Can my tenants renovate the property

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    Can my tenants renovate the property

    Our prospective long term tenants wish to decorate/renovate the house. We have said we are okay with this and we can therefore offer the house at a substantially reduced rent. I have a couple of questions however..

    1. what if the tenants decided to leave after say 3 or 4 years. Could they undo the renovation work or do they have to leave it as it is?

    2. would there be any tax implications such as capital gains if the tenants renovated the home?

    #2
    How long a term are you planning to agree? If it's more than a year, what makes you so sure that these are reliable, trustworthy tenants?

    What do you mean by 'renovate'? What sort of work are we talking about?

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      #3
      We are not really sure how we are to proceed that's why we are looking for some advice. To the best of our belief the potential tenants are sound. We had assumed maybe lease the house on six month terms at low rents and maybe up this to longer terms if the tenants are as good as their word by renovating the house. The renovation so to speak is complete redecoration except bathroom and kitchen, maybe a couple of doors ect. They also seem key to go much further than this including knocking down a small wall at the front of the house for a second vehicle

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        #4
        Are they proposing to DIY all this work?

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          #5
          They are a couple. The man is a builder by trade. Looking on another link someone suggests possibly having the builder invoice me for individual work he does and I in return invoice for the same amount of rent therefore being able to keep the renovated work if or when the tenant leaves.
          My only thing is that the tenant is likely to want to spend a substantial amount of money in the short term

          Comment


            #6
            Keep away from these tenants.

            Your house, THEY do not alter anything, and DEFINITLEY DO NOT knock down any walls.

            So they paint everywhere pink, do a nasty D.I.Y. job,
            If you say o.k to go ahead, they don't have to undo anything ( provided it's
            done profesionaly, to agreed building standards.)

            They take the house as is, and at the rent asked for.
            If they want to knock a wall down, and put it back up when they leave
            ( which they wont ) then they finance the job, and the work they do
            becomes yours.

            Don't agree to anything, as they may well disapear after a year or two, having
            got cheap rent, ruined the garden with another car, etc etc.

            Find someone else.

            R.a.M.

            Comment


              #7
              They have been living long term in another house whereby they have done some neat work. It is not our intention to allow them to knock down walls other than the driveway which is a ruin as it is.
              The house is presently in urgent need of a full decoration at the very least. Even if the house was painted pink this would be better than it's present state.
              So from what you are saying is that if they work on the house their work remains ours? Or putting it another way can we do six month short term leases and do an inventory on any work they have done so far. The key for us is that they do not get a cheap rent and later decide to undo all their work should they decide to leave later.

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                #8
                I'm with RAM. Don't let tenants do any work to your house. It is hard enough employing builders anyway without letting them chose how to do the work. See my thread:

                http://www.landlordzone.co.uk/forums...such-swindlers

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                  #9
                  Thanks guys. I accept all this as risk however it is not an intention to offer any tenant any money or a license to know down any part of the building. The problem we have is that we have no capital or time due to distance to renovate the house ourselves. Of course we will vet anyone thoroughly. The question remains will any work they do become ours to keep if we so wish? Do we cover this by signing off their work and making sure it is part of the inventory on the renewal of the lease?

                  Comment


                    #10
                    So they do some work, it turns out to be cr*p, they've spent £3.4k of their own money .... now what do you do....

                    In your shoes I'd permit one (one: repeat, 1..) small room to be decorated at tenant's cost & risk: You choose/approve colours.... If that's OK then maybe think about some more..

                    That you don't have ££££ or time does suggest perhaps you are in the wrong business.... (btw I am 1000+ mile round-trip from 3 self managed properties... but I do have v reliable local builder/sparks...)

                    All tenants are (& will tell you they are...) prospective long-term btw... Only time tells of they stay or not....

                    Cheers!
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Out of curiosity, what are you worried they might do? You say yourself that efefctively you are accepting the risk that the house cant get any worse, so any damage they cause, you dont mind. How will they undo the renovation? Unplaster walls and unpaint rooms? Do you have something specific in mind?

                      In case what you are thinking is to give them a rent discount for the work they put in, how will you spec out what 'renovation' entails? What if their renovation isnt what you have in mind? Will you still be happy to offer the same discount? And what if by the time they move out, the house needs another paint? Is it their fault?

                      I am somewhat puzzled as to why a tenant would agree to this given you are offering no rent or tenancy guarantees. Would they do a good job renovating the place and then get evicted in 6 months time? Doesnt make much sense.

                      Another thing to keep in mind. Depending on how bad a state the property is in. If the tenants move in and never pay rent, you'd have a hard time evicting if they start claiming disrepair issues.
                      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


                        #12
                        Originally posted by lobby View Post
                        They have been living long term in another house whereby they have done some neat work. It is not our intention to allow them to knock down walls other than the driveway which is a ruin as it is.
                        The house is presently in urgent need of a full decoration at the very least. Even if the house was painted pink this would be better than it's present state.
                        So from what you are saying is that if they work on the house their work remains ours? Or putting it another way can we do six month short term leases and do an inventory on any work they have done so far. The key for us is that they do not get a cheap rent and later decide to undo all their work should they decide to leave later.
                        Any work they do becomes yours no question. It becomes 'annexed to the land' and forms part of your title - although this might not include small things like curtains, lights etc - but even they did take those you could easily replace them.

                        I'm not so cautious as the other posters, you seem to be painting a picture of a house that really isn't in the best condition for living in anyway.

                        You need to satisfy yourself that the builder would do a good job like you would with any builder, you also need to talk to their previous landlord.

                        If it is as bad as you say, then the rent should be lower anyway, and you don't have too much to lose. Use a standard AST that requires consent for any alterations. Make it clear that you will need to give consent for each different type of renovation and require a fair amount of detail before consent in writing. You then give consent in writing, ensuring that you give conditions, like no structural work is to be undertaken and you will not compensate the T for any improvements of moving out. Inspect each bit of work as he completes, don't give any more consents if he's not up to standard.

                        I would be careful about the front wall though, check with the council to ensure planing or highways consent is not required, there is a long running saga here over just such a wall.

                        Again, this is only worth the risk if your property really is that bad and you have some reassurance from background checks.

                        One thing worth noting though is you can't contract out your obligation to repair, so make sure he doesn't install anything that could cost you a lot in the future to repair, maintain or replace.
                        caveat emptor
                        If it sounds like I know what I am talking about........I don't.

                        Comment


                          #13
                          Thanks. It's not a business it's just a case that we don't want to sell the house but also that we don't want to pay council tax and insurances for an empty property. We just need to know the house is lived in and fit for purpose.

                          Originally posted by theartfullodger View Post
                          So they do some work, it turns out to be cr*p, they've spent £3.4k of their own money .... now what do you do....

                          In your shoes I'd permit one (one: repeat, 1..) small room to be decorated at tenant's cost & risk: You choose/approve colours.... If that's OK then maybe think about some more..

                          That you don't have ££££ or time does suggest perhaps you are in the wrong business.... (btw I am 1000+ mile round-trip from 3 self managed properties... but I do have v reliable local builder/sparks...)

                          All tenants are (& will tell you they are...) prospective long-term btw... Only time tells of they stay or not....

                          Cheers!

                          Comment


                            #14
                            Originally posted by lobby View Post
                            Thanks. It's not a business it's just a case that we don't want to sell the house but also that we don't want to pay council tax and insurances for an empty property.
                            NO: NO!!!! Letting is a business, if you treat it otherwise or do not understand it is a business tears will follow: Promise (almost always...)

                            We just need to know the house is lived in and fit for purpose.
                            If it is not already fit for purpose you are laying yourselves open to big problems should ANYONE occupy it.. Get it fixed up so a HHSRS survey by EHO won't end up with any enforcement order (if you don't understand "HHSRS", "EHO" or "enforcement order" you seriously need education..>) then rent it. Any other way leads to danger (tenant suing you, council suing you, unfortunate reporting in local papers....)..

                            Cheers!!
                            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                            Comment


                              #15
                              Originally posted by lobby View Post
                              To the best of our belief the potential tenants are sound.
                              If this is your first ever let, then you are a tenant scammer's dream victim. Have you carried out thorough credit/reference checks?

                              Example scenario: They take the property at a 'substantially reduced rent'. Nothing else is signed. They don't do any of the work. They ask the Environmental Health Officer at the local council to inspect. He orders you to make substantial repairs or even improvements. You won't have a leg to stand on. You'll have to comply with the order and pay for the works, and you'll be receiving a 'substantially reduced rent' to boot.

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