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Long contract for long-term tenant


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I have had a tenant since 2005 who is great. He's happy to stay in my flat 'until he kicks the bucket' and I'm pretty happy to have him. He came in on an AST, has had one or two more since then but we have been on month to month for years.

Now I'm putting new windows in, he's agreed to a moderate increase in the rent to cover it and I'm proposing to issue him with a new tenancy agreement. He and I are both happy to commit to two years at the new rent.

I've got 2 questions:

1) Does giving a 2 year tenancy give him any additional rights after those 2 years expire?

2) Does the fact he's been there for 12 years already give him any additional rights?

The property is on a residential mortgage with consent to let. The lender is in run-off (not doing any new business) and never asks me anything about the lease or occupants. To be honest I think they've probably forgotten as the consent was obtained in 2001. The interest rate is 1% so I'm doing nothing to rock the boat!

I could do with more problems like this - a dream tenant!

All advice gratefully received.

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Daryl

 

Sounds like you have a model tenant who will pay off the mortgage for you!  At present the maximum time for an AST is 3 years otherwise you have to use a different style of tenancy called a Deed which your mortgage company would not sanction as this is not as protected for the lender or landlord as an AST.  A tenant has no additional rights with an AST than the day they start - it is not like a council property where there are Right To Buy elements so you have nothing to fear on this front.  

 

A 2 year tenancy would give your tenant additional certainty and technically you too.  However, if they had a sudden change of circumstances and wanted out, you could technically insist they remained for the duration of the agreement but this is generally counterproductive as you will have an unwilling prisoner who could cause more hassle than its worth and since they have been so good to date I would call it quits and say thanks for all they have done.

 

I have tenants who have been on rolling contracts (Statutory Periodic Tenancies (SPT)) for over 8 years with no end in sight and for me this gives me the flexibility I need if ever my circumstances or the tenants change and then it can be quickly drawn to a close.  If you are on a long fixed term and rent or their behaviour becomes erratic there could be a long period of time before you can legitimately give notice and resorting to the courts is a costly additional expense.  I personally would leave the tenant on the current SPT and leave it open ended with a view to issuing Sect 13 rent increases at inflation rounded down for the foreseeable future & explain to your tenant that you have no plans for them to be given notice and keep them on side.  Best to keep the rent below market rates so that it will cost them to move on and you have the enjoyment of a solid tenancy with no void which is more than worth the slight reduction in headline income.  You will also be safe in the knowledge that you could always get more for the property if they did leave and reset the arrangement with a new tenant.

 

Good luck

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