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LJ Hooker calls for extended residential leases

By Ryan Ellem on Mar 06 2017


LJ Hooker aims to help alleviate the Australian renter’s fear of insecurity by increasing the length of residential contracts. 

This simple change, similar to what occurs with commercial property leases, will extend residential leases past the traditional six or 12 month lease period. 

Other lease provisions that occur in commercial agreements are things like set rent reviews and lease extension options; these should also be considered in residential leasing markets.

LJ Hooker Head of Research, Matthew Tiller said that commercial-style; three, five or even ten-year lease agreements and the conditions that come with these longer periods would be a better arrangement for both landlords and tenants.

“Long-term leases allow tenants in the commercial space to put their roots down and go about their business. Residential tenants should have the same option,” Mr Tiller said.

Mr Tiller also mentioned that there could be lease extension options that would allow tenants to increase the length of contract which is already a feature of commercial leases. 

LJ Hooker head of property investment management, Amy Sanderson says it would appeal to tenants and landlords if considered on a case-by-case basis. 

“It has been an option I’ve offered to investors over the years as they have been happy to pay a lease renewal fee based on the length of lease,” Ms Sanderson said.

 “It’s all about speaking with the investor and offer to match their needs to the tenant’s. A long-term investor will be better served with a long-term tenant.”

“After a 12-month period, when everyone is happy, it’s worth having a conversation about a longer-term lease with set rental increases for how much and when it will be,” she said. 
 

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