Buy a property with tenants and agents in place?

by Mick Roberts

8:46 AM, 15th February 2014
About 7 years ago

Buy a property with tenants and agents in place?

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Buy a property with tenants and agents in place?

I own flats, bungalows and houses in Nottingham and specialise in renting to tenants in the benefits sector. It can be very management intensive at times though so I’m looking to go a bit upmarket and buy some posher properties to attract posher tenants for a lower yield and hopefully far less hassle.

I’m just buying a 3 bed semin a decent area off Estate Agent who are also letting agents. Long story, but I have tenants who look for houses for me to buy for them. Saves me a LOT of time and we sometimes get a bargain come up so they are the ones I buy. This one is worth £115k, I’m paying 98k. Should have been 90k, but that’s another long story. Mick Roberts

£137pw was deal I agreed with the tenant who found me the house. However, the letting agent (for vendor) has just signed up a new tenant which will return me a paltry £440pm (£500 to them).

So do I leave things with agent & I not get involved at all?

I’m not bothered about a tenant in place, it’s the ‘agent in place’ I’m bothered about.

Bottom line is that I’ve never used a letting agent in my life! I’ve never even looked into it so I don’t really have a clue what they are responsible for.

This one is a big agent, Your Move, so my worries are not so much about whether they will go bust and do a runner with my rent or the tenants deposit so much as what if they screw up on other things?

Questions then:-

Who is responsible for boiler service etc. if things go wrong?

Do I have to keep a diary for when things need to be done, Gas Checks etc. is that the agents responsibility?

Does buck rest with Landlord if the agent screws up?

It’s a typical house for letting agent , lovely decoration, lovely carpets, crap kitchen, crap boiler, crap bathroom. Sorry to offend some agents here, I mean it in terms of some of my tenants when asking me to do carpets, because their mate is letting from an agent with nice carpets, they don’t see the new £1,400 boiler, the £2,000 kitchen and the £700 bathroom I have in mine.

So with it having a crap boiler, I’d ideally like to have a tenant in there who gets Child Tax Credits, that way I can get a new boiler fitted for free. Or do I leave that for Agents to do, because if the tenant has my number, will she then start bugging me?

I was going to test the water with this one to see if it’s really nice leaving a house with an agent and to see if it’s worth if for the lower income. Will I have a lot more free time?

I’d appreciate your thoughts.

Thanks Mick


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Comments

Steve Gibson

12:13 PM, 4th March 2014
About 7 years ago

Reply to the comment left by "Gary Nock" at "04/03/2014 - 11:10":

Thanks Gary. Is there an art to completing a Section 48? Is there anything in particular I need to be aware of or is this a standard document I can obtain from somewhere?

With regards to the deposits, there are five tenants currently in the house each with individual letting agreements each with separate deposits. Additionally there is one new AST for the whole property with an associated deposit commencing from September 2014. Is the current agent legally able to retain the deposits once their existing relationship is severed with the current landlord? The deposit money actually belongs to the tenants and they will obviously want to see this returned (all being well) at the end of the tenancy. So my concern is if the agent is legally able to retain these how on earth do I return them to the tenants at the end of their tenancy?

I believe either the agent or the landlord is also holding post dated rent cheques covering both of these tenancy periods. If I do proceed is it an easy process for me to recover these from the agent or should I insist upon the outgoing landlord doing this as part of the purchase?

Gary Nock

13:56 PM, 4th March 2014
About 7 years ago

No art to the section 48 mate. I used the NLA template. Not sure if they are allowing none members to use them free now. Just fill it in. No trick questions.

As regards deposits last time I did something like this with new tenancy agreements I re-protected the deposits and reissued prescribed information. But because the existing agent was not playing ball I had to get the tenant to get the deposit back and then pay it to me for me to pay it to the DPS rather than the easier route of just transferring it over. The danger is tenant may not pay it over as they are already in situ.

Gary Nock

13:58 PM, 4th March 2014
About 7 years ago

And do not rely on post dated cheques as a basis of a final balance. They can be cancelled.

Romain Garcin

14:32 PM, 4th March 2014
About 7 years ago

Steve,

As the landlord, you must provide your tenant an address in "an address in England and Wales at which notices (including notices in proceedings) may be served" on you (I'm quoting from the Act). This can be the address of your letting agent, or any other address obviously as long as the mail reaches you.
This is section 48 of the Landlord and Tenant Act 1987.

You just need to write them a letter with that information.

In addition, you must also notify the tenant of the assignment of the landlord's interest to you, along with your name and address (that's your address).
This is section 3 of the Landlord and Tenant Act 1985.
It is an offence (level 4 fine) if you don't comply (and somehow get caught) within 2 months.

You can send a single notice with all the info above.

Steve Gibson

15:08 PM, 4th March 2014
About 7 years ago

Reply to the comment left by "Romain " at "04/03/2014 - 14:32":

Gary/Romain - thanks for your help.It sounds like my best route forward is to get the current landlord to transfer any deposits and rent taken as part of the conveyancing process followed by me issuing the Section 3 & 48 notices to the tenants upon completion.

If you can think of anything else I should take into account it would be gratefully appreciated.

Regards

Steve

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