Renters Reform Bill – the end of fixed term tenancies
by Ian Narbeth
By abolishing fixed term tenancies, the Renters’ Reform Bill will cause serious problems for landlords of student accommodation. The issue is not that the tenants may stay after the end of the tenancy but that they might leave early.
Even now it can take months to evict over-stayers. Many properties are unlikely to let to students except at the start of the academic year.
Students who have previously signed a tenancy from, say, September 1st to July 31st will be able to leave at any time on one month’s notice.
Many will choose to avoid paying rent over the summer holidays.
The group may choose to give notice
If one or more of a group of students falls out with the others, the group may choose to give notice rather than resolve their differences or bring in a replacement tenant.
Landlords will lose income and become liable for Council Tax.
The quid pro quo is that rents will have to rise to give the same annual return and cater for the risk of voids.
Some landlords may stop letting to students altogether putting extra pressure on rents.
There are other adverse effects to tenants being able to leave early.
May not offer better terms for signing a longer lease
Landlords may not offer better terms for signing a longer lease as tenants cannot bind themselves to stay.
Attempts to do so by reducing the rent later in the tenancy may fall foul of the Tenant Fees Act.
Instead of staying in hotels or Air BnB, holidaymakers may pretend they want a home and sign a tenancy of a property in a tourist area.
As soon as the ink is dry on the contract, they can give a month’s notice. “And summer’s lease hath all too short a date” – W. Shakespeare.
Renegotiate letting agents’ fees
Landlords will have to renegotiate letting agents’ fees. The typical 10% plus VAT of the first year’s rent will be excessive if the tenant leaves after a few months.
Michael Gove says the Bill is intended to help tenants to stay long-term in their homes.
This part of the Bill has nothing to do with that and allows, indeed encourages, tenants to behave cavalierly.
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Member Since October 2020 - Comments: 1186
12:58 PM, 29th May 2023, About 3 years ago
Reply to the comment left by Ian Narbeth at 23/05/2023 – 10:05
Ian, I just wanted to check your reply on the question of 12 months rent in advance. My understanding is that rent is only rent when it’s due and can only be lawfully demanded when it’s due. With a monthly periodic tenancy, I would have thought that the longest period a landlord could contractually require in advance would be one month and that anything more than this accepted by the landlord risked being interpreted as an unprotected deposit.
Member Since November 2022 - Comments: 73
1:48 PM, 29th May 2023, About 3 years ago
Reply to the comment left by David at 29/05/2023 – 12:58
In law, a deposit is something that is returnable. Sometimes tenants pay 12-months’ rent in return for a small discount. However, demanding this from all tenants would make it difficult for many tenants, and we want to make renting as enjoyable experience as we can. We generally take the last 2 months’ rent of the fixed term in advance, or the whole rent for terms less than 6 months, but sometimes tenants’ circumstances require some variation in this.
Member Since August 2015 - Comments: 342
2:26 PM, 29th May 2023, About 3 years ago
Reply to the comment left by Christopher Rattew at 29/05/2023 – 13:48
Unless there is an amendant the Renters Reform Bill will only allow monthly rent. Its a bit of a blow to me as I self manage my student properties. The rent is paid quarterly. It works great and no one complains.