Resident landlords are excluded from being able to grant an assured shorthold tenancy and there are two types of resident landlord.


Sharing facilities e.g. kitchen, bathroom etc with tenant

If you share facilities with the occupier, then it is unlikely that they are a tenant. This scenario is a lodger and creates a licence not a tenancy. A licence is simply permission to use a room (or any land) and that permission can be revoked anytime. No granting of an estate in land is provided with a licence. In addition, this type of sharing means a landlord is excluded from some parts of the Protection from Eviction Act 1977 (requirements to serve written notice and court orders) and so is called an excluded licence.

When drafting an excluded licence you should always ensure you are entitled to enter the room at any time in order to provide services such as cleaning. This will make it clear it is a licence and not a tenancy. The Guild provide an appropriately drafted excluded licence for this purpose.


Landlord lives in same building but only shares communal hallway

This situation is slightly different to the one above. This is where there is a building that, since construction has been “converted” into flats. The exclusion does not apply to a purpose built block of flats.

If we take a simple example:

Building when originally constructed was a single house. Since then, it has been converted into three flats. Landlord lives in ground floor flat and lets the other two flats. These two let flats cannot be an assured shorthold tenancy. They will be common law tenancy.

For this exclusion to apply, the landlord must reside in the building at all times since the tenancy was created. If the landlord moves out, the tenancy will become an assured shorthold. A landlord may vacate for up-to 28 days and the tenancy will continue to be excluded, or a landlord may serve notice that he intends to return within 6 months (perhaps living abroad for a few months at a time). If notice is served then the tenancy continues to be excluded for up-to 6 months.

Schedule 1, resident landlords exclusion reads:

Resident landlords

10. – (1) A tenancy in respect of which the following
conditions are fulfilled –

(a) that the dwelling-house forms part only of a
building and, except in a case where the dwelling-house also forms part of a
flat, the building is not a purpose-built block of flats; and

(b) that, subject to Part III of this Schedule,
the tenancy was granted by an individual who, at the time when the tenancy was
granted, occupied as his only or principal home another dwelling-house which, –

(i) in the case mentioned in paragraph (a) above,
also forms part of the flat; or

(ii) in any other case, also forms part of the
building; and

(c) that, subject to Part III of this Schedule,
at all times since the tenancy was granted the interest of the landlord under
the tenancy has belonged to an individual who, at the time he owned that
interest, occupied as his only or principal home another dwelling-house which, –

(i) in the case mentioned in paragraph (a) above,
also formed part of the flat; or

(ii) in any other case, also formed part of the
building; and

(d) that the tenancy is not one which is excluded
from this sub-paragraph by sub-paragraph (3) below.

(2) If a tenancy was granted by two or more persons jointly,
the reference in sub-paragraph (1)(b) above to an individual is a reference to
any one of those persons and if the interest of the landlord is for the time
being held by two or more persons jointly, the reference in subparagraph (1)(c)
above to an individual is a reference to any one of those persons.

(3) A tenancy (in this sub-paragraph referred to as “the new
tenancy”) is excluded from sub-paragraph (1) above if –

(a) it is granted to a person (alone, or jointly
with others) who, immediately before it was granted, was a tenant under an
assured tenancy (in this sub-paragraph referred to as “the former tenancy”) of
the same dwelling-house or of another dwelling-house which forms part of the
building in question; and

(b) the landlord under the new tenancy and under
the former tenancy is the same person or, if either of those tenancies is or was
granted by two or more persons jointly, the same person is the landlord or one
of the landlords under each tenancy.