How Bad Is This Inventory?

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  • Physicsman
    replied
    Lawcruncher:

    Agreed. There is usually an element of risk in most things. I'm leaning towards going ahead with exchange and then completion. Will think and assess over the weekend and decide on Monday.

    I appreciate your input and everybody else who replied! Thank you all.

    Leave a comment:


  • Lawcruncher
    replied
    As theartfullogder says, it is nice to see someone going into something thoroughly before committing themselves. However, there is the danger of going into too much detail and frightening yourself unnecessarily. It is important to bear in mind that having perfect documentation, though desirable, does not guarantee that much and, equally, that imperfect documentation is by means fatal. The all important question is whether you will get a good tenant and whether he will stay good. The first part is not easy to assess and the second nearly impossible. There is inevitably going to be a degree of risk. Further, if you decide to withdraw from this deal, the chances are that the next one will throw up similar problems.

    Leave a comment:


  • theartfullodger
    replied
    Wow!! You'll be fine, great!!

    Leave a comment:


  • Physicsman
    replied
    theartfullodger:

    Thank you! I'm taking this seriously so have bought several books and am reading my way through them. Have applied to join the NLA/RLA. I want to ensure I meet all my duties and responsibilities to the tenant.

    I mean, I've seen it said that being a landlord is a business and the tenant is your customer. In business you have to treat your customer well (within reason) to keep them happy and yourself in business and profit.

    So I'm reading here and other property forums etc to make sure I maintain a good relationship.

    I'm hoping I have a good tenant and that I don't even get a dispute when they leave! So all of this thread is just a pre-caution risk assessment to see if it is worth while to go ahead and exchange contracts!

    Love your suggestion of the wine/gift on first meeting. I'll definitely do it that way! Thanks again!

    Leave a comment:


  • theartfullodger
    replied
    Physicsman: Welcome to LLZ!!

    How refreshing to see someone asking questions BEFORE they start - I wish I had it would have saved me ££££!!!

    Join a LL assoc & do one of their courses, chances are it will save you more than it costs..
    http://www.rla.org.uk/landlord/courses/course1.shtml

    If taking pics ask tenant's permission (it is their home, their property**, merely your investment...)..

    In your shoes at first meeting I'd take bottle-of-wine/flowers & just say hello., not do inspection then, .. they will likely feel nervous & meeting a half-human LL may be a refreshing surprise...

    Cheers!!

    ** - see...
    http://www.landlordlawblog.co.uk/201...its-still-his/

    Leave a comment:


  • Physicsman
    replied
    ram:

    Thanks for your input.

    I'm definitely planning to do an inspection upon completion (assuming I go ahead with contract exchange and completion!).

    Will also take photos then, although that will just cover the conditions as they are when I take the pictures, but not when the tenant moved in a few months ago. So if they have scratched or dented something already, then I'm out of luck!

    For future tenants, I'll be handling references/checks for the prospective tenants and not the developer. They only handled it this time because the let the flat out before they sold it.

    Supposedly one of the bonus points in that the rental investor (me) starts earning as soon as I complete. Double edged bonus there!

    Leave a comment:


  • Physicsman
    replied
    theartfullodger: I've removed the names - appreciate you letting me know it is against the rules. Saved me from getting my knuckles rapped!

    The tenancy agreement only has the name of the tenant and not any other of her personal details. I'm guessing that is why they let me have a copy - assuming the property developer is legit and not trying to hide a bad tenant of course!!

    Lawcruncher:
    The AST defines the Property as "with the furniture fixtures and effects in the property including all matters specified in the inventory".

    Then there are a couple of clauses in the AST such as "keep the Property in good repair and well decorated (except for repairs which the Landlord agrees to carry out). There are some other clauses about not removing Contents, keep the contents in good repair and condition except reasonable wear and tear etc.

    My trepidation is that if any dispute were to arise, the inventory doesn't specify the condition of the Contents (brand new). Or even the make/model of the Contents.

    This exposes me to some risk if the tenant wanted to take any of the contents with them and replace with a poorer/cheaper quality item. Or if they damage the contents, e.g. dent the fridge door or something, they could argue that was already there when they moved in.

    Leave a comment:


  • ram
    replied
    one thing in your favour is "new upon handover" and hoping it will
    be read as all items were new. ( You would have to swear that this
    was the case, even if you can't prove it )

    One option is to tell the tenants, when you inform them that you are
    the new landlord, ( rent is not payable until you do ) is that as the
    property and all items supplied in it now belong to you, and you need
    to
    1) Do an inspection ( as is the right of any landlord of your assets,
    against original specification, ) and to do a normal 3 monthly inspection
    but an inspection on completion, as a new landlord, and thereafter
    at 3 / 6 monthly as per normal conditions of the A.S.T.
    2) while there, you can do an inventory with photos etc.
    ( State that fact when you request number 1 )

    Data protection.
    Tell the developer that any future people that are interested in
    renting your property, you will have full access to all information, all
    the checks will be available to you, and if you can't see the checks
    and references, then you will not offer the prospective tenant
    the flat.
    You are in the same position now, in that before you can allow
    any tenant to rent from you, you need to see all the checks and
    references before you will allow them to say in your recently
    purchased property.
    tell them if checks and references are not supplied, you will have
    no option but to inform the tenants that information is being withheld
    by the developer, and the Developer, via their none actions, will
    leave you with no alternative but to evict the tenants.
    Stating that the name and address of the developer will be given
    to the tenants, and they may decide to take the matter further, for
    loss of their home.

    Might work ?

    Leave a comment:


  • Lawcruncher
    replied
    It is of course not simply a question of how good the inventory is, but how good the tenancy agreement is.

    An "inventory" is often a combination of a list of contents and a description of the state of the property. These are two separate things and both need to be dealt with in the agreement setting out the tenant's obligations and the extent to which those obligations are limited. In other words the precise purpose of the inventory needs to spelled out, otherwise it is no more than evidence of what the position was when the tenancy started.

    Leave a comment:


  • theartfullodger
    replied
    Remove names - against LLZ rules: you are sure it isn't "Big Developers Inc: Luton 2012 Ltd"???

    Odd that DPA did not stop them giving you personal details about tenant in the tenancy agreement, yet they seem hesitant about checks: Funny that eh??

    Leave a comment:


  • Physicsman
    replied
    They did give me a copy of the tenancy agreement. That looks fine and standard, similar to the ones you can download here or on other sites like landlord law, NLA/RLA etc.

    The developer have been around for awhile, since 94 I think. Probably not a fly by night cowboy outfit - but you never know! It is a risk but haven't found any insurance for it!

    JJlandlord: I'll try what you suggest and see what the developer and tenant say. Good suggestion - thanks!

    Leave a comment:


  • jjlandlord
    replied
    Not sure if this is covered by DPA, but if it were it would prevent due diligence in many such commercial transactions, which does not seem very good...

    Any case, should there be a concern there it can be easily resolved by requesting the tenant to agree to this information being disclosed to you.
    If the developer refuses, or even if the tenant refuses, it may still provide you with useful information.

    Leave a comment:


  • theartfullodger
    replied
    re DPA: It depends on what the tenancy says, some permit info to be passed to others. btw I would also want to see (SEE!!) the tenancy agreement...

    I suspect hiding behind DPA is a useful excuse, and frankly would worry me... you could point out S35 of the DPA 1998
    http://www.legislation.gov.uk/ukpga/1998/29/section/35
    allows disclosure in connection with prospective court case and if they don't bleedin' give you the stuff you'll be suing.....

    £5 says this developer may have only been in business for a short time & possibly never filed accounts: Often a particular company is set up for just that development... if so don't expect any come-back in a years time...

    Clip clop, clip clop, hi-ho-silver...!!! My that herd of beef look fine don't they...

    Leave a comment:


  • Physicsman
    replied
    I've asked to see the checks. The developer has stated they cannot give them to me until after completion due to data protection issues.

    However, the developer has said through the solicitors that the tenant passed all the checks. That's still vague so it is a risk I agree!

    What I've asked them for instead (via my solicitor) is a statement from the seller via their solicitor whether there have been any problems with the tenant and include details if any, for example rental payments in arrears, complaints from neighbours etc.

    Also, I've asked them to provide rental statements for the last 3 months.

    Edited to add: did the developers lie/make a mistake about saying they can't give me the checks before exchange? That is, data protection is not an issue?

    Leave a comment:


  • jjlandlord
    replied
    Originally posted by Physicsman View Post
    Fortunately in this case, credit & reference checks were performed (my solicitor requested that the seller confirm this via their solicitors so doubtful they lied!) They will also give me copies upon completion when I am legally the tenants new landlord.
    I'm with Artful: They are having a laugh.
    You want to see all the references, credit check reports, etc. before making the decision to buy and exchange contracts.

    Actually, this would raise red flags for me because it might suggest that they do not want you to see these documents before it's too late, which is not a good sign.

    Leave a comment:

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