The preference for letting property for 1 year is often suitable for both tenant and landlord alike, however, if we do start to see people showing a propensity for longer term renting then creating a lease that facilitates this is vital.
The fact is that the ’12 month term’ is partly irrelevant, what it does do is set out the terms and agreements; but during that 12 months the renter obtains the right to stay for a longer period under ‘Part 4’ of the Residential tenancies act 2004 (a 4yr cycle).
This is often a point of contention in eviction cases, so it is vital that people wishing to avail of Part 4 write to the landlord stating this between 3 and 1 months before the end of the tenancy date, although it can exist even without notification being given.
But today we’ll assume that both parties to the lease want to engage in a longer term choice. There are a few primary issues that each of them will want to cover.
1. Who pays for certain aspects of the upkeep? It is a good idea to sit down and negotiate this point and have it written into the lease, so mowing lawns (for instance) may be assumed to be the landlords responsibility -it is – but if you agree to have the tenant do it then it should stand.
2. Rent reviews is a big one, a longer lease comes with the risk that the person can fix their cost going forward, for this reason we would suggest doing two things. Firstly have a review date, and secondly have a ‘collar’. The review date needs agreement, so every two or three years would be a good idea. The ‘collar’ sets out the change – so if you had a 15% collar it would mean that the rent at that review date cannot go up or down by more than 15% and otherwise you set it at ‘market rent’.
3. The ‘market rent’ should be the average of two estate agent opinions, one from each party; not ideal, perhaps not even totally accurate but it is a way to ensure that 3rd party opinion is front and centre rather than personal battle on the topic.
These are the two main considerations, there may be others for wear & tear and maintenance of other things that you may want to negotiate on. Negotiating at the outset doesn’t guarantee results, naturally, at any point either party can renege on their agreement and revert to the PRTB or courts or otherwise, but it does take care of the majority of issues you might encounter.
Agreeing these things in advance also sets out pricing which is one of the main concerns of a renter (along with quality levels/location etc.).