Rent to Rent lease termination?

Rent to Rent lease termination?

13:47 PM, 3rd June 2020, About 4 years ago 6

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I signed a 5 year rent to Rent lease for a large property consisting of several flats. I decided to terminate the rent to Rent agreement and gave one years notice, even though the contract was silent on termination, to expire on the contract end date.

The sub-landlord failed to serve notice on time for one tenant, and granted a new tenancy for another tenant to expire after the contact end date. I have agreed terms with a new sub-landlord at a much higher rate, But can’t let 2 flats as they are still occupied.

Until the old tenants go, what rent can I charge the sub-landlord (Rent to Rent landlord). I would argue the new rent is at market rates, and therefore the old landlord should pay this. He wants to pay old rent which was massively discounted, and agreed 7 years ago at a fixed rate for the term.

This is looking like it will go to court, I think market rates as proven by new landlord is fair, but is there anything in law to back this or goes against this?

Many thanks


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11:28 AM, 4th June 2020, About 4 years ago

As this is a commercial lease (rent to rent), I wonder if the Landlord and Tenant Act 1954 would apply? Under this legislation tenants of premises let for business purposes have the right to negotiate a new lease when the old one expires.

Giles Peaker

21:23 PM, 5th June 2020, About 4 years ago

You have some serious problems, I'm afraid, and I would strongly recommend you seek legal advice. It is entirely possible that the two remaining sub-tenants are now your direct tenants. But so much will depend on what you actually signed up to.

I am also somewhat surprised that having been let down with one rent 2 rent set up, you would sign up with another.


15:26 PM, 6th June 2020, About 4 years ago

Reply to the comment left by Giles Peaker at 05/06/2020 - 21:23Thank you for your comments; The lease is actually a 'Short Life Project (Whole Property) Lease' But I used 'Rent to Rent' in the title as the term is more widely known and might get more traction. I wonder if this type of lease is indicative of anything? I've looked this up but can't find anything.
The lease is almost silent on expiry, but does comment "At the determination of the Term (howsoever the same may be determined) the Tenant shall quietly yield up the Demised Premises............."
Otherwise, the lease is completely silent.
As the lease is silent on expiry, what is the default position with sub tenants?

Giles Peaker

22:04 PM, 6th June 2020, About 4 years ago

Reply to the comment left by michaelwgroves at 06/06/2020 - 15:26
It doesn’t matter what it is called. It only matters what it is in law, which is a contractual tenancy with permission to sub let. So, a rent to rent set up.

Again, you need skilled legal advice. This is potentially a huge mess.

Ian Narbeth

10:03 AM, 8th June 2020, About 4 years ago

From what I can see R2R contracts are fraught with danger for the property owner. There are a few sub-landlords who (a) know what they are doing (b) have the resources to deal with unexpected problems and (c) are conscientious. I know some of them but they are rare.

I get letters from would-be R2R merchants every month. It is clear that many have been on the same course as the letters follow a template. The total aggregate assets on the balance sheets of all of them is a few pounds. If you are foolish enough to contract with a shell company who "guarantee" to pay you tens of thousands of pounds and to manage the property, do not be surprised if you are left in the lurch. When things go wrong the R2R company goes into liquidation (probably owing money) and the property owner is left to pick up the pieces.

As Giles Peaker says you need skilled legal advice. As well as the problems with getting possession, you should ensure the property is compliant in terms of licensing, tenant paperwork (deposit protection, right to rent checks etc), gas and electrical safety etc., etc. If not you could find that the Council and/or the tenants come after you.


9:05 AM, 13th June 2020, About 4 years ago

Thanks for your comments.

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