This series is about how the private rented sector can deal with the Governments intention to abolish section 21.
The abolition of section 21 is really down to the destabilising effect which comes from a large sector of the population having no long term secuity of tenure.
This is because most fixed terms are for no longer than 12 months, after which section 21 can be used (if the landlord wishes) to evict the tenant.
But as section 21 can only be used after the fixed term has ended – another way to deal with the problem would be to allow tenants to apply for a longer fixed term.
I made this suggestion in the blog series and ebook I wrote about this in 2012, which I called The Bigger Picture and the post with the long fixed term suggestion is here.
The suggestion I made there and which people may want to consider would be along the following lines:
- The first tenancy fixed term to be for a term to be agreed between the parties, as now, with the right to use section 21 after it expires.
- After the expirey of the first fixed term, or the first year (or some other prescribed period) of the tenancy if the first fixed term is less than this, the tenant to have the right to apply for a long fixed term of , say, up to 7 years
- This to be subject to a (modest) premium payment – which can be set by the Residential Property Tribunal according to a formula if the parties cannot agree.
- This long fixed term to be capable of being assigned but only with the consent of the landlord
The benefit of this would be:
- If the tenants did not want a longer fixed term they would not apply for one.
- The landlords would have a (modest) extra income to compensate them for the loss of flexibility.
Landlords could be given the right to object to the long fixed term being granted – for example:
- If the tenant is in arrears of rent or has a history of late payments
- If the landlords want to sell or live in the property themselves
- If there have been complaints about antisocial behaviour or if the condition of the property has deteriorated
As regards landlords ability to end the long fixed term early – this could be possible but only where there are seious rent arrears or serious cases of bad tenant behavioiur.
Tenants would be bound by the long fixed term but could either
- End it early if the landlord agrees, or
- Assign it (like a long lease) subject to the landlord not objecting (consent not to be unreasonably refused).
I suspect that this is not the way Government is going to go with this, but it should at least be considered as an option.