My company is buying 3 HMOs – How do I deal with ASTs and rent increases?

by Readers Question

11:50 AM, 9th March 2017
About 2 years ago

My company is buying 3 HMOs – How do I deal with ASTs and rent increases?

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My company is buying 3 HMOs – How do I deal with ASTs and rent increases?

I would appreciate any sound advice.HMO advice

My company is buying 3 HMO’s, in total 18 rooms/tenants in Crawley.

The current owner has/had given all tenants a 12 month AST, and all have differing dates.(per when issued etc..)

Question

Do I as the new owner (my co actually) need to issue new AST’s or do the old ones just carry on ??? Any advice on what legal steps I need to take??

I also wanted to increase the rents £25 PCM by the way !! Possible??

Appreciate advice from the P118 community

Paul



Comments

Gary Nock

15:17 PM, 9th March 2017
About 2 years ago

Hi Paul

I am not sure how it works with HMOs as it's not something I have done yet...but with normal residential ASTs when a landlord changes then you must serve a Section 48 Notice on the tenant telling them who the new landlord is. Otherwise you cannot legally demand rent. The ASTs carry on and you could serve Section 13 Notices for rent increases giving at least a months notice.

Or - you could issue new ASTs to all the new tenants at the new rent providing they will surrender the old tenancies if they have not expired. But you need as a minimum to serve a Section 48 Notice on the day you complete. Don't ask or rely on your solicitor to do it because they won't.

A section 48 notice is a notice required to be served under s.48 of the Landlord & Tenant Act 1987 on the tenant providing an address at which the tenant may serve notice (including notices in proceedings) on the landlord. This address must be an address in England or Wales.

Philip Savva

6:48 AM, 10th March 2017
About 2 years ago

Hi Paul, it would be in your best interest to issue them all new 6 months ast's & a notice of rent increase, ps don't forget to issue, tenant checklist to each tenant, EPC & Gas cert on the offset & make sure all properties are HMO compliant. Good Luck Philip

Bill O'Dell

11:59 AM, 10th March 2017
About 2 years ago

If your tenants are within the initial term of the AST then you are committed to that term and that rent, unless the AST says differently. So you may have to wait for the expiry of the term at which point it will become a Periodic Tenancy Agreement and you can then amend the terms by increasing the price, or change to a new Tenancy Agreement.
Good advice from Philip above and if you haven't done HMO before, get in touch with your local Environmental Health Office where there will be an HMO Officer. Make sure that you register is needed and that you comply with their requirements and your HMOs are legal.
Lastly meet and engage with your tenants and develop a relationaship with them - they are your customers after all!


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