Landlord Law Essentials

Landlord Law Essentials Part 2 - Legal Background

In this part we are looking at the legal background to lettings. A most important, if often misunderstood topic!

A quick guide to land law for landlords
The statutory codes
What the Housing Act 1988 does
What if your tenancy is a common law one?
Housing Law in Wales
Further Reading

A quick guide to land law for landlords

When you rent out property to a tenant, they normally have an assured shorthold tenancy. After 1 May 2026 they will have an assured periodic tenancy. But what is this? What does it mean?

Let’s take a quick look at some basic land law. Generally, land is owned in one of two ways. Freehold and leasehold.

Freehold – is where you own the land indefinitely (unless you decide to sell it or ownership is changed for some other reason).
Leasehold – is where the land is owned by someone but only for a specific period of time (known as a term).

Leasehold title is always subject to a property owner. Usually, this is the freeholder, but it can be a long lease (which will itself be subject to the freeholder). After the lease is over, the property will revert back to the property owner.

‘Tenancy’ is another name for a lease. To a certain extent, the words are interchangeable, but in most cases when you say ‘lease’ you generally mean a long lease (e.g. for 99 years). When you say tenancy, you generally mean a short let say for for six months or a monthly periodic.

Needless to say, this series is about tenancies.

The statutory codes

A statutory code is an act of Parliament which sets out the rules for certain tenancy/occupation types. There are three main codes which concern us:

The Rent Act 1977
The Housing Act 1988, and
The Renting Homes (Wales) Act 2016

The Renters Rights Act 2025 does not set up a code – it works by amending other legislation, mainly the Housing Act 1988.

Most rented property in England today is governed by the Housing Act 1988 (see below for Wales). The Housing Act 1988 is the act which set up the assured and assured shorthold tenancies and which regulates how they work. It applies to most tenancies which were created after 15 January 1989.

Tenancies created before then were mostly governed by the Rent Act 1977. You don’t really need to know about this act, unless you own a property with a protected tenant, or are buying an investment property with sitting tenants (in which case you need to know what sort of tenancy they have).

Under the Housing Act 1988, two types of tenancy were created.

The first is an assured tenancy.

This is currently the standard tenancy type used by social landlords such as housing associations. After the Renters Rights Act comes into force on 1 May 2026 it will be the main tenancy type for the Private Rented Sector too.

The second is the assured shorthold tenancy (AST).

This is actually a special type of assured tenancy. The ‘shorthold’ tenancy is one where the landlord can recover possession as of right, without giving any reason, under section 21 of the Act.

Landlords right to use the ‘no-fault’ section 21 procedure for eviction will end after the Renters Rights Act 2025 comes into force (in this respect) on 1 May 2025. On that day, all assured shorthold tenancies and also all assured fixed term tenancies will be converted to assured periodic tenancies.

So after 1 May 2026 ASTs will cease to exist.

Let’s take a further look at the statutory codes.

Early tenancies

The statutory code which preceded the Housing Act 1988 was the Rent Act 1977. We do not need to look behind this, as the Rent Act 1977 rolled up all the preceding legislation into itself.

It was a very tenant-friendly act. Indeed, it was so tenant friendly that it was often impossible to recover rented property through the courts – which is why so few people were willing to be landlords at that time.

The Rent Act 1977 rules still govern tenancies created before 15 January 1989. Tenancies created on or after 15 January 1989 are mostly governed by the Housing Act 1988.

If you want to find out more about the history of the Private Rented Sector, you will find out more from this post on my Landlord Law Blog.

Note, that if your tenancy was created between 15 January 1989 and 27 February 1997, slightly different rules applied. However, these will cease to be relevant after 1 May 2026 when the Renters Rights Act comes into force.

Let’s take a look at the Housing Act 1988 generally – as after the Renters Rights Act comes into force, it will still be the main statutory code. It will just operate in an amended form.

What the Housing Act 1988 does

There are really five things which you need to know about the Housing Act.

1. It sets out the type of tenancies it applies to.

This will generally be all tenancies except

those granted to limited companies,
tenancies where the annual rent is over £100,000 pa or under £250 pa (£1,000 in Greater London), and
tenancies where the landlord is living in self-contained accommodation in the same building (so long as it is not a purpose-built block of flats where the landlord lives in one and the tenant in another).
Tenancies which are subject to different legislation – such as Rent Act 1977 tenancies.
(There are others, but they are not likely to apply to you)

Tenancies which are not covered by the act (and which are not the subject of separate legislation) are generally known as unregulated or ‘common law’ tenancies. If you want to see a complete list, this is set out in Schedule 1.

2. It provides for tenancies to ‘run on’ after the end of the fixed term/be periodic.

This part of the act is due to change as the Renters Rights Act amendments will provide for ALL tenancies to be periodic after 1 May 2026. Fixed terms will be forbidden, and if you try to create one it will be of no effect, and you could get fined.

The reason given by the government for this change is that tenants will then no longer be ‘trapped’ in unsuitable accommodation. For example, as they would be pre 1 May 2026 if their property was riddled with damp and their landlord refused to allow them to end their fixed term early.

A periodic tenancy, in case you don’t know, is where, instead of the tenancy being for a specific period of time (eg six months or a year) it runs from month to month (or sometimes from week to week) in a series of ‘mini fixed terms’. See the image above.

The loss of fixed terms will be particularly significant for student landlords. Our blog post here explains.

3. It provides a certain amount of rent regulation.

This is via the notice under section 13 of the Act that landlords can use to increase the rent if the tenancy is ‘periodic’.

After 1 May 2026, this is due to become far more important as the Renters Rights Act amendments will provide that ALL rent increases must be done via a section 13 notice. We will be discussing this further in Part 7.

4. It sets out the procedure for evicting tenants and the ‘grounds’ or reasons you can base your claim on.

These are set out in section 21 of the Act and in section 8/Schedule 2.

However, the no-fault section 21 ground for eviction will be abolished after 1 May 2026 (save for valid notices served before that date). After that date, section 8 and the grounds in Schedule 2 will be the only way that landlords can recover possession.

We will be looking at this further in Part 10.

5. It sets out succession rules.

If the tenancy is a joint tenancy, then the other tenants will take over the deceased tenant’s share (and obligation for rent). However, if there is only one tenant, then the succession rules set out who is entitled to inherit the tenancy when the tenant named in the tenancy agreement dies.

If there is no one entitled to the tenancy under the succession rules, then the tenancy will pass under the deceased tenant’s will or intestacy.

This is because a tenancy does not end with the death of either party but continues until it is ended in accordance with the legal rules. I usually describe it as being a ‘thing’ which exists independently of the parties who own it.

We won’t be looking at these rules in this course. However, if you need to know more, I have a detailed Dealing with Death Kit which is available to Landlord Law members.

What if your tenancy is a common law one?

For example, if it is a high rent or a let to a limited company?

In this case, the special rules set out in the Housing Act will not apply and the tenancy will be governed by the underlying ‘common law’. Which is what was there before the statutory code statutes were passed to change it.

Differences between common law and assured/assured shorthold tenancies include the following:

Landlords will be able to grant fixed terms (as the prohibition in the Renters Rights Act will only apply to assured tenancies).
There is no rent regulation
The procedure to evict the tenants is different.
The tenancy deposit regulations will not apply.

A quick word about company lets.

These are where the company is the tenant. Not where the company is the landlord (when the tenancy will almost certainly be an AST/AT).

A company obviously cannot live in the property itself, but a residential company let will be where the property is rented for its officers or employees to live in. If the company is renting to sublet to other tenants, then this will not be a residential tenancy at all but a commercial ‘rent to rent’ arrangement.

Landlords should be very wary about entering into ‘rent to rent’ arrangements, as the changes coming with the Renters Rights Act will put them at a grave disadvantage. We do not recommend rent-to-rent.

Housing Law in Wales

Until December 2022, housing law in Wales was governed by the Housing Act 1988 and so was very similar to that in England.

However, devolved powers were transferred to the Welsh Assembly in 1999 and Wales can now create its own laws in areas which were devolved to it, which includes housing.

A new statutory code was created with the Renting Homes (Wales) Act 2016, which came into force on 1 December 2022.

Under the new code, tenancies and residential licenses are, so far as is possible, treated the same. They are collectively referred to as ‘occupation contracts’ and tenants/licensees are referred to as ‘contract holders.

Tenancy and license agreements are collectively referred to as written statements of occupation contract, and there are strict rules about their use and contents (which we will look at later).

With effect from 1 December 2022 when the act came into force, all Welsh tenancies, apart from those referred to in Schedule 2 of the Act, were converted automatically to occupation contracts.

The exceptions in Schedule 2 include protected tenancies under the Rent Act 1977 and lodger situations.

Other laws

The Housing Act 1988 (and the Welsh Renting Homes Act) are not, of course, the only acts which applies to tenancies. There are many other laws, for example, regarding the condition of the property, tenancy deposits, houses in multiple occupations, consumer protection and the like.

There are also a lot of regulations on all sorts of areas – property standards, health and safety (such as the gas regulations), unfair clauses in tenancy agreements and so on.

We will be looking at some of these later in this e-course.