How Long Do Tenancy Agreements Last?

I have an agency managing a couple of properties for me whilst I'm out of the country. The 6 months were up on one property, so they wanted to increase the rent by £25 pcm, and charge me £125 + VAT for the new agreement, and charge the tenants £75 + VAT. So after 6 months I would be (£25 - 12%) = £22 better off per month, which for 6 months = £132.

This extra £132 would have been gained at the cost of £125 + 20% = £150 to me, and £75 + 20% = £90 to the tenants.

So I'd be £18 worse off, the tenant would be £240 worse off and the agent would be £218 worse off.

I pointed out the maths to them expecting them to come back and bargain, halve their fees or something. A week later I got an email asking if I wanted to go ahead with the new tenancy at the new rate as the tenants had agreed. I pointed out that it would leave me worse off.

A few days later they emailed me to ask if I wanted the new tenancy or not.

I replied saying I wanted the tenancy to roll over into a periodic tenancy.

They replied asking for £125 + Vat for the new agreement for the periodic tenancy, and that they would be charging the tenants £75 + Vat for the periodic tenancy. So I emailed the agency boss pointing out the potential illegalities in charging a tenant for holding over, and within minutes got an email back from teh agent saying that in this case they would waive all fees.

Robbing bstrds.

100% agree only 6 month informing tenant that you are looking long term - works well for all cases. Great tenant can just stay, rent increase as required - no agents no renewal fees, S21 if required. Recently a tenant asked if they could have a long term committment to keep rent the same if they did this and that within a month that half of the partnership moved out giving notice! Would not have been in their best interest. Just had another tenant moaning about all sorts, issued S21 for various reasons and court - property was all refurbished when they moved in, just done the check out 3 punched/kicked in doors and filth everywhere. Mind you if either party dealing with agents then fees horrendous and unnecessary - they will say they are running a business BUT a good tenant paying rent takes up no time so earning good money there.

Thanks. Was thinking of trying for long term contract. I'll just stick to 6 months after reading your post.

I had a good tenant (a foreign student) on a 1-year AST (with 6-months-break clause) who - at agent's suggestion - renewed rather than going the SPT route. But a month later she got a scholarship to elsewhere, therefore regretted now being "tied in" for a further 5 months. So I said "OK, you've given me what would have been the requisite notice if it had been SPT, just put me in the situation that I'd have been in with SPT by reimbursing me with the part of the contract fee which I'd had to pay to the agent." She did this, probably relieved that she was no longer committed to paying rent for 3 or 4 months when she wouldn't be there!
My point, I suppose, is that circumstances can change, and for both tenant and landlord a "good working relationship" is ideal - it can be done!
Note for the uninitiated: SPT = statutory periodic tenancy: if tenant stays at end of an Assured Shorthold Tenancy and nobody does anything to change things, then automatically it is a SPT on essentially the same terms, with tenant normally having to give 1 month's notice and landlord 2 months, each to end the day before a rent day (but on this last aspect I may be a year out-of-date).

Agree with your point of view. We've never offered more than a 6 month tenancy and whilst tenants and LL want long term sometimes it's not in the best interest of either as you've said.
We have had all our properties rented for about 4 years all started on a 6 month ast.

Like reading your blog...well most of it.

Steve

Enjoyed your article. I have a tenant that started on a 6 month contract and has gone on to a rolling contract. She has never missed a payment in 3 years - sounds great. However, on DSS, very young and had a second child since she's been there (no father around). Keeps the place cleanish. So far so good. I have only just started using a management agent because I never know when she is going to ring with something wrong.I have a boiler contract so she can get someone out any time for a problem and she won't let them in if it's not convenient. The washing machine was leaving 'bits' on her clothes (I had to show her how to clean it). I won't go on bease it goes on and on. I gave in to an agent for my sanity but do resent the fees.

Great post! I only offer 6 months then rolling month to month as you say being tied in for 3 years is just stupid and could be very expensive if you get a wastrel tenant.

None of the hyperlinks seem to be working I wanted to read your one about DSS. That is me done with those fuckwits for the last time as that's a few times stung now.

I got a text last week from the tenant telling me all his money has stopped and he'd moved out that day leaving me a months rent down, because of course they pay in arrears. The council don't give two fucks about notice periods etc. so they can house the fuckers from now on cause I certainly wont entertain them again.

I know I am tarring them all with the same brush, but ALL of us landlords are cunts aren't we!?

A 6 month agreement is the maximum my tenants will get from me with a s.21 signed at the beginning. After 6 months, they go onto statutory periodic.

I'm in it for the long term and I let my tenants know this so they don't have that fear looming over them.
There's a minority of rogue landlords whose brush we all seemed to be tarred with but there are also scallywag tenants who can cause landlords to have nervous breakdowns for all sorts of reasons, not just non payment of rent.

I consider myself a good landlord and in return I have very good tenants who I treat with respect. Repairs are done asap and all is well.

In a conversation with one of them just last week, she said they'd like to go to town on the garden and really do it up. They've been with me for 16 months and want to stay long term, I said that's fine by me and they can stay as long as they like. There's no reason for me to issue a longer tenancy as the SPT works fine for us all.

Interesting and timely piece - I'd just like to point out that Ed Milliband's proposed bill would have allowed the tenant to get out of the agreement early, but not the landlord. I'd be interested to know whether that would violate the unfair contract terms act, as most landlords are consumers (i.e. private individuals)...

I'm currently looking a for new tenant, and the other day a couple came to me who were one month into a new tenancy, but the landlord then decided he wanted to sell and wanted vacant possession. I thought about this and came up with 3 possible scenarios:

-it wasn't an AST but a contractual tenancy with no fixed term
-the tenants had done something pretty bad and the landlord suddenly decided to "sell" to get rid of them (whether he served a section 8 too or not)
-landlord was just ignorant of the law and his responsibilities (unfortunately, there ARE a small number of "hobbiest" landlords around who could care less about landlording...)

Also, the landlord could have sold with the tenants insitu, but this would have limited his market to other landlords.

One of the tenants had a stable but lowish income, but her boyfriend just had a casual evening job that paid next to nothing - in all, not good circumstances under which to be seeking another tenancy, especially not a self contained flat in London.

In my experience it is the tenants that want shorter agreements as well.

If I'm confident in the tenants I insist on 12 month agreement, i get annoyed when agents try to drum up business towards the end of the agreement by wanting £ for agreements or trying to turn tenants over to make more on finders fees.

Think these 'tenant activists' & Shelter live in cloud cuckoo land claiming they speak for the majority of tenants.

I have two good tenants in my property who have been paying an agents for 3 years for the renewal of their 12 month agreement. On top of what I am charged annually for them having introduced my tenants 3 years ago. The Letting agents charges are extortionate so I will not be renewing at the end of this agreement as I need to break ties with the letting agent who are receiving a lot of money for changing dates on a piece of paper. So I have to loose my lovely tenants or I will end up in court. Has anyone ever paid a 'get out' fee to an agent to allow them to continue to use the tenants that the letting agent introduced.

Denise. Dont loose a good tenant. Just notify the agent that you no longer wish to use their services. Read your contract as there should be details in there. I generally manage my own properties but occasionally use an agent. The agent I currently use for one of my properties requires 90 days notice which I think is fair.

I agree with a lot of your analysis but i suspect too many landlords prefer to stick to rely on the rolling periodic month by month agreement once a fixed terms ends.

Tenants get pissed when rent increases for no apparent reason and they are asked to cough up something to get a renewal - when they are a reliable repeat customer !

Tenants don't necessarily want to rock the boat either so many will keep quiet and accept a periodic rather than push for a new fixed term.

A landlord ends up with a good tenant getting slowly more and more pissed off with a landlord they barely see, incremental rent increases and less security... so they start to look elsewhere when a bit more of a proactive friendly approach from the landlord would have kept things to everyone's liking.

@Chris
Remember the rules for the issue of section 21 have changed...and section 21 notices have as well the second time in less than a year. More hoops to jump through.

As an agent & former landlord I sympathise with you all.
I feel there is a lot of resentment towards agents fees of which I used to feel to. But have you stopped and asked yourself why?

Do you resent paying a restaurant for a meal, a shop for goods, a solicitor, TV subscription do you demand a breakdown and explanation of how their prices set and their revenue distributed? I think not.

You resent paying an agent as you feel we do what you can do for a lot less money and to a certain degree your correct, however when your lack of knowledge or sheer laziness blows up like a bike steaming shit bomb who do you run to for advice? Oh let me guess the agent who is good but you didn't want to pay a fair fee to.
What you don't realise is a good agent works their nuts off for little in return. The running costs of an agency makes you want to puke as cost of being on Rightmove & Zoopla is a couple of thousand a month just for a few post codes, then their is software to run everything, rent, insurance, membership to redress schemes, hardware, other advertising, stationary, printer toner and paper, cleaning, electric, water, rates and that's before the doors even opened.

The amount of cocksure aren't I great landlords that have come in lording it up like they're the towns biggest and best businesses men only to find after they have wasted an hour of my time squeezing me for free advice then realising their current managing agent has left them with their pants down and bent over a barrel ready to be screwed by whoever feels like a go to then turn round and haggle my fees and tell my I'm exoensive is just insulting. The next problem I face is these types of landlords who have so kindly given me a hornets nest to sort out normally have equally bastard awkward & rude tenants. So I'm now dealing with a whole list of new problems because previous agent or landlord done sod all about it in the hope tenant would hide under rock.
Here is a very recent example; I took on 3 properties for a landlord I charge 10% management pcm, expensive you say other agents do from as low as 5% and yes they really do but how do you define what you get for 5%? I'll tell you, you get your rent collected they pass on information from tenant to say there is a problem and they charge you for renewals! If an agent offered proper full management at 5% they wouldn't last 3 months.
The sheer volume of work and man hours in creating details, floor plans, pictures,attending viewings even outside business hours, obtaining documents for referencing company, regular unannounced visits and calls from tenants and landlords, preparing a property & setting up a tenancy and then just when you think your ready after tenant and landlord have hounded the shit out of you to get it done ASAP despite them constantly moving the goal posts they do it again or make a new request rendering most of what you've done worthless.
10% in my opinion isn't enough for a super slick service but it's what's just accepted.
Before slamming agents and I am the first to admit most are useless take a long look in the mirror and ask yourself do you cut corners to conserve time and save money? If your agent was so loose with your property and it blew up in your face who you gonna call and scream at and want to sue?
Free tip just incase some of you aren't aware when you create a new tenancy you need to prove you have served the tenant a copy of the EPC and Gas Safety certificate or you will not be able to serve a section 21

If I did roll over to a periodic tenancy is it usual for the agent to charge my tenants or should there be no fee
to either of us.

Ryan please dont beat about the bush just say what you mean LOL LOL

@Nige

I was referring to my pre Oct '15 tenancies but you make a very good point and a timely reminder that the s.21 process has indeed changed. Thanks.

Have any Landlords pursued tenants through the county courts for unpaid rent or is it just not worth the hassle?
As a person who would cut my own nose off to spite my face that's what I would do or even the high court.The tenant most likely won't even turn up so you would win by default then you can send the high court Sheriffs round to their new gaffe and tow away their shiny Corsa or take their nice big plasma TVs .

From my perspective of a French dude living in London for the past 6 years, I find the tenancies to be far more restrictive and risky than the French ones.

A French tenant benefits from the same rights and security as a short term lease. Where it illegal for the landlord to impose any rules or even enter the property without the tenant's consent. For example, tenants do not have to ask permission, and cannot be evicted for smoking or owning pets. How long does it takes to evict a tenant in France? Think a couple of years.

A middle ground would be nice. Bear in mind us tenants do not have the ability to shop around. We find a flat we like, and pray the agency and landlord wont be money grabbing sleazebags. I don't mind a short term tenancy, but I do want to be sure I can remain in the property for many years, have complete control on how I live my life in said property, and know my rent wont go higher than inflation in most cases, as well as plenty of notice when changes have to be made as long as my rent is paid on time.

Yes, landlording is a buisness. But when the very lives of people is involved, it isn't a buisness like selling coffee or hamburgers.

@Stephen,

We had a similar system to France pre Housing act 1988. It didn't work. There were no properties to rent, stifling mobility and the economy.

Most of France gets away with it as they have the same population as the UK but with twice the land size.

Although the rental market in high demand areas like Paris is awful for a tenant trying to find a property- a choice of 'who you know', brown envelopes or slumlords.

The UK system isn't perfect but within it, the conditions you want can be negotiated separately- but you have to pay for it, it comes at a cost. Why should everyone else pay for the system you want?

Re: agent repeat fees as Tenancies run on. I refuse to do business with any agent that asks for these. Only one agent has refused to be instructed onthis basis. London-based, so clearly I have a big choice of agents. In fact, I always write my own agreements with agents and don’t accept their standard issue agreements. No problem there, either.

Your blog has been enlightening one.
I've gained a lot of information, tips, "experience" that you have shared .
Good work !!!!