correct me if that is wrong.

Gareth Archer

A week ago

The clause is not a standard forfeiture clause. You would usual find provision to seek possession under Schedule 2 of the Housing Act (the Section 8 Notice grounds) but the provision here relates to Section 21 and seeks to provide the landlord with a right to kick out the tenant without any possession order. Such action would be unlawful and result in serious repercussions for the landlord. I believe the clause is unenforceable unless the landlord serves a valid Section 21 notice and subsequently obtains a possession order via the Court.

Emerald Legal

A week ago

Apologies - I have now read the clause again. It looks to me as if it is supposed to be a forfeiture clause but it has been worded incorrectly. The landlord most certainly could not just re-enter however so the tenant is safe from that perspective. The clause just does not make sense and needs to be re-written as a standard forfeiture clause.

Robert Mellors

A week ago

The first part is just a statement that they may rely upon s21, it is not worded very well but is essentially just a statement about what law will apply. The problem comes with the subsequent part of the statement about re-entering the property, and I believe that this would be unenforceable. Putting in an unenforceable term into a contract (tenancy) is not "illegal", and it does not make the whole contract (tenancy) unenforceable, only the defective term/condition.

There are of course exceptions to almost every rule, and there may be particular types of occupancy agreements where forfeiture or re-entry is allowed, the most common being the forfeiture clauses in commercial leases, but it does not sound as if the tenancy your daughter has received is any of these.

Michael Bond

A week ago

There seem to be landlords and agents specialising in letting to students who either do not know the relevant law or ignore it. They give the rest of us a bad name, and much more important, convince students that all landlords are as Shelter portrays us. This view may stay with them for the rest of their lives. Do you think that this is what happened to Osborne and Hammond?

Ian Narbeth

A week ago

Hi Michael
The clause is nonsense. Section 21 is used where the landlord does not have to give a reason (so-called "no fault" but often used by landlords following a default because the court does not have discretion to refuse possession). The fact that the rent is in arrears or there are breaches of covenant is irrelevant to section 21 applying.
A landlord cannot serve notice under s21 sooner than 4 months into an AST. Furthermore s21 cannot determine an AST sooner than the contractual end date.
An inexperienced draftsman has produced wording which "sounds threatening". It is anything but. You could turn round and say that the landlord agrees not to seek possession until the term end date following non-payment of rent or breach of covenant! Surely not what the landlord wants but it's his clause.
As others have said the landlord cannot re-take possession without a court order.
As an aside try to match the term of the AST to the university year. My daughter was offered an AST for 6 months starting in September. As her course ended in June I insisted on a term until the end of June. The agent seemed to think that all ASTs had to be for 6 months.
Your daughter can sign the AST and not worry about this clause.

Mike

A week ago

I agree with Ian Narbeth, S21 is for any reason or no reason, failing to pay rent soon after an AST starts, a landlord does not have to wait 4 months or so before he can evict a tenant, since failing to pay rent on time and falling behind a landlord can start eviction proceedings under s8, after failing to receive any rent for at least 2 months where rent is paid on a monthly bases or two weeks where it is paid weekly, but landlord then has to give a minimum of 2 weeks notice under S8. (Though this may be wrong, however, acts change more or less on daily bases, but this is what I have been told by a legal advisor or perhaps I understood wrong.

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