Why does it have to be this way?

Sitting in a client's office the other day contemplating a new rented key-worker scheme, I asked myself why registered social landlords let these homes in the way they do – and if it could be different.

Most key-worker developments are let on assured shorthold tenancies. The reason for this is that the tenancy can be ended if the key worker stops being a key worker. There is no legal problem with this, but does it work in practice? Many early key-worker schemes were for NHS staff in former NHS nurses homes, often with the NHS deducting rent from salaries.

The landlord knew exactly when the tenant left the NHS' employment because their rent was no longer being collected by their employer. Such projects still exist but many key-worker schemes now do not relate to any particular employer and salary deductions for rent are rare.

Out of the loop
So how will the landlord know if a tenant leaves her teaching job, for example, for a job in a bank? The tenancy agreement can and should contain a clause saying they must notify the landlord if they change employment. If they do not comply they are in breach of a contractual obligation – but the landlord suffers no financial loss so there is little comeback if the landlord discovers the truth two years later.

I have seen some key-worker schemes let on assured tenancies with a provision that it is a term of the tenancy that the key worker continues to be a key worker. The landlord thinks that if the tenant breaches this – and of course the same issues arise around finding out whether they have – they can get possession on grounds of a breach of tenancy.

There are two problems with this. The court might not think it reasonable to make a possession order; and a term of the tenancy that relates to a personal matter – which would include working in a particular job – is not enforceable as a breach of the tenancy. The case law on this is old but I doubt anyone would want to spend the money to find out if the courts still agree with it.

So if the funding and nomination arrangements require the RSL to at least try to make sure the homes are occupied by key workers, an assured shorthold it will have to be. But no RSL should promise that only key workers will ever live there – that would be a promise that's very hard to keep.

RSLs will need to keep a lookout for restrictive planning permissions that only allow occupation for key workers. Getting them varied is not easy, and they can cause problems if, say, there are no key workers around for an RSL to let to.

Since the 1996 Housing Act, an assured shorthold can be either periodic or fixed term. But some RSLs are still stuck in pre-1996 mode – when the minimum term for an assured shorthold was six months. It is still true that even if you offer a periodic assured shorthold you cannot get a possession order except for breach within six months.

Landlords must look out for restrictive planning permissions that only allow key workers to occupy homes. Getting them varied is not easy

In the private sector six-, nine- and 12-month assured shortholds are common. Private landlords will then often renew after renegotiating the rent. Private tenants cannot usually end the tenancy during that period. RSLs often use assured shortholds based on their normal assured tenancy, which allow the tenant to leave by giving notice.

RSLs should consider whether to take a leaf out of the private sector's book and hold the tenant to the contracted period. Or if not, why not encourage them to stay longer with a three-year fixed term – with a tenant's right to break every six months?

RSLs often don't take deposits from tenants for this type of scheme. If they do, it is important that the tenancy agreement has clear provisions about the circumstances in which the deposit will not be returned in full. These must be fair, otherwise they may be unenforceable.

The government recently announced plans to legislate to protect tenants' deposits – a constant source of problems in the private sector (HT 14 May, page 8). Whether their proposals will affect RSLs remains to be seen.

Be more specific
There is an inevitable tendency to use the general-needs tenancy agreement and turn it into an assured shorthold. This is probably not the best approach. RSLs do need to address what rights and obligations they expect of their key-worker tenants. Much will be the same, but extended rights of succession will be inappropriate.

The RSL may want to exclude any right to assign and rights to sublet. Some RSLs may be happy for their key-worker tenants to have lodgers; others may not. The important thing is that a real choice is made, rather than rights given through inappropriate tenancies.

If, as is common, white goods such as cookers and washing machines are being provided, you may need clear clauses about responsibility for repairs and servicing them.

With a fixed term of up to 12 months, you would not usually need a rent review clause.