Newbie Landlord. Please advise

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    Newbie Landlord. Please advise

    I just put my property on the letting market through an agent. I already have an interested party, a family from Poland who have just moved to the UK a year ago and whose teenage children attend the local sixth form college.
    I have been told both parents in the medical profession( husband is an anesthetist, so say the agents)but they are not currently employed and they are looking for suitable positions. They are starting a medical language course to improve their English. But they are willing to pay 14 months rent in advance.
    So I am not sure what to do. One the one hand the fact that they are not currently employed is worrying but they are willing to pay a year's rent in advance. Also when I initially put property up for rent I was planning to take out some kind of insurance scheme against non payment of rent but this will not be possible now.

    #2
    Is property compliant with current legislation ie valid GSC & EPC?
    Do you have a B2L mortgage or lenders permission to Let?
    14 months rent in asdvace could cause problems for LL re fixed term/T period.
    Also both parents may find jobs anywhere in UK and need to move wanting most of unused rent back.
    You say both are in the med profession, but what grade Consultant or junior Dr?
    If you decide to accept them as Ts, stick with 6 month fixed term AST,
    2 month rent as deposit, fully protected and review in 4 months.
    Don't trust what LA tells you, require LA to provide all application paperwork subnitted and poss ref from language course provider & prev LL.
    If they cannot find a suitable position or just get homesick thay may return to Poland.

    Comment


      #3
      Good morning,

      This is an interesting one regarding 14 months rent in advance.

      Perhaps one of the wiser forum members can comment on the impact of accepting such a large initial payment...

      Can you start a 12 month AST fully paid for with 2 month deposit then at 10 months serve a S21?

      Comment


        #4
        Originally posted by mariner View Post
        Also both parents may find jobs anywhere in UK and need to move wanting most of unused rent back.
        I wouldn't say that this is much of a problem at the LL is not required to return unused rent of the T wants to Terminate early right?

        That's assuming the LL doesn't take possession and relet during the initial fixed period.

        I could be wrong...

        Comment


          #5
          Thanks for your responses.
          I do have permission from Lender to let.
          I also have valid GSC & EPC.
          I am also required to return any outstanding rent, should the tenants decide to move out.
          14 months was LA's idea as they thought I will not have to look for new tenants around Xmas 2013. This is one the main reasons I am considering present tenants as I am concerned I will not find anyone else for a few weeks, should I pass on them.
          Can someone please tell me what are the potential pitfalls with 14 months and re fixed term/T period.
          Once again thanks for all your help
          Llou

          Comment


            #6
            Sorry what i meant to say was there is a 6 month break clause that I can use , but not the tenants, and should I decide to invoke it, I will have to pay back outstanding rent. I understand that the tenants are committed to the 14 months.

            Comment


              #7
              Controversial. In the past it has been deemed unfair to have a break clause that is not available to the tenants. It might work but if the tenants ask for advice, they might find out they can use the clause too. I wouldnt recommend you do that. Bear in mind that even if you did use the break clause , you would have to refund the extra rent and that invoking the break clause wouldnt force them out anyway, until you applied to a court for possession, so not that dissimilar to a 6 month fixed term.

              Why not be open to them about your concerns. Ask them to pay 12 months up front + 2 deposit and give them a twelve month tenancy. If they leave, they will not be entitled to a refund, unless you agree on a surrender. Also tell them from beforehand that you will be serving a section 21 notice, that you will action at the end of the 12 months, if they dont find a job, or leave. They might be OK with it, or not. Then towards the end of the tenancy fixed term, if they are still unemployed, serve them the notice, as agreed. If you want, you can action it at the end of the fixed term which would take 2-3 months and you shouldnt end up out of pocket.
              All views posted reflect my personal opinion only and do not constitute professional advice which I am not qualified or knowledgeable enough to provide.

              Comment


                #8
                Originally posted by MSaxp View Post
                Controversial. Also tell them from beforehand that you will be serving a section 21 notice, that you will action at the end of the 12 months, if they dont find a job, or leave. They might be OK with it, or not.
                There is no point issuing a S21 12 months before you intend to use it, it sends all the wrong signals for the tenants to think they already have a 'sword of damocles' hanging over them.
                I offer no guarantee that anything I say is correct. wysiwyg

                Comment


                  #9
                  True. My point was to let them know from before they agree to the tenancy that you intend to end the tenancy at the end of fixed term if they are still unemployed. I think if you are open about it and let them decide if they want to proceed with the tenancy on these terms, it will be much better than just saying no. Dont see what else OP can do. Obviously it would be best if you start a tenancy without such worries
                  All views posted reflect my personal opinion only and do not constitute professional advice which I am not qualified or knowledgeable enough to provide.

                  Comment


                    #10
                    Originally posted by MSaxp View Post
                    True. My point was to let them know from before they agree to the tenancy that you intend to end the tenancy at the end of fixed term if they are still unemployed. I think if you are open about it and let them decide if they want to proceed with the tenancy on these terms, it will be much better than just saying no. Dont see what else OP can do. Obviously it would be best if you start a tenancy without such worries
                    That's where your argument falls down, it's a S21. Adding conditions will void it anyway. You either do or do not end the tenancy with it, or proceed to court or whatever. There is no point at all in issuing it any more than (say) three months before the end of the fixed tenancy, by then you will have a good idea of the tenant's reliability.
                    I offer no guarantee that anything I say is correct. wysiwyg

                    Comment


                      #11
                      Quick update.
                      LA think cannot put through credit check as T have only been in the country a year.
                      Have asked for ref from previous LL and waiting.
                      LA have confirmed full 14 months +1 month deposit will be transferred prior to move.
                      Can you tell me whether this sounds too risky, ( as is any letting situation.
                      As a very casual poll should I walk away?
                      Also should I go ahead should I insist on a 12 month rather than 14 contract.
                      Thanks again for all your opinions.

                      Comment


                        #12
                        I would set up a 12 months AST and take 12 months rent upfront with a 2 months deposit. If they decide to leave within the fixed term you are not obliged to refund the 'unused' rent, make sure they are aware of this. I wouldn't insert any break clause or issue S21 as I think it would be unnecessary at this stage. As jta has pointed out, you could just as easily issue s21 further down the line, I think you are in a pretty strong position.

                        Comment


                          #13
                          It should be noted that, afaik, it is possible to get 14 months paid in advance with a fixed term of less than 14 months.

                          Originally posted by msec View Post
                          If they decide to leave within the fixed term you are not obliged to refund the 'unused' rent, make sure they are aware of this.
                          IMHO, this would depend on the contract and on the terms of the surrender.

                          Comment

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