HMO queries, tenants, deposits etc

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    HMO queries, tenants, deposits etc

    Hi and thanks for your help and advice.

    OK firstly I probably sorted all this out earlier but I'm in process of getting it all sorted at the moment. Background history - I live in and look after (manage on behalf of the owner/LL)who is a friend of mine that resides abroad. The agreement is a verbal one - I keep an eye on/look after his property in exchange for 'cheap' rent. I find tenants and rent out each room all inclusive of bills. The tenants pay the rent to me, I pay the bills and then transfer the rent to the LL. The tenants were on current AST's but due to the friendly manner of the place with me here etc they aren't current and so now I assume tenants are on 'periodic tenancy agreements'. I have only recently deposited 'bond' money into the DPS. I know should of done way earlier but there was never a problem with a tenant getting their deposit money back as had people renting and then departing in the past. I am in the process of getting the property HMO licensed with the local council. Also getting the relevant certificates for the license etc.

    OK my queries:

    Is there anything else that I should be sorting/taking care of?

    Can I (should I) write up new AST's? Can I if tenants agree?

    What are the issues (time frames, notices etc) I should be aware of if wanting to evict any single tenant?

    What are the issues (time frames, notices etc)if the owner/LL would like to return to the UK and take back his house?

    Many thanks in advance

    #2
    Lots of issues here, many of which you might not beware of. If a license is required, you should not really have tenants living there yet, as you are breaching the license requirements. Do you know the property actually meets the license requirements? I am unfamiliar with HMO specs, but believe things like fire extinguishers, fire doors, smoke detectors etc are a compulsory requirement.

    Are you handling the HMRC tax returns or paying tax due from the rent on behalf of the LL? LLs living abroad need to register with HMRC - if yours has not done this, HMRC can come after you and the other tenants to settle their tax bill.

    Are you named as the LL on the tenancy agreements or is the "owners" named? If its the owner, have all tenancy agreements got a name and address included in England/Wales for serving notices (this could be you). If not, then under housing regs, the LL cannot charge any rent until such an address is provided. This does not mean rent is not due, but tenants should withhold the rent amount until the address is provided, when all arrears should be paid.

    I think you would benefit from reading this post:

    http://forums.moneysavingexpert.com/...2&postcount=12

    and all the links it contains.

    This type of casual arrangement with your friend has a habit of going pear-shaped pretty quickly, and I would suggest you get a formal written agreement drawn up between you and your friend, detailing your responsibilities, otherwise I can see a lot of finger pointing and your word against his if something drastic goes wrong with the property, and you might end up being sued for something that is not your liability. Friends very quickly become ex-friends where money is involved!!!!

    Regarding new AST's, the tenant's have no obligation to sign them, as the current ones are still valid, albeit now on a periodic basis. Has each tenant got their own agreement or are they on a joint tenancy?

    As for notice, there is no quick way to end an AST agreement. If the agreement is periodic, you need to issue an valid S21 notice, giving 2 month's that LL is seeking possession. However, this does not mean tenant has to leave then, as once the 2 months is up, LL would need to apply to court to enforce the eviction - this could take another 4-6 weeks, so if there is a chance your LL wants the place back, allow 3-4 months atleast before you can secure the place as vacant.

    As you have only recently protected the deposits, this has already breached the deposit protection rules, and in order to issue a valid notice, the deposit must be returned in full before you issue the notice.

    Have you provided all tenants with the full prescribed information from the scheme you have used? Sadly, you have a lot to learn, and taking on all this responsibility for an absent LL may yet cost you dear!

    Comment


      #3
      Thanks for reply.

      Have registered the house for HMO license. Waiting for the application pack from the council. Have smoke alarms and getting the fire blanket and extinguisher etc. Spoke to council rep and dealing with that.

      No idea about tax issues. Owner has dealt with HMRC re house and I keep all receipts etc for tax claims.

      All tenancy agreements have owners parents address listed. You said
      'have all tenancy agreements got a name and address included in England/Wales for serving notices (this could be you)'
      Not sure what you meant here!

      Regarding the notice etc (s21's). Can I serve them or will it be the LL/owner who would have to serve (send)? I've mentioned that I wanted to move out with GF in January. He said could I stay until March as that's his next planned trip back to UK.

      This I don't understand
      'As you have only recently protected the deposits, this has already breached the deposit protection rules, and in order to issue a valid notice, the deposit must be returned in full before you issue the notice'
      Read on here that deposits had to be protected for any notice etc to be valid when served.

      Have let tenants know about scheme used.

      Comment


        #4
        If the LL wants one of the tenants to leave he'd have to serve a s21 notice right?
        He'd have to give 2 months notice right?
        At the end of that two months if the tenant hasn't left he'd have to get a court order right?
        But if he's overseas - how does he do that?

        Comment


          #5
          RE the tenancy deposit - lodged with DPS as thought was right thing to do even after significant time but above says
          'As you have only recently protected the deposits, this has already breached the deposit protection rules, and in order to issue a valid notice, the deposit must be returned in full before you issue the notice.'
          So should I return all deposits? Then no protection for damage etc. After returning should I then ask for deposit again and then lodge with DPS? Am I able to lodge deposit?

          Comment


            #6
            Originally posted by rapper57 View Post
            If the LL wants one of the tenants to leave he'd have to serve a s21 notice right?
            Yes, either a notice under section 21(1)(b) or section 21(4)(a) of the 1988 Housing Act. Important to get the right notice and to complete correctly

            He'd have to give 2 months notice right?
            A minimum of 2 months - could easily be almost 3

            At the end of that two months if the tenant hasn't left he'd have to get a court order right?
            Tenant has no obligation to leave whatsoever. The tenancy continues until the landlord both gets a court order and gets it enforced by court bailiffs.

            But if he's overseas - how does he do that?
            He employs a solicitor for anything beyond the section 21 notice.

            Originally posted by rapper57 View Post
            RE the tenancy deposit - lodged with DPS as thought was right thing to do even after significant time but above says
            'As you have only recently protected the deposits, this has already breached the deposit protection rules, and in order to issue a valid notice, the deposit must be returned in full before you issue the notice.'
            So should I return all deposits?
            You will have to before you can serve a valid section 21 notice.

            Then no protection for damage etc.
            Correct - but the landlord can still sue the tenants for damages

            After returning should I then ask for deposit again and then lodge with DPS? Am I able to lodge deposit?
            You can ask - tenants have no obligation to comply.

            Indeed, tenants can now sue the landlord or yourself for a considerable amount of money as a result of the late protection.

            You do realise that you are acting as an agent - and if the landlord does not pay his taxes, HMRC can come after you.

            Comment


              #7
              Get out and get out quick !!

              WHY waste so much time and energy on something you aren't being properly rewarded for? A "low rent" isn't anywhere near sufficient for what you're doing.

              The more and more that you get into trying to sort the mess out for your friend, the more and more he will be blaming you when you have left and he needs a scapegoat.

              Offer your apologies to him but stick to your January deadline.

              Not wanting to sound disrespectful but you aren't coming across as having any clue on what you're doing - simply accepting some cash and putting it into a bank account is nowhere near the level you should have been "working" to a very long time ago.

              This lazy LL has been taking advantage of your "friendship" - if he is a friend or not, you will soon find out when you move out and he has to deal with the mess he's created.

              This really isn't your problem to sort - tell the LL you don't understand any of it and let him deal with it.

              Hopefully, you will be gone by the time the LA and every other Gov dept come knocking on the door wanting their pound of flesh.

              Comment


                #8
                Originally posted by SouthWestCouple View Post
                Get out and get out quick !!
                I agree with that sentiment 100%, just out of curiosity who is going to be the licence holder of this property, since the owner lives away?

                Comment

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