Holiday let to be taken over by golf club?

Holiday let to be taken over by golf club?

9:43 AM, 27th July 2022, About 2 months ago 11

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Hello fellow hard-working property providers, We have a holiday let (5 bed 2 bathrooms) next door to where we live. Currently on Airbnb and doing well. Purchased by us (not in a company structure).

We’ve been offered the opportunity to have the (reputable) golf club across the road ‘manage it’ (still early talks but effectively sub-let it I’m guessing would be the best way to go). They want it for tournaments, wedding guests etc… handy for golfing holidays…

I, therefore, imagine from an insurance point of view that it would be us/holiday let seen as a business renting to another business. Are there any pitfalls ref insurance we should look out for? Any brokers who deal with this kind of thing?

Contract-wise, any good templates…. And is it a good idea? At the moment we can offset our mortgage payments using the holiday let tax relief structure… would that change?

We have managed long-term lets for years but this is a new one for me and I fear I may be missing something obvious…

By the way, is there a contract that allows us to use the property for a handful of days a year? And any clauses re noise/disturbance you know are robust. As you can see I’m all at sea….






12:06 PM, 27th July 2022, About 2 months ago

You don't say how long the golf course would want to take the property - is it seasonal, annual or longer?

I know how much extra work SA/FHL requires - bookings, cleaning, guest communication, etc, so I'm guessing you are considering giving up some profit to lose the admin.

I would suggest a full repairing lease - internal and grounds at a minimum.
Make a list of all the things you require - max occupancy, noise, usage, repairs, etc before you start.
If you are providing it furnished, then a professional inventory is essential.
If you require some personal use this is often accommodated, either by lower rent and a defined number of nights in a period or a defined rate for each season, subject to black out periods or booking a number of weeks in advance.

Tax advisor will confirm whether you are at risk of losing FHL full interest offset and will return to S24. The fact that is already FHL might help if you want to move it to company, as would moving to rates and getting use class changed from C3 to sui generis (subject to lender and insurer)

Tessa Shepperson at Landlord Law has a R2R template
Alan Boswell should be able to sort out your insurance (iHowz members get a discount)

Graham Bowcock View Profile

15:54 PM, 27th July 2022, About 2 months ago

I agree with Rod.

Get a tax advsier to deal with the specifics of your tax situation.

I personally would never use a template lease for somehting like this. You will need the golf club well and truly tied up with their commitment to you so need a good solicitor to draft the lease.


19:37 PM, 27th July 2022, About 2 months ago

Rod and Graham
Your advice is fantastic. Thank you. Rod I’m guessing we’d opt for a year long agreement in the first instance and designate the property/garden minus land to the sides that we intend to use ourselves (I have planning to develop the garage for example into a 2-bed annex and build a large shed on the other side under permitted development rights) - it’s an acre plus plot so a big garden. If that were the case, there would be no need for us to use the house ourselves as I’d be busy overseeing the side projects.

And Rod you’re right, I’d welcome being free of the holiday let admin/cleans etc!

A thought: It may be that lets on less than a 6 month basis with the option to roll would uphold our holiday let off set tax benefit?

Reading what you both say does make us think we need a solicitor who has a handle on this type of thing. Any names or suggestions most welcome…


19:47 PM, 27th July 2022, About 2 months ago

Forgot to say - the golf club is thinking of putting it on Airbnb in the first instance and manage it themselves. Long term they’re likely to build a hotel on the course but our house is a good trial (I am guessing here) for a year or two to see how the accommodation aspect gels with their expansion plans. Our house would not have a change of status in terms of planning/rates etc I would imagine.


20:14 PM, 27th July 2022, About 2 months ago

Reply to the comment left by Maz at 27/07/2022 - 19:37
Maz, no suggestions on solicitor other than to draft a heads of terms and possibly ask Tessa if she can point you at someone.

Don't forget about remedies for non-performance, including ending the contract and recovery of damage/repair costs.

On the tax front, the parameters are 105 qualifying days (stays of less than 30 nights and available for 210 days (no idea why Revenue don't say nights). Possible use of averaging - see HMRC rules


8:34 AM, 28th July 2022, About 2 months ago

Reply to the comment left by Rod at 27/07/2022 - 20:14
Thanks Rod really helpful

Freda Blogs

9:52 AM, 28th July 2022, About 2 months ago

As the golf club are initiating the deal, it’s obviously in their interest, so get them to pay your legal costs, which won’t be cheap, and ensure that you specify these to be paid ‘whether or not the proposal proceeds to completion’, to cover you on costs expended before /if they pull the plug and leave you with an expensive bill to pay.


19:57 PM, 29th July 2022, About 2 months ago

Reply to the comment left by Freda Blogs at 28/07/2022 - 09:52
Good point, will do!


11:31 AM, 31st July 2022, About 2 months ago

This would be a rent to rent deal and not one I would recommend. Google rent to rent to understand some of the problems that arise. I think it would also take you out of the holiday let tax regime, but you'd need to check that with a tax specialist.
I would instead offer the golf club a deal where I paid them a commission for every successful referral to my holiday let business.

Graham Bowcock View Profile

8:41 AM, 1st August 2022, About 2 months ago

I wouldn't be too dismissive of this deal. Rent to Rent has a bad press because the business model is (in my view) flawed - it just cannot work out financially.

However, this is a lease to a known entity (subject to due diligence checks) and if done correctly is less likely to fail than a regular R2R deal. In essence it's just a business lease to the local golf club. They presumably aren't going to be dependent on the letting income to fund the rent, so it's better than R2R in that sense.

If I were to OP I'd carry on, make sure they're good for the money, agree robust HoT and get a proper commercial lease prepared.

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