UK Landlord Forum / Life

Hi Guys,

I am new, but will certainly be popping back and hopefully be able to give others some advice myself...in the meantime I have come across an area that I am uncertain of and would really appreciate your thoughts/experiences/advice.

My tenants in question are pretty much ideal, they have been in the property for two years (two 6 month AST's followed by a 12 month one), always pay on time by SO, maintain the property really well and are really good to deal with.

The issue is they have requested a longer term tenancy, preferably 5 years as they wish to stay indefinitely and would like a little more security than a 12 month AST provides.

Whilst I appreciate this and, as the BTL is a long term investment, I would be happy for the current position to extend indefinitely (afterall, good tenants are highly sought after), I have reservations about signing the property "over" in effect for five years.

I believe an AST is only advisable for use up to 3 years, over this, the agreement requires to be "signed as deed" and over 7 years, the agreement practically becomes a lease and repair and maintenance responsibilities can potentially be passed to the tenants as with commercial leases.

A 5 year agreement would therefore be better known as a deed than an AST, other than recommending the "deed" is checked over or written by a solicitor I can't see any other variances to an AST.

I have a rent increase clause and a break clause in my AST, however am reluctant to go all the way to a five year agreement.  My plan is to provide a 3 year AST as "middle ground".  The option for a periodic tenancy is not appropriate as it provides no time security for either party and has further deposit securing implications...


My question is then, excepting the number of years, what implications does a 5 year agreement/deed have that a 3 year AST doesn't on both Landlord and Tenant??


Many thanks in advance for your reponse's.

I have no idea on the legal sides of things but it sounds like youve got a good LL - T relationship, would verbal reassurance that you want them there for as long as they want to be there not be enough and even let it continue on a periodic?

Yes I'd like to think we have a good relationship I have reassured them verbally so I'm sure they'll accept the 3 year AST,

I think I will need to speak to a solicitor about the 5 year bit.

My take.

If they want long term assurance then get a deposit and buy the house.

Otherwise, take a 2 months notice on offer statutorily.

Otherwise a vague "heads of agreement" that sits along side the AST would be all that is required. Why tie your hands for no return, I promise you, they get an inheritance and can move to there own place they would be out like a shot and treat you with little but contempt once the tables had turned.

Thanks for your advice, I think I will stick with a three year AST for now.

Just to add, they are both in their 50's, have owned their own property previously in another area, and when they relocated back to their home town they decided they were too old to want another mortgage.  We do have mutual friends within the "six degrees of separation" so this is comfirmed as true.

I suppose the return for me is good tenants that are clearing my repayment mortgage and maintaining the upkeep of the property...

Thanks

I agree they certainly are "keepers"