Template agreement for longer-term tenancies

The Government has launched a raft of measures to improve the private rented sector which it says will deliver a “better, fairer deal” for tenants.

Housing minister Brandon Lewis announced the package of measures earlier this month. It includes three new contracts under the Government’s “Build to Rent” scheme, which will deliver almost 400 new homes specifically for private rent in London, Liverpool and Durham. The scheme is targeting up to 10,000 new rental homes by 2015.

A new code of practice has also been published by the Royal Institution of Chartered Surveyors to reiterate landlords’ and letting agents’ legal responsibilities.

But the most interesting development is a new model tenancy agreement designed by the Government and aimed at longer-term tenancies of two years or more.

The agreement is free and there is no legal obligation to use it.

The Government says it has done this because it “recognises that there is a growing interest in tenancies that have a longer fixed period, for example three years.” It argues longer tenancies gives tenants, such as those with children, greater security while giving landlords greater certainty on rental income.

To avoid landlords and tenants being locked into agreements they are not happy with, the Government has included “break clauses” which can be used by the tenant or the landlord in certain circumstances.

Tenants can give the landlord three months notice to end the tenancy early, though cannot give notice in the first three months of the agreement. This may be due to unforeseen circumstances such as needing to move house for work.

Landlords have a one-off break clause to end the tenancy after six months, perhaps if there are concerns about the tenants’ behaviour.

Break clauses can also be used where the landlord falls into arrears on their mortgage, or where they plan to sell. Landlords cannot serve notice stating an intention to sell within the first two months of the tenancy.

For more information go to www.gov.uk/government/publications/model-agreement-for-a-shorthold-assured-tenancy

Natalie Holt