Can I add my daughter as a landlord to an existing tenancy agreement?

Can I add my daughter as a landlord to an existing tenancy agreement?

11:28 AM, 6th February 2023, About A year ago 12

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Hello, my daughter part owns a rental property with me, but I have always been listed as the landlord on Tenancy agreements (she was a minor when the property was bought)

My daughter wants to buy the property from me and move into it as her main home (she currently rents) and I served the tenant a Section 21 mid January, with a leave date of 31st March 2023. We would like the transfer to go through before the end of the tax year, for obvious reasons, but the tenant is now indicating that they need more time to find another property. If my daughter becomes the legal owner before the tenant moves out, I assume the tenancy agreement will be void. Is there any way I can add my daughter to the existing tenancy agreement (as a landlord) prior to this (currently a periodic tenancy), as she does part own it, thus avoiding a major problem – where there is no tenancy agreement in place? Or, should I just get a new tenancy agreement drawn up as soon as possible, with my daughter named as the landlord, issue all the necessary paperwork and a new Section 21?

Also, my daughter part owns another rental property and we have been told that she will therefore be liable to pay 3% SDLT on her purchase, even though this will be her home and will no longer be rented out. I thought that the extra 3% SDLT did not apply to your main residence

Thank you,

Sally


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Comments

Puzzler

14:26 PM, 6th February 2023, About A year ago

I think there is just a notice to serve saying there is a change of landlord

SDLT - if she already owns a property then yes it is payable, it's CGT that is not payable on your main residence

Rv Suzuki

14:43 PM, 6th February 2023, About A year ago

As long as the tenant agrees issue the new tenancy agreement. You will need legal advice on how you can restrict this to a monthly contract rather than the standard 6 months and transfer the deposit into your daughter's name.

Smartermind

14:58 PM, 6th February 2023, About A year ago

The tenant already has a tenancy agreement and is not obliged to accept a new one. Surely, especially as your daughter is already a part owner, all you need to do is inform the tenants of change of ownership. Your daughter should register the deposit under her name and ensure that the existing documents have been correctly issued.

Graham Bowcock

11:29 AM, 7th February 2023, About A year ago

As Smartermind says, there is a valid tenancy agreement in place and no need for a new one.

If your daughter was part owner then she should have been named as joint landlord on the tenancy. As she isn't, this can be rectified by notice under s48 Landlord and Tenant Act.

The change of ownership does not end the tenancy or change any terms.

As for SDLT there is a flow chart available, but I think your daughter will be due to pay the 3% surcharge as she already owns a property.

Ian Narbeth

11:32 AM, 7th February 2023, About A year ago

Reply to the comment left by Rv Suzuki at 06/02/2023 - 14:43"As long as the tenant agrees issue the new tenancy agreement."
Sorry, that is nonsense. Unless, as is extremely unlikely the tenancy has a restriction the OP is entitled freely to transfer the property from the OP to the OP and the OP's daughter without prior reference to the tenant. Notice can be given afterwards.
The tax issues depend on what percentage share in the property is being gifted to the daughter and whether there is a mortgage. (If there is a mortgage the consent of the lender will be required and a new mortgage deed entered into).

Judith Wordsworth

11:33 AM, 7th February 2023, About A year ago

You have already issued a s21 with you as Landlord on a jointly owned property and personally I would continue with this possession and the process.
What date does the current tenancy end? It will roll on to a monthly periodic tenancy when it ends and you haven't got vacant possession.

The tenant wanting more time will only carry on and on as rental properties, that they might find acceptable and be accepted for, are getting scarcer and rents increasing.

A landlord does not have to be the property owner. The owner of a rental property can be involved in every aspect of the rental process, or can give someone else the power to act in their place. So your daughter, once you transfer your 50% to her, instructs (a letter will do) you to act as the Landlord. And sends a copy to the managing agent, if you are not self managing.

If you wait until the property has formally transferred into your daughter's sole name, and I'm presuming that she doesn't need finance to do this, then her starting a new AST (minimum 6 months) with the tenant (which she doesn't need to do) and then serving another s21 at least 2 months before the end of that term she might be waiting another year to move in!

Sally

16:38 PM, 7th February 2023, About A year ago

Reply to the comment left by Smartermind at 06/02/2023 - 14:58
Hi, Thanks for your comments. The deposit has already been returned, before I issued S21, as gesture of goodwill - so she didn't have to find another deposit for a new property.
Copies of all docs were sent via post before I issued S21 (again by post), as they were originally emailed, but I will make sure my daughter issues everything again when she takes over ownership & ask the tenant to sign for receipt.

Sally

16:44 PM, 7th February 2023, About A year ago

Reply to the comment left by Graham Bowcock at 07/02/2023 - 11:29
Hi, Thank you for clarifying.
My daughter was a minor when the property was first bought, so I was named as the Landlord and have managed it since, so we left it that way. Only wondering about it now, as the tenant is saying she won't be able to leave by the stated date & needs more time. By which time ownership will hopefully have passed to my daughter.
I will look into Section 48.

Sally

16:57 PM, 7th February 2023, About A year ago

Reply to the comment left by Ian Narbeth at 07/02/2023 - 11:32
Hi, I would be gifting 50% to her, but there is no mortgage.

Sally

17:06 PM, 7th February 2023, About A year ago

Reply to the comment left by Judith Wordsworth at 07/02/2023 - 11:33
Hi Judith,
The tenancy has been on place some time and has already rolled over to a monthly periodic tenancy.
A letter from my daughter instructing me to act as landlord would certainly simplify things, as the last thing we want it another 6-12 months before my daughter can move in.

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