AST- let for 4 years, with break clause in final year

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  • AST- let for 4 years, with break clause in final year

    Hi all

    New to this but would appreciate some advice if anyone can help:

    I have secured a tenant who wants to lock me into a 4 year lease, with a break clause only in the 4th year after 10 months.

    I have read about assured shorthold tenancy agreements and want to know am I going to cause myself any legal trouble by agreeing to such a long lease? Does the tenant gain any preferential rights as a result of such a long lease?

    Many thanks in advance
    Smithie..

  • #2
    i would truly not enter into such a long agreement to be honest with you.

    Draw up a lease for 6 months, see how it goes and then draw another up maybe on a yearly basis to give both parties some security.

    Comment


    • #3
      Could you clarify your concerns? THe contract will have clauses to evict the tenants should they damage the property, not pay rent etc.

      They want to have it for a specific period to avoid having to move again and are willing to tie themselves to a contract for the required length if time.

      My main concerns are additional rights they may gain with such a long lease and the problems I maybe faced should things go wrong..

      Thanks
      Smithie

      Comment


      • #4
        Originally posted by smithie View Post
        Could you clarify your concerns? THe contract will have clauses to evict the tenants should they damage the property, not pay rent etc.

        They want to have it for a specific period to avoid having to move again and are willing to tie themselves to a contract for the required length if time.

        My main concerns are additional rights they may gain with such a long lease and the problems I maybe faced should things go wrong..

        Thanks
        Smithie
        Usual AST is not very suitable. Better to have a professionally-drawn lease (on which T will need to take legal advice) so as to cover your understandable concerns.
        NB: all this assumes a property in England/Wales and used for residential purposes- any other use may involve business tenancy legislation.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


        • #5
          Also, a letting for >3 yrs MUST be by Deed: see s.52(1)/s.52(2)(d)/s.54(2) of Law of Property Act 1925. A simple signed AST will not suffice to create a legal tenancy.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


          • #6
            Thanks for all the information its very useful..

            regards
            Smithie

            Comment


            • #7
              also who knows what your situation (or theirs) will be in a years time let alone 4 yrs - you may want to sell, they may want to buy a house etc etc. take jeffrey's advice re the lease >3 yrs if thats the route u want to go down.

              Comment


              • #8
                I had exactly the same proposition form a potential tenant, ie, for a 4 year course & so a 4 year agreement. At first I was pleased, no hassle, 4 years with no void, secure income.....but then I thought it through & as other posts have stated, you just don´t know what is going to happen, you can´t sell, what if the tenant is a nightmare, what if you want to move back in, neighbour issues etc.

                Anyway, after careful thought I wouldn´t do anything longer than 12 months.

                Hope it helps, any other views welcome.

                Comment


                • #9
                  You CAN sell- but not with vacant possession.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                  • #10
                    Thanks, yes I appreciate I can sell but only to someone not wanting to live there. I actually bought the property mid contract with the tenant in place & thought I would get it cheaper. However when the prices were released online I paid exactly the same as a similar vacant property.

                    I suppose also if I was looking to sell a tenanted flat on a 4 year lease (say 3 years left on it) I would be limiting my market down considerably. Funny really as as a seller with a 4 year tenant I would be looking to get a premium if I sold.

                    Shocking post on another thread about the eviction & they didn´t know. I hope it all works out.

                    Comment


                    • #11
                      I have been advised by my agent that the contract will indeed be an assured shorthold tenancy (AST). I was slightly confused as I thought they would not be used in agreements over 3 years, excuse my ignorance if I have misunderstood something.

                      Basically we want to allow the tenant to have a 4 year deal but should there be any issues such as non payment of rent, noise etc we can remove them with the S21 notice..

                      Appreciate it if anyone can tell me if I'm going totally off track!

                      regards
                      Smithie

                      Comment


                      • #12
                        Originally posted by smithie View Post
                        I have been advised by my agent that the contract will indeed be an assured shorthold tenancy (AST). I was slightly confused as I thought they would not be used in agreements over 3 years, excuse my ignorance if I have misunderstood something.

                        Basically we want to allow the tenant to have a 4 year deal but should there be any issues such as non payment of rent, noise etc we can remove them with the S21 notice..

                        Appreciate it if anyone can tell me if I'm going totally off track!

                        regards
                        Smithie
                        Agent is correct: there is no real maximum for an AST in Housing Act 1988. It's just that the standard Agreement forms are not very suited to longer lets (eg letting for > 3yrs has to be by Deed; letting for >7 yrs has to be registered at HMLR).
                        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                        4. *- Contact info: click on my name (blue-highlight link).

                        Comment


                        • #13
                          You cannot use a s21 notice to evict your tenant unless (a) you give them at least 2 months notice and that (b) the notice expires on or after the expiry of the fixed period of your AST. If they start failing to pay their rent, then when they are two or more months in arrears you can evict them with a section 8 notice (two weeks notice required).
                          I do feel that you would be well advised to consult a solicitor on this one - it may cost you a bit, but it would be well worth while. Make sure you find one who is familiar with landlord and tenant law - like Jeffrey whose contact details are not too difficult to find.

                          P.P.
                          Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

                          Comment


                          • #14
                            Dear All

                            Thanks very much for your help, unfortunately (or I should say fortunately) the prospective tenant fell through, he started to make some ridiculous demands and further wanted to reduce rent agreed.

                            Oh well best I didnt sign but at least I now know what to do...

                            regards
                            Smithie

                            Comment

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