The reforms that promise an easier life for landlords

Click to follow

The rising damp of regulation in the rented sector is set to be treated. Under the final draft of a report by the Law Commission, the "archaic, complex and inflexible" rules governing the relationships between landlords and tenants could be scrapped in the next 18 months.

And instead of the 22 different types of tenancy agreement - many of which date back over 100 years and are largely irrelevant - there will be just two new simple documents.

One will be a "standard contract" for the private rented sector, including landlords with buy-to-let properties, and the other a "secure contract" applying to social housing tenants.

If the proposals become law, they will constitute the biggest-ever clean-up of the sector, says Martin Partington, who has led the five-year reform project at the Law Commission. "Over the years, every government that has got involved with rented housing [has] put new laws in place and kept the old ones, which has left a confusing array of different types of tenure.

"These reforms aim to sweep all this away and make things clearer and simpler for both landlord and tenant."

Today, the vast majority of private landlords - those who earn less than £25,000 in rent each year from one property - use the "assured shorthold tenancy agreement" (Asta) introduced in the 1988 Housing Act. This contains rules that usually cover rent levels, liability for damage and permission for pets.

But it also comes in many different, and complicated, forms, says Professor Partington, and is often altered by the landlord with each new tenant.

By 2008, this might no longer be the case as the new regime imposes a uniform and simple-to-understand agreement between owner and tenant. "It will be more like a contract between an employer and employee," says James Driscoll at City law firm Trowers & Hamlins.

The standard contract will also enhance protection for buy-to-let landlords. At the moment, for example, tenants have the right to stay for at least six months, providing no clause in the contract has been violated.

Under the new law, this protection will be scrapped and a landlord will be able to reclaim a property sooner - if he or she needs to sell up, say.

"It doesn't make economic sense for landlords to kick people out after two weeks anyway, but certain circumstances [can] mean that the property needs to be possessed earlier," says Professor Partington.

Although landlords will not be legally bound to replace Asta contracts with the new ones, there will be "big incentives" to do so, says the Law Commission report. For example, in the event of a tenant being taken to court for repossession of a property, the law will be less likely to recognise any other form of contract.

Project manager Clare Gray recently let the spare room in her two-bed flat to lodger Jan Engdorf, but she is now considering moving from her home in St Albans, Hertfordshire, and renting out the entire property. "I didn't know Jan before he moved in, so I used an Asta that a friend sent to me by email."

Clare made a few amendments to this, such as requiring one month's deposit up front rather than six weeks', and laying down her own ground rules and expectations of behaviour.

She thinks that the new scheme could help if a tenant ever proved troublesome.

"Provided the wording of the new government contract is clear and transparent, it's got to be a good thing."

Comments