Am I responsible for the tenant’s utility bills?

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    Am I responsible for the tenant’s utility bills?

    Hello everyone,
    I came across this forum as I was searching for an answer about possible unpaid utility bills. A brief read of some threads made me feel the four horsemen of the apocalypse would be soon bearing down on me!
    Story is this. I am about to purchase the freehold of a shop to set up a business with my son. There is a small flat with separate access at the back as part of the purchase. It has a tenant on a periodic tenancy ( I have a copy of the expired AST). This has been advised by my solicitor handling the purchase.
    On visiting the existing tenants of the shop yesterday to sort of dilapidations, they advised that the flat tenant had not been paying utilty bills and bailiffs had been round several times but could not cut him off as the meter is actually in the shop. Apparently he does not pick up his mail.
    I have briefly looked in the flat twice during the purchase process and found I to be very messy and dirty ( bikes in the room etc). Both in breach of the agreement.
    As the flat was not my priority I had not given it much thought until yesterdays conversation
    The vendors were a bit circumspect in their earlier answers but insisted he always paid the rent
    My question was this; am I responsible for unpaid bills going forward ( again the tenants responsibility under the agreement)? I presume I am not for anything prior to my ownership.
    In light of the wider issue raised I am now wondering how to play this guy. I purchase next week and had a letter drafted to give him our new details and bank ac to change his DD and saying I was coming in to inspect.
    He may be ok but I do not want the hassle of a problem case and would prefer on balance to have a quieter life and get him out; spruce it up a bit and relet to someone I know.
    How can I ensure I know bills are being paid.
    I am not dependent on the rent for anything and am not too concerned about a few warning shots if there is any confrontation but would prefer to do it nicely. That said he may be ok and some people do live in mess. It was so messy I could not see what state my fixtures were in.
    To cover all my bases how could I proceed by way of initial contacts?
    Also; if bailiffs turn up again; I presume I can turn the electric off from downstairs?
    Sorry to go but I have never been a landlord before; doesn't seem much fun at first sight!
    Any thoughts appreciated

    John

    #2
    The expired AST is all very well but may be invalid: What matters is when did the tenant 1st move in: Do not trust vendor, their solicitor, estate agent .. either get them to give you cast iron, documented-&-will-stand-up-in-court evidence of someone else having the tenancy (& utility bills & council tax..) some date prior of ask tenant himself.

    Until you know you can't work out what it's worth (tenant could be a regulated, "rent act" tenant who is impossible to evict..)

    Who's name is on utility & council-tax bills??

    Turning off utilities is harassment & can get you a **free** holiday in Brixton clink...


    Vendors being a bit circumspect would make me consider saying goodbye guys...

    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


      #3
      Are you saying that the flat has separate utility supplies & meters (i.e. real ones, not landlord ones) or has the current shop owner being onwards billing the messy guy? Does the flat have a separate address at the council for council tax? Do the unpaid bills match this address?

      If it has separate supplies and the AST you have been given is valid then the debts are the tenants, not yours.

      You should also ask your solicitor to ensure from the seller that "the flat" has the correct planning and building regs approvals in place to be a flat if he hasn't already.


      Re the existing tenant, be very aware that you will "step into the shoes of" the outgoing landlord and take on any liabilities he might have built up with the tenancy. Your solicitor should have told you this. Was a deposit taken and therefore still "active"? If so, what is planned to happen to this money at completion? Was it protected properly and was PI served at each tenancy and each time a tenancy went periodic? Do you have documents that prove this (and therefore protect you from the tenant claiming off you? Was an inventory taken and signed by the tenant? Without this you can forget making any deductions for damage or cleaning and need to budget for full return of the deposit when they leave.

      I would also demand to see bank statement evidence from the seller that the tenant has been paying his rent.....and pay to have him referenced as if I was choosing to take him on as a new tenant (because you are).

      Make all the above a condition of the sale.

      At the human level, I would go and knock on his door ASAP and explain that you are thinking of buying the shop, know that he "comes with it" and ask if you can have a chat. He might well tell you that he has been trying to get serious repairs done for years and been fobbed off by the current landlord....have a mental list of thinks to drop into the conversation and see if his answers line up with the sellers'. If he won't speak to you then, in conjunction with "unpaid bills" and "doesn't read his post" expect the future with him to be painful and costly.

      Comment


        #4
        Note that the utility companies can cut off his supplies for non-payment (but the water company cannot).

        You, however, can't without risking prosecution.

        Comment


          #5
          Thanks Guys,
          The flat has separate access. It is above the shop and accessed by stairs outside the back of the shop. The meters are separate it is just the one supplying electric to the flat is in the shop.
          The shop is the priority for reasons I wont bore you with and the flat was a "nice to have" ie a bit of rent as I wont be charging my son rent on the shop.
          Shame is this is all hearsay to a degree although the flat was very messy when I went in
          I am on the verge of buying and will in any event as the shop is important.
          It would have been ok if the guy in the flat just paid rent and gave no trouble which is what the sellers /agents claim. I know they could lie ( and I am just off to have a final chat with them about this). It is really tactics. This forum seems to suggest on balance that I am ok on utility bills but I will ring some numbers and my lawyers who I use quite a lot for other matters both business and domestic seem quite sanguine. So do I just listen to hearsay and serve him notice from day one ( possibly saying I need it for myself); put the rent up and hope he leaves ( what notice do I need to do this?); or tell him he is in breach of this that and the other and serve notice. As you say I could just have a chat but do I wrongfoot myself if I want to get him out by not acting quickly.
          It is a pity as I would prefer a quiet life and wouldn't mind a bit of mess but I do not want bailiffs chasing him all the time. Bad for business and I am not the patient type.
          As I say I have never been a landlord; always built houses but wouldn't rent them as I thought it was too much hassle. Seems I might be right.
          So; on the basis I am going to buy anyway how would you play it?

          Comment


            #6
            Sigh! I repeat...
            Originally posted by theartfullodger View Post
            ....What matters is when did the tenant 1st move in: Do not trust vendor, their solicitor, estate agent .. either get them to give you cast iron, documented-&-will-stand-up-in-court evidence of someone else having the tenancy (& utility bills & council tax..) some date prior of ask tenant himself.

            Until you know you can't work out what it's worth (tenant could be a regulated, "rent act" tenant who is impossible to evict..)

            ....

            .../
            However if you are happy to go ahead & find you have a "Rent Act" tenant who is impossible to evict, can pass tenancy on to someone else on their death & who's rents are controlled.. please go ahead...

            Not charging son rent on shop?? No offence but IMHO never rent to relatives or friends: Rent to ANYONE else, and if necessary support (£xx/month) relo renting somewhere else from someone else...

            IMHO, only ever rent (or provide property for free) to anyone if you are prepared to evict them, in full glare of court & local paper reporting details: Otherwise, walk away..

            But, your money, your life, your relationships....

            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

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