Who is the landlord and who attends court?

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    Who is the landlord and who attends court?

    I've let one of my houses to a company that turns them into HMOs and lets them out as rooms. They pay me the market rent for the property as a whole and then whatever they make on top by letting as rooms they keep.

    The agreement that I have with them states that they are my tenants, but the agreement that they have with their tenants state that they are the landlord. Now I can see how this *could* be correct, but is it?

    They need to evict one of their tenants in the house and have told me that they will attend court as the landlord. Is this the legally correct thing for them to do?

    Also I have some reservations about their business set up that have only just occurred to me. This is my take on it and I would appreciate it if someone would confirm if I'm right or not: If they are 'landlords' and not 'agents' then the rental income that goes to them is theirs and not their customers (as it would be if they were a letting agent passing on rent minus commission). So given that they told me that they have lots of houses like mine taking in thousands of pounds a month they must be liable for VAT on this income. Is this right?

    I put this scenario to them and they told me that they 'avoid' VAT by having 2 companies - one to process the rent and one to do everything else. They wouldn't give me any more details that this, but I cannot see how this would make even the slightest difference??? However I'm no accountant so if anyone of you can enlighten me I would be your humble servant forever etc...

    #2
    They would be the ones that attend court, as they are the landlord of the defendant.

    You are the "superior landlord".
    Allow tenants to protect their own deposits. I want free money when they do it wrong

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      #3
      Thanks. Any thoughts on their business setup?

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        #4
        I wouldn't do business with them. Give YOUR tenant (company) notice (nb not AST so s8 & s21 not relevant). Perhaps HMRC would like to hear of their setup (Google HMRC fraud line)
        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...

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          #5
          There's no VAT on rent, btw.

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            #6
            Originally posted by jjlandlord View Post
            There's no VAT on rent, btw.
            I think this needs to be thought through because the agents who are OP's tenants are not living in the property and are in effect paying a monthly sum for the right to sub-let it to other tenants. They are a business set up purely to acquire property in order to let out. I wonder if the HMRC have a view on this?

            I would also be concerned about the common law tenancy that OP has entered into as repossession rights are somehwat limited if no exemption has been obtained concerning the Landlord & Tenant Act 1954.

            I would suggest any landlord thinking of entering into a "guaranteed rent" arrangement to take legal advice first and to have a solicitor check over the agreement.
            The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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              #7
              They rent from OP and pay him rent. Then they sublet, thereby collecting rent. No VAT involved.

              They are not OP's agents at all.

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