Under standard long term leasing arrangements, suitable properties can be leased to a local authority or an approved housing body (AHB) for periods of between 10 and 25 years. The local authority or AHB is responsible for day-to-day property maintenance. These dwellings are allocated dwellings and the social housing tenant signs a tenancy agreement with the local authority or AHB, who acts as the landlord to tenants. Responsibility for the structural maintenance of the dwelling remains with the owner of the dwelling.
A discount of 20% is applied to market rent for the property to take account of the tenant management and property maintenance responsibilities taken on by the local authority or AHB. Where a management company is in place and an annual service charge is payable, a discount of 15% is applied. In these circumstances, the owner of the property is responsible for payment of the annual service charge. The day-to-day maintenance of the properties is funded from the differential rent payable to the local authority in respect of the property. Properties entering the leasing scheme must meet all relevant statutory requirements and local authorities may set out additional requirements for properties entering into their leasing programme.
Under enhanced long term leasing arrangements, the owner of the property is required to provide day-to-day maintenance of the properties under a schedule of management services. A discount of 5% is applied to the market rent to take account of the tenant management responsibilities taken on by the local authority. Penalties are applied and deducted from the rent where services are not performed as required. Any service charges payable are paid by the owner of the property.
Maintaining the landlord tenant relationship between the local authority or AHB and the social housing tenant under the long term leasing schemes is key feature of the scheme for both local authorities and social housing tenants. This feature means that a discounted market rent is paid in respect of these dwellings.
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