Quiz night in aid of Cotswold Care Hospice on 18 June 2009
10/07/09
Underage tenants? It is a minefield!
Thursday 9th July 2009
In 2002 a change in the law meant that homeless 16 and 17 year olds gained priority status for assistance from the housing authority. Since then, there has been a significant increase in the number of underage tenants.
But there is a snag: there is a law preventing under-18s from holding a legal estate in land, including a tenancy. If you attempt to grant a tenancy to someone under 18, the tenancy will be valid, but it will not be held by the youngster – the tenancy will be held on trust for the youngster, with (if nothing else is done) the landlord as the trustee.
Of course, 16 and 17 year olds are often inexperienced at managing their own finances. Many fail to pay their rent, fail to look after the property adequately and some engage in anti-social behaviour.
In such cases a landlord will normally want to evict the tenant, which requires court proceedings. Proceedings for possession need to be served on the tenant’s trustee. But if you are both the landlord and the trustee, serving it on yourself will be a breach of trust. Checkmate!
So what can the landlord do?
If you are already an unwitting (and probably unwilling) trustee, lessen the chances of running into difficulty by making an application to court to have yourself replaced as trustee. But don’t wait until you are making the application merely to provide a way to serve possession proceedings, since it is likely to be refused as a breach of trust and an abuse of process. Make the application early and on different grounds.
But prevention is always the best remedy. Always check the age of a new tenant. If they are under 18, insist on one of three alternatives:
enter into an agreement to grant a tenancy when they reach 18;
agree a licence to occupy, not a tenancy;
or insist that a trustee (such as a parent, youth worker or the Public Trustee) is appointed before the tenancy is created.
In this way, if problems do arise from the youngster’s occupation, the agreement can be terminated or possession proceedings served on a trustee without any breach of trust and, on the more humane side, there is a (caring) trustee who can be told about a developing problem and who may be able to help to avoid it becoming a crisis.
Moral of the tale for landlords? Check the ages of your prospective tenants and include the appointment of a trustee on your pre-tenancy to-do list.
This article provides a general overview and cannot be relied upon in any particular case.
If you have an enquiry on the above, please contact Partner Susan Castle on 01453 847214 or sfc@aeswinterbothams.com.