Introduction of “tenants’ charter” will stoke up demand for landlord legal services

Published: 02/10/2013

The news that the government is to introduce a “tenants’ charter” enabling private tenants to demand rental agreements of up to five years comes hard on the heels of reports from research conducted by AXA Business Insurance which noted that only 53% of landlords actually have a tenancy agreement in place.

‘When we launched GW LET we designed our service in response to the demand from amateur landlords for legal help for landlords geared specifically towards them,’ remarked Eddie Goldsmith, Senior Partner at property solicitors Goldsmith Williams. ‘Reports of possible proposals of longer term tenancies have been rumbling around for a while with current reports suggesting a “tenants’ charter” will give tenants the right to request longer rental agreements of between two and five years which landlords will be expected to honour.

These proposals raise a number of issues. The AXA Business Insurance research findings show just how much these landlords already need specialist legal advice as nearly half of all landlords surveyed did not even have a tenancy agreement in place. Moreover longer-term tenancy agreements will raise issues for buy-to-let lenders.

There’s also the issue that the borrower landlord and the lender could feel that they are left with less flexibility if the tenant has a longer-term tenancy. However again that’s where the specialist services of a landlord law solicitor comes to the fore as they can advise the borrower landlord on the legal remedies available to retain greater control over their property.

The Housing Act 1988 Schedule 2, Part I Grounds 1 and 2 provides mandatory grounds for recovering possession from the tenant. Ground 1 relates to returning owner-occupiers (whose landlord gave notice to their tenants at the beginning of the tenancy about this ground) so they can recover possession on the basis that they intend that property to be their principal residence. Ground 2 is where a mortgagee in possession needs to exercise its power of sale. These opportunities (amongst other grounds) to recover possession could be critical for both borrower landlords and lenders especially if longer-term tenancies become the norm.

The introduction of a “tenants’ charter” will stoke up demand for landlord law services as amateur and accidental landlords alike look for ways to retain flexibility whilst offering their tenants the required greater stability.’

Content correct at time of publication