This series is about how the private rented sector can deal with the Governments intention to abolish section 21.
The abolition of section 21 is really down to the destabilising effect which comes from a large sector of the population having no long term secuity of tenure.
This is because most fixed terms are for no longer than 12 months, after which section 21 can be used (if the landlord wishes) to evict the tenant.
But as section 21 can only be used after the fixed term has ended – another way to deal with the problem would be to allow tenants to apply for a longer fixed term.
Premium Tenancies?
I made this suggestion in the blog series and ebook I wrote about this in 2012, which I called The Bigger Picture and the post with the long fixed term suggestion is here.
The suggestion I made there and which people may want to consider would be along the following lines:
- The first tenancy fixed term to be for a term to be agreed between the parties, as now, with the right to use section 21 after it expires.
- After the expirey of the first fixed term, or the first year (or some other prescribed period) of the tenancy if the first fixed term is less than this, the tenant to have the right to apply for a long fixed term of , say, up to 7 years
- This to be subject to a (modest) premium payment – which can be set by the Residential Property Tribunal according to a formula if the parties cannot agree.
- This long fixed term to be capable of being assigned but only with the consent of the landlord
The benefit of this would be:
- If the tenants did not want a longer fixed term they would not apply for one.
- The landlords would have a (modest) extra income to compensate them for the loss of flexibility.
Landlords could be given the right to object to the long fixed term being granted – for example:
- If the tenant is in arrears of rent or has a history of late payments
- If the landlords want to sell or live in the property themselves
- If there have been complaints about antisocial behaviour or if the condition of the property has deteriorated
As regards landlords ability to end the long fixed term early – this could be possible but only where there are seious rent arrears or serious cases of bad tenant behavioiur.
Tenants would be bound by the long fixed term but could either
- End it early if the landlord agrees, or
- Assign it (like a long lease) subject to the landlord not objecting (consent not to be unreasonably refused).
Worth consideration?
I suspect that this is not the way Government is going to go with this, but it should at least be considered as an option.
If you try this then you’ll have no landlord giving a tenancy beyond the first 12 months and then just letting it roll. Which is what we have now.
That is just obvious.
Next.
You really don’t end Section 21 by keeping it.
@Rent Rebel Section 21 is only effective after the fixed term has ended. Landlords cannot use it during, say, a five year fixed term. You won’t want a fixed term longer than 7 years or tenants will become liable for repairs.
The suggestion is that after an initial period tenants will have a RIGHT to apply for a longer fixed term.
Many landlords would probably be OK about this. The main reason they don’t grant longer fixed terms now is that their mortgage lenders won’t let them.
Oh Tessa. What’s “a RIGHT to apply” worth?
Tenant: Can I have a longer term please?
Landlord: No.
Most landlords don’t grant longer terms precisely because you can’t use a s21 within them.
And if even if you find 10 of them who will well that is not helping every other tenant that didn’t get one and you have not ended s21 and/or stopped it getting misused.
Brokenshire talked of open ended tenancies and ending section 21 so can we stop suggesting alternatives that aren’t this? http://bit.ly/2EeeNC9
Just because Brokenshire has had his two pen’th doesn’t mean he is right nor that alternatives should not be considered.
Once again:
You do not end Section 21 by keeping it. And Brokenshire talked of ending section 21.
Once again:
Brokenshire is not necessarily right.
There may be better alternatives.
Absolutely. If tenants can be protected AND landlords interests protected in some other way which is better – then why destabilise the industry (and potentially encourage many landlords to sell up) by getting rid of s21.
Longer fixed terms (while keeping s21) has to be considered as one of the available options.
I have once have a tenant ask for a lnger fixed term. 2 years after her initial 6 months. Since she was an excellent tenant I would have agreed but my mortgage limited me to giving her 12 months more. 3 years after the end of that 12 months she is still there.
My newer mortages have specified a maximum of 3 years.
I wouldn’t want to give an in itial fixed term of more than 6 months to a tenant I didn’t know. Nor would I expect a tenant to want to commit themselves to paying for that long. A break clause after 6 months usuable by either party would make a three year fixed acceptable. Of course the usuall suggestion that it be 3 years for the landlord but only 1 month for the tenant is unfair.