Over recent months there seems to have developed a growing interest in the idea of requiring landlords to offer longer tenancies in the private rented sector. Steve Harriott (above), CEO for Tenancy Deposit Scheme, discusses…
Proposals by Shelter argue for a new fixed-term, five-year to be introduced for all tenancies in the private rented sector, with rent increases linked to inflation and tenants able to leave the contract at any point with two months’ notice for no apparent reason.
This proposal however seems to be somewhat one sided as the landlord will only have a limited number of grounds under which the tenancy might be ended early. The Residential Landlords’ Association, with which TDS works closely on tenancy deposit matters, has launched a consultation on its own proposal for a longer term tenancy for the private rented sector.
The RLA’s proposed survey of over 100,000 landlords is designed to establish their thoughts on longer term tenancies to establish a model that is fair to both the tenant and landlord. In addition, the RLA is in discussion with the Council of Mortgage Lenders to overcome the concerns that many mortgage lenders have as regards to tenancy agreements that diminish a landlord’s right to fairly reclaim their property.
The proposal envisages landlords offering a longer term tenancy by agreeing that the tenant can renew for successive fixed term periods (such as a year or six months at a time) up to an agreed maximum of say five years. Crucially the tenant would have the right to opt for a new fixed term tenancy at the end of each current period of the tenancy and the landlord could only object if there was good reason to do so.
In the event of a landlord refusing to agree to an extension then the RLA is proposing that a form of Alternative Dispute Resolution is offered to resolve a dispute about a new fixed term being offered. The Dispute Service is working with the RLA on the detail of how such as ADR service would operate and be funded.