The Model for a Private Sector Leasing Scheme
Summary
This model for a Private Sector Leasing Scheme has been developed after extensive research. This has involved not only talking to landlords at a number of workshops within the area for which the Scheme has been drawn up but also talking with some local authorities and registered social landlord’s (RSL) not only in this area but all round Britain who operate Private Sector Leasing Schemes. In addition the invaluable experience of Colne Housing Society Ltd has been drawn on extensively.
Further Information
All of those involved in Private Sector Leasing would agree, I think, that there are significant financial risks for the managing agents in such schemes. These can be minimised, however, by careful attention to the elements that go to make up such a scheme, such as the framework agreement between the local authority and the Registered Social Landlord, and the terms of the lease so that risk is shared between the parties. The hand-back procedure is also crucial so that a landlord can be confident of getting his property back on time and in good condition; whilst the RSL should also be sensitive to the occupiers of the property who may require help to find somewhere else suitable to live at the end of the lease term.
By taking on property that is in a decent condition in the first place and making clear the repairing and maintenance responsibilities of the owner, the RSL and the sub-tenant, the risks associated with leasing schemes can be further minimised. Good management will also go a long way to minimising the inherent risks.
Balancing this with offering an attractive enough rent to owners without being so generous that the expenses of running such a scheme fall unduly on the managing agent can be difficult, particularly as rents are subject to change from time to time. Whilst the rents offered to landlords may not be the top amount that a property could be rented out for on the open market, and think it is wise to consider that the sum offered is guaranteed for the period of the lease regardless of whether the property is occupied or not. At no time during the duration of the lease will the landlord be out of pocket because he doesn’t have a tenant for his property as these periods, known as voids, are the responsibility of the leaseholder and the owner will receive his rent regardless for the lease period. In addition the hassle that can arise for a landlord offering out their property on the open market will be largely alleviated.
Karen Langford
Project Manager
Safe Haven Project – Private Sector Leasing
Downloads
Workflow chart of the Scheme Model
Workflow Model
Framework Document
Non Repairing Lease
Repairing Lease
Gold Property Standard
Silver Property Standard
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