Tenant wants to totally redo my loft at his expense - implications?

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  • Tenant wants to totally redo my loft at his expense - implications?

    Hi all,

    My tenant has just called me saying that he wants to get a live-in nanny. He is renting my three-bedroom house (AST agreement). Currently the loft is utilised as storage for suitcases and other junk. He has gotten a quote that to convert it into a bedroom (covering the floors and walls, installing powerpoints etc) will cost about £6000 which, and here's the rainbow, his company will cover as living expenses.

    Aside from the it's-too-good-to-be-true, is there anything I need to consider that I am currently completely ignorant of? He is a nice guy, with a nice family, so I am not concerned with anything being dodgy. He does have a well-paid job but it entails him travelling a lot hence his want of a nanny. His company do have this scheme to help their employees.

    I just want to make sure I would not be in breach of any laws or tax issues, or whether in 18 months time when his family move out, something is going to bite me in the bum because he has spent so much money on my property.

    Thanks.
    Last edited by sibec; 13-03-2010, 09:20 AM. Reason: Edited to add: He's not extending anything so as I see it no planning permission necessary

  • #2
    Make him get planning permission if needed, an architect to design the conversion and a surveyor to do the maths. The insist he gest building consent (which definitely will be) and check these at every stage of the process to ensure legality.

    Insist he uses a reputable builder whose work on similar projects you can inspect yourself before agreeing to give him the job.

    He must agree not to try to claim any portion of the value it adds to the property when it is finally sold (don't know whether he can do this anyway).

    All these conditions must be written into an agreement, which both of you sign.

    I'm sure somebody more legal than me will be able to tell you exactly what form this agreement should take.
    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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    • #3
      Originally posted by sibec View Post
      Is something is going to bite me in the bum because he has spent so much money on my property.
      Gut feeling, says, don't do it.
      Do as "mind the gap" suggests, But ----

      It's you that has to get building consent, not someone who does not own the property, is it not ?

      option 2 ( option one is "mind the gap's good suggestion ) -- If your AST says, " not to make any alterations to the property without authorisation", then say you can't authorise it, but you will not do anything about the breach at the moment, that way, it protects you, so there could be no claim from him in the future. ( put that to him ) But it has to be verbal, as once you give him written authorisation, ( verbal, or a short note to say - yes, and not an official document ) you could end up in a very complicated situation if he does turn nasty.

      Saying that the laws on houses, AST's is very complicated, or how ever you want to phrase it, and you turning a blind eye, but overseeing the conversion, is the best for you, as you can't afford counter claims, or his employer getting involved in disputes further down the line.

      There are 2 types of "He is a nice guy", the genuine Gentlemen who honours agreements via the "hand shake" , and those that have an ulterior motive, and keep it from you.

      Don't at any point pay for anything yourself.

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      • #4
        We are talking £25k-£50k here. I am still trying to underdstand why the T's employer/company is willing to throw so much money at a rental property in which they have no interest and with a fixed term tenancy in place.

        Tax dodge?
        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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        • #5
          Originally posted by mind the gap View Post
          We are talking £25k-£50k here
          Well, the OP said £6k so presumably there's already a habitable space up there; it doesn't need a full conversion.

          On the one hand you I wouldn't necessarily want to look a gift horse in the mouth but I do find the whole thing a little bit odd. Personally I'd be very wary about losing control of the situation - what happens if the conversion gets screwed up, costing you a lot of money in the future to put right?

          As MTG says, building control involvement definitely needed; not sure about planning permission now as I think the rules may have changed quite recently. Definitely check up though (it will cost you money to get something in writing from the planners confirming that no permission is needed). If there's any change to the external appearance (eg roof windows) that is likely to impact on permissions, especially if happens to be in a conservation area).

          If the work gets done, it won't have any effect on your tenant's rights; he will still be subject to the same notice terms as before with no financial restitution despite spending all that money on the property. You might want to make that point crystal clear to the tenant and his employer at the outset, to avoid any misunderstandings in the future.

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          • #6
            Sorry - I missed the £6k bit! Even so, it's a lot of money, isn't it.
            'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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            • #7
              Best advice: no. It's L's property; so T ought not to be doing anything with its structure, no matter on what financial basis.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

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              • #8
                Originally posted by mind the gap View Post
                We are talking £25k-£50k here. I am still trying to underdstand why the T's employer/company is willing to throw so much money at a rental property in which they have no interest and with a fixed term tenancy in place.

                Tax dodge?
                I was thinking of the tax angle, but from a different angle.

                If my employer paid for a loft conversion at my abode then it would constitute a benefit in kind. For which I'd pay tax & NI. I'm pretty sure the LL wouldn't be receiving a BIK though.

                Is the tenant in question an MP and property owned by his wife/secretary I wonder?

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