Two Year Tenancy

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    Two Year Tenancy

    We'd like to let our house on a minimum two year tenancy but are a bit confused by possibly needing to offer a break clause. I've heard the tenancy agreement should say Two Years with the option for the tenant to break after one year. If that's true then the idea that it's a Two Year tenancy is slightly meaningless as the reality is they can break after 12 months (by giving notice).

    Is this correct or is it possible (normal?) to have a fixed two year term - at the end of which I guess the tenancy runs on month by month like a regular AST. We'd be happy to fix the rent at the start and not seek an increase during the term as the trade off of having long term stable tenants

    #2
    As the landlord you are free to propose your conditions -- the agreement does not have to contain a break clause. While it's not common to have a 2 year fixed term it is nothing problematic to setup.
    It really depends on what potential tenants would be looking for.

    They may end up staying 2+ years even if not bound by tenancy. And there might be a risk for you to be bound for 2 years to tenants who might prove problematic.

    Originally posted by alexi View Post
    We'd be happy to fix the rent at the start and not seek an increase during the term as the trade off of having long term stable
    Note that unless agreement has a clear clause for a specific, bounded, rent increase mechanism during the term, you may not increase rent at all until term expires.

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      #3
      From the point of view of a landlord looking for two years' security of rental income a right to break is more than slightly meaningless, it is totally meaningless. It only makes sense to a tenant who wants both contractual security of tenure and flexibility.

      Before the Housing Act 1988 was passed in cases where fixed terms were granted a year was probably the norm. With the Act providing a minimum term of six moths for an AST, that period became the norm and it is more or less what anyone looking to rent from a private landlord expects. It really all comes down to what a prospective tenant is prepared to commit himself too.

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        #4
        Your understanding is correct. Only to add that there are 2 formats to the break clause. One that applies only at a specific time (i.e. tenancy to be terminated at exactly 6/12 months) or one that applies after a given time, i.e. after 6 months with 3 months notice. I would say that only wanting a 2 year old minimum, might put tenants off. I wouldnt sign such an agreement personally, as nobody knows if the relationship will work. 2 years fixed term also means it is (almost) impossible for you to evict sooner than that, even if you get the tenants from hell. do you really want that? One month into the tenancy the tenant starts having request for you to fix things, pays rent a month late, paints the house walls red. Very difficult to evict, only on discretionary grounds. So maybe it is best for you as well to have an option to get out at a set time in the tenancy. Maybe a 2/3 year fixed term with an option to break in the first 6 months if it isnt working. Just my 2p, obviously opinions on stability differ, some people will only think of great stable tenants, others will think of tenants from hell who couldnt be evicted.
        All views posted reflect my personal opinion only and do not constitute professional advice which I am not qualified or knowledgeable enough to provide.

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          #5
          Just to add my experience as a tenant. Have rented 5 properties, never stayed in one for any less than 2 years but would never sign a 2 year long fixed term. Dont like committing for that long, for me that is why I rent. As professionals, both me and my wife like being somewhat flexible locationwise. Plus you never know if the property is as good as it looks in a 10 minute viewing and whether you are getting a psycho LL.
          All views posted reflect my personal opinion only and do not constitute professional advice which I am not qualified or knowledgeable enough to provide.

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            #6
            Thanks for replies, to summarise there is nothing to stop us requesting a two year contract with no break clause and the agreement will be legal, falling within the usual rules of an AST (we can use a standard AST contract and change the length to two years?)

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              #7
              Originally posted by alexi View Post
              Thanks for replies, to summarise there is nothing to stop us requesting a two year contract with no break clause and the agreement will be legal, falling within the usual rules of an AST (we can use a standard AST contract and change the length to two years?)
              Correct.

              The rules only change at 3 years (slightly) and 7 years.

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                #8
                Are you sure you want to tie yourself to tenants of unknown reliability for 2 whole years without allowing yourself a get out clause?

                Comment


                  #9
                  Indeed: Your ability to pick a good, trustworthy, he-won't-loose-his-job/split-from-the-wife/get-sick/have-a-family-crisis tenant must be fantastic to be able to risk (I use the word advisedly..) 2 years of your having very limited control over a valuable investment..

                  I tell new tenants they will be getting a 6 (well, 7 in Scotland..) month initial fixed term but they can stay as long as they like - as long as they are happy & I am happy..... I've never, ever, granted a new fixed term so far in 12+ years of lettings, most stay more than a year, I think 4years plus a couple of times... But I like the security of a "S21" (or equivalent) "no fault" eviction if I need it... and I have needed it...

                  Cheers & hope it works out....
                  I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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                    #10
                    very good advice: always 6 months never even 12 to begin with... all being well my tenants can stay as long as the wish. Just try evicting bad ones during the fixed term...!! Good tenants on paper can quickly turn out to be bad ones. The advice above is excellent: ignore it at your peril...
                    Unshackled by the chains of idle vanity, A modest manatee, that's me

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                      #11
                      This thread is an interesting antidote to everywhere in the press currently demanding that all tenants want long term lettings.

                      ML
                      Refer Mad Regulators to Arkell vs Pressdram.

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                        #12
                        No one is suggesting that there cannot be a long-term letting, just that LL should keep options open should tenants prove to be less than reliable. I am sure many tenants would like the security of a 2 year fixed term, the same as many LLs would like genuine 100% reliable payers who look after their property and do not cause a moment of grief or hassle. Trouble is, real world ain't like that ...

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                          #13
                          Tenants do want security of tenure. But that means preventing the landlord from seeking possession, not locking tenants in.
                          This was the situation before ASTs.

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                            #14
                            I have a 2 year AST with no break clause.
                            I'm a good tenant with great landlords
                            I'm also a living, breathing, fully cooked female.

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                              #15
                              A tenant with security of tenure, whether contractual or statutory, is more likely to look after a property than one who does not know from one day to the next whether he is going to have to leave.

                              Comment

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