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renew tenancy agreement?


coolhandluke

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I am a new landlord and am coming up to the end of my tenant's first six month tenancy agreement. This was organised by a letting agent although not managed. What are my choices? Should i ask for them to sign another six month or just go on to a month to month? I am happy with tenants and am happy for them to have another six month tenancy.

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You can do either. A further six months might offer commitment and stability of tenancy, but on the other hand a rolling month to month gives the flexibility for either party to terminate with the normal 2 month's notice, should circumstances change. I prefer the latter.

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Hi coolhandluke,

I would offer the tenants a 12 month extension. If they commit to another 12 months then they can fix the rent at the current level. If they only extend for 6 months then I promise to increase the rent at the end of the 6 month period (thereby encouraging them to sign for 12 more months).

The point about taking an extension (rather than letting the tenancy rollover on a month by month basis) is that you are getting the tenants to commit to stay ... which means you can be pretty sure that you will not have any void periods (when the property is empty, tenantless and earning no rent) for another fixed period.

The biggest expense - to any landlord - is NOT the letting agent fees ... .but the amount of rent lost when the investment property is empty ......

Good luck,

Mark

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Hi coolhandluke,

I would offer the tenants a 12 month extension. If they commit to another 12 months then they can fix the rent at the current level. If they only extend for 6 months then I promise to increase the rent at the end of the 6 month period (thereby encouraging them to sign for 12 more months).

The point about taking an extension (rather than letting the tenancy rollover on a month by month basis) is that you are getting the tenants to commit to stay ... which means you can be pretty sure that you will not have any void periods (when the property is empty, tenantless and earning no rent) for another fixed period.

The biggest expense - to any landlord - is NOT the letting agent fees ... .but the amount of rent lost when the investment property is empty ......

Good luck,

Mark

Thanks Mark, good advice. What paperwork would i require them to sign? I know i can get a bog standard tenancy agreement (six month) from the post office but are there special 12 month ones? Cheers

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One thing to bear in mind - if you renew after 6th April you'll have to sort your deposit in line with TDS. However, leave it on a periodic tenancy and the TDS won't apply.

I think we'll see a lot more landlords just letting current agreements roll over onto periodic tenancies so they only have to face the hassle of the TDS once the exisiting tenant leaves.

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Hi coolhandluke,

The same tenancy agreement used for a 6 month period can be used for a 12 month period - the term / length of tenancy is the only thing that needs to be changed.

I also agree with jamiet's comments re: Tenancy Deposit Schemes and landlords not renewing / extending tenancies after 6th April and, instead, simply letting the tenancies roll-over (thereby circumventing the new TDS laws for the time being).

Good luck,

Mark

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but in regaurds to the TDS's around... as long as you get them to sign a tenancy before the 6th of april, and have written into that tenancy that there will be a increae in rent after 12 months to X figure, and that it would be fixed for 12 months at the altered level after the increase....

there the tenancy is therefore is a periodic which could last you upto 2 years. (fixed for first 12 and periodic for next 12) but you have included a rent increase after the first 12 months time that the tenant will agree to (or should)

basicaly saves wrighting a new agreement for 2 years and you get round the TDS for 2 years till it settles down and people can make a more educated choice about which scheme will be best.

just my idea anyway.

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If you want to get smart with this - have your cake and eat it - get the tenant to give you a letter declaring their intention to leave after a further 12 months -you wont be able to increase the rent but it will at least show some commitment from them - dont know what the legal implications are of extending the original lease by a fixed term with an extra line " both landlord and tenant agree that intial fixed term will end on xxxx" set 12 months into future but as you havent created a new agreement merely extended the original one and as such your bond should stay with you !

all good ideas!

would welcome commemts on this !

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