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What Is Regulated Tenancy?

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When shopping for the best investment property, you may encounter ones that already have tenants in situ. These are usually straightforward rental arrangements, but some fall into the category of regulated tenancy.

So, what does this mean? Let’s explore regulated tenants and the UK tenancy laws related to them.

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What is a Regulated Tenancy?

Are you asking yourself “What is a regulated tenancy?” Don’t worry, you’re not alone. Many advertisements use this term, and it means the tenant has more rights than usual. To understand what “regulated” means in the UK, we have to look back to 1977 when the Rent Act was passed.

Tenancies created before 15 January 1989 are considered to be protected by this Act, and regulated tenants have the right to stay in their property for the rest of their lives. The rent is set by a Rent Officer from the Valuation Office Agency and is usually lower than the market rate.

This amount can only be increased every two years and the landlord must apply to the Rent Officer to do so. In short, “regulated tenancy” means the rent is determined by a party other than the landlord, and it is set by the 1977 Rent Act.

What Does Assured Tenancy Mean?

When it comes to renting, you may come across the term “assured tenancy”. This means that the tenancy is regulated by the same act. You may also encounter the term “AST” used in these scenarios.

This acronym stands for “Assured Short-Term Tenancy” and is used in rental advertisements to signify that a property is subject to the regulations.

ASTs share many of the same rights as regulated tenants, but usually cover a much shorter period than the lifetime of a regulated tenancy.

What Is Regulated Tenancy
Tenancies created before 15 January 1989 are considered to be protected by this Act, and regulated tenants have the right to stay in their property for the rest of their lives.

How Does This Differ From Tenants’ Rights After 10 Years in the UK?

You may be aware that tenants’ rights change after 10 years. This is called “long-term security of tenure”. This means that they can stay on the property unless legal grounds for eviction are established.

They may also have some protection against rent increases. These rights and regulations will be set out in the initial lease and the rules that apply to the property.

Not all tenants are regulated by the Rent Act of 1977. If you have any questions about tenants who have been living on the property for 10 years, consult with your solicitor.

Is This Investment Worth It?

Investing in a property with a tenant who has assured tenancy can bring many benefits. These tenants are usually long-term tenants, and they often take care of the property as if it were their own. This means you’re likely to have fewer problems with them and less maintenance to do.

You’re still responsible for the property and your tenant, but they’re less likely to be difficult. This is an attractive option for landlords who are looking for long-term investments.

The value of the property may initially be lower, but it will increase over time as long as your tenant stays. When the tenant moves out, you will get an even bigger boost in property value.

Before You Buy!

If you are considering investing in a property with a regulated tenancy agreement, bear in mind that some of these agreements have rights of succession.

This could mean that the tenant’s next of kin may be able to take over ownership of the property when the original tenant passes away. They are then entitled to remain in the property on an assured basis, meaning they would have to pay market rent but could stay there for life.

What are the different types of tenancy in the UK
If you are considering investing in a property with a regulated tenancy agreement, bear in mind that some of these agreements have rights of succession.

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