All-inclusive rents and tenant exceeding thresholds

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    All-inclusive rents and tenant exceeding thresholds

    Hello,

    I am a relatively new landlord and also relatively inexperienced. I took on a tenant in August, who has generally been very good. He asked for a way of paying rent whereby he wouldn't have to bother about bills, council tax, etc - as he didn't want the hassle of managing them.

    I offered an all-inclusive rent deal (working out usage amounts per year), and constructed the following 'clause' in an AST template I got from a friend to include this, mentioning the following:

    "To pay additional rent above that stated in Clause 2.1 [which is the combined rent value] if the services that the tenant uses exceed average usage thresholds set by the landlord. The landlord will inform the tenant in writing that the rental amount will increase to match tenant usage of services, until such time that tenant usage of services falls back between average thresholds set."

    I have since learned and understood that this is an unfair clause to put in an AST. I have also calculated that the tenant is consuming the utilities at about £25 a month extra than I am charging in rent.

    However, since the clause is unenforceable, I am not able to increase the rent (at least until the renewal date of the AST, giving 2 months notice in advance). Is this assertion correct, or can I reclaim any of these losses? I have lost about 7 months worth ~ £175 on utilities from wrongly setting my rental amount.

    Many thanks for any help or advice you can provide.
    Kind Regards,
    ___________________________
    AG landlord newbie

    #2
    This is the problem with all inclusive rents. You cannot control what they do with heating/lighting. What if it is an excessively cold winter? You can't expect them to sit around freezing just in case they go above the threshold.

    You will just have to swallow that loss and set rents accordingly or don't have all inclusive rents.

    Comment


      #3
      The council tax, water bills are a set price so i dont see a problem including them in the rent just dont agree to including gas or electric (get key meter for electric and they wont get a big bill) dont know if you can get one for gas tho.

      Comment


        #4
        Originally posted by AtullGupta View Post
        Hello,

        I am a relatively new landlord and also relatively inexperienced. I took on a tenant in August, who has generally been very good. He asked for a way of paying rent whereby he wouldn't have to bother about bills, council tax, etc - as he didn't want the hassle of managing them.

        I offered an all-inclusive rent deal (working out usage amounts per year), and constructed the following 'clause' in an AST template I got from a friend to include this, mentioning the following:

        "To pay additional rent above that stated in Clause 2.1 [which is the combined rent value] if the services that the tenant uses exceed average usage thresholds set by the landlord. The landlord will inform the tenant in writing that the rental amount will increase to match tenant usage of services, until such time that tenant usage of services falls back between average thresholds set."

        I have since learned and understood that this is an unfair clause to put in an AST. I have also calculated that the tenant is consuming the utilities at about £25 a month extra than I am charging in rent.

        However, since the clause is unenforceable, I am not able to increase the rent (at least until the renewal date of the AST, giving 2 months notice in advance). Is this assertion correct, or can I reclaim any of these losses? I have lost about 7 months worth ~ £175 on utilities from wrongly setting my rental amount.

        Many thanks for any help or advice you can provide.
        Do not be misled. Any clause is enforceable so far as instituting proceedings. In certain cases, a term might (not "will") be held by the Court to be "unfair", and the Court would then prohibit enforcement- until then, enforce!
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #5
          Thanks for the responses

          Thanks everyone for these helpful responses. I think that I will have to swallow the costs this time around; but I am tempted to use the clauses provided by Wickerman for the renewed AST if that's ok, setting a threshold figure in the contract after which the tenant pays.

          The tenant is a good tenant; and generally I get on well with him. I am keen on keeping him as he takes good care of the place, pays early and without dispute.

          It was really in this case that he told me it was not enforceable. We have come to an amicable arrangement though, whereby he's agreed to take measures to limit usage of the utilities and part-pay for any excess usage.
          Kind Regards,
          ___________________________
          AG landlord newbie

          Comment

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