Tempting as it might be to lock professional residential tenants into a long-term agreement of twelve months or even longer at the start of the tenancy, I do not think this is always the best idea.
Circumstances in life can often change, tenants with good references may stop paying their rent or start to make a nuisance of themselves, and it can be a long, expensive, and stressful process to evict them. Therefore I normally would in most instances, recommend a six month fixed contract to begin with and renew thereafter rather than a break clause. Break clauses can cause confusion, with tenants and sometimes landlords not sure exactly when and how notice should be served.
I was recently approached by a landlord for advice, her tenants have been upsetting the neighbours with their anti-social behaviour since the day they moved in, and she is keen to have them evicted as soon as possible. However they have signed a twelve month contract and with no break clause in the contract so she is stuck with them until the end of the tenancy.
The landlord could try evicting the tenants using what is known as a Section 8 Notice, but she will have to prove that their anti-social behaviour breaches the terms of the tenancy and, even if she is successful, the process can drag on for months.
An initial six month fixed contract, allows either party to end the tenancy at the end of the term, without financial penalty. It means that the landlord or the tenant can give notice to end the tenancy after the fixed term; and of course this cannot be within the first six months unless both parties agree.
A six month contract is also a useful safety net in case your circumstances suddenly change and you need to sell your rental property quickly, or, if you are renting out your home, if you need to move back in. It will allow you to end the tenancy without any stress or hassle.
Some landlords prefer signing up to a twelve month contract to prevent tenants from leaving early, however I believe it’s better to risk losing a good tenant than to get stuck with a bad one. After all, a happy tenant is unlikely to leave without good reason and in my experience , tenants are always keen to renew their contract if they are happy.
Please feel free to contact me, if you have any questions about lettings, property management or our levels of service.
Chamak Digwa, ARLA Licensed Agent