New AST or let it go to periodic?

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    New AST or let it go to periodic?

    Hello people,

    My tenants are coming to the end of their 12 month Assured Shorthold tenancy. They have been poor at paying rent - late (by a few days) every single month, and after about 6 months they stopped paying. Eventually housing benefit kicked in - and they failed to pass on some of the housing benefit money to me, and lied about it.

    However I got later HB payments paid direclty to me, and we managed to agree a schedule to repay the arrears, which (with some encouragement) they have stuck to (amount-wise, although it's been late). They're now a small amount in arrears (£200 or so) and clearing it at about £60/month.

    In short, not a nightmare, but not brilliant tenants. I think on balance I will let them continue the tenancy if they want to (which I believe they do).

    The question is, should I get a new AST agreement done, or should I let it roll on and become periodic?

    My understanding is that everything remains the same if it goes periodic, except that I can give 2 months' notice (to end on a rent day) at any point, and they can give one month's likewise. That would suit me fine, as if they decided to leave I wouldn't lose sleep, and I would be happy not having to get an eviction order if they start messing around again - just give them notice.

    Are there any disadvantages from the L's point-of-view?

    In particular, does the guarantor remain the guarantor, or would she have to explicitly agree to remaining the guarantor?

    Thanks,
    Mark

    #2
    I would let it go onto a periodic tenancy.

    If you give them another fixed term, they can shaft you again quite easily.

    What does the guarantors agreement say?
    Allow tenants to protect their own deposits. I want free money when they do it wrong

    Comment


      #3
      Originally posted by marksmith View Post
      The question is, should I get a new AST agreement done, or should I let it roll on and become periodic?

      My understanding is that everything remains the same if it goes periodic, except that I can give 2 months' notice (to end on a rent day) at any point, and they can give one month's likewise. That would suit me fine, as if they decided to leave I wouldn't lose sleep, and I would be happy not having to get an eviction order if they start messing around again - just give them notice.

      In particular, does the guarantor remain the guarantor, or would she have to explicitly agree to remaining the guarantor?
      If you let them go periodic, 2 months notice does not get them out - you still need a court order. You can serve a s21(4)(a) as soon as the tenancy becomes periodic which (once 2 months have passed) will allow you to commence court proceedings without delay. I wouldn't usually suggest this, as in my mind it denies a tenant their right to 2 months notice, but I think in this case it would be wise.

      With regard to the guarantor. IF the deed of guarantee states that the guarantor is bound for the duration of the tenancy, you are fine. If they are bound for the duration of the tenancy agreement then at the end of the fixed term they cease to be liable.

      Comment


        #4
        Thanks for the replies. I will check the contract regarding the guarantor. Might also be worth speaking to her, I suppose, to double-check she's OK with it - she's already £££ out of pocket and possibly not too happy with the tenants.

        Originally posted by Snorkerz View Post
        If you let them go periodic, 2 months notice does not get them out - you still need a court order.
        Really? Is anyone else able to concur please, as that's not what I understood at all.

        Thanks!
        -M.

        Comment


          #5
          Originally posted by marksmith View Post


          Really? Is anyone else able to concur please, as that's not what I understood at all.

          Thanks!
          -M.
          The only way to legally get a tenant out that doesn't want to move out is via the court system.
          Allow tenants to protect their own deposits. I want free money when they do it wrong

          Comment


            #6
            Fraid so

            Originally posted by marksmith View Post
            Thanks for the replies. I will check the contract regarding the guarantor. Might also be worth speaking to her, I suppose, to double-check she's OK with it - she's already £££ out of pocket and possibly not too happy with the tenants.


            Really? Is anyone else able to concur please, as that's not what I understood at all.

            Thanks!
            -M.
            Yes - If they dont go voluntarily after 2 months you have to go for enforcement order. If they ignore that you have to go back for bailifs appointment.

            Bin there and got the scars to prove it.

            Comment


              #7
              Originally posted by marksmith View Post
              Thanks for the replies. I will check the contract regarding the guarantor. Might also be worth speaking to her, I suppose, to double-check she's OK with it - she's already £££ out of pocket and possibly not too happy with the tenants.
              -M.
              I think this sounds like a really bad idea - she is either bound or she isn't - if you ask whether she wants to continue to a have a liability when there is nothing in it for her I pretty well guarantee the answer will be no. I would specifically avoid any suggestion whatever that she might not be liable.

              Check the paperwork, if she isn't bound, consider issuing a S21 to limit your exposure and if she is bound leave things be.

              Comment


                #8
                Thanks for all the replies.

                Good point Fletchj - if she continues to be liable I'll just keep quiet. If she's not, I'll either get them to find a guarantor (same one if she'll go for it) or issue a S21.

                Regarding the notice period, while I understand if they don't want to go then I have to take legal action, periodic still has to be no worse than a new AST - but better if they DO cooperate... doesn't it?

                Is the following, or is the following not, true?

                With a new AST I'd have to either
                a) wait until the end of the (say) 6 months if I just want them out for my own reasons (and then get an eviction order if they don't cooperate)
                b) wait until they're 8 weeks in arrears and get an eviction order.

                With periodic, either
                a) give them 2 months notice to leave (and then get an eviction order if they don't cooperate)
                b) wait until they're 8 weeks in arrears and get an eviction order.


                Thanks,
                Mark

                Comment


                  #9
                  Originally posted by marksmith View Post
                  With a new AST I'd have to either
                  a) wait until the end of the (say) 6 months if I just want them out for my own reasons (and then get an eviction order if they don't cooperate)
                  b) wait until they're 8 weeks in arrears and get an eviction order.

                  With periodic, either
                  a) give them 2 months notice to leave (and then get an eviction order if they don't cooperate)
                  b) wait until they're 8 weeks in arrears and get an eviction order.
                  Basically right except:

                  a) If you issue the s21 in advance, it remains valid - so you can avoid the 2 months notice
                  b) If they pay monthly, the '8 weeks in arrears' is '2 months unpaid'.

                  Eg (Rent due 12th of month)

                  12 May 2010 - Rent Due
                  13 May 2010 - 1 month unpaid, 1 day in arrears
                  12 June 2010 - No rent - 1 month unpaid, 1 month in arrears
                  13 June 2010 - 2 months unpaid, 1 month & 1 day in arrears.

                  There is a midway option on your choices - you don't have to issue an AST for 6 months, it can be almost any length. How about 3 months for now and if tenants behave during that 3 months you can issue a longer one afterwards?

                  Comment


                    #10
                    Excellent, thanks Snorkerz. Clear and useful.

                    So, nearly there now. Last question to help me make the decision.

                    What is/are the disadvantage(s) of letting it go periodic?

                    Thanks,
                    Mark

                    Comment


                      #11
                      Originally posted by marksmith View Post
                      What is/are the disadvantage(s) of letting it go periodic?
                      You can be lumbered with finding a new tenant at relatively short notice - however with tenants who may prove to be unreliable, that is probably not too much of an issue.

                      If you issue a s21(1)(b) notice NOW (ie before the end of the fixed term) you can have that in place should you need to evict - once that is done, it is feasible to have the bailiffs round within 2 months of making the decision - for whatever reason you choose.

                      Other than that, all the rights on both sides remain the same.

                      Comment

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