Keystone Asset Management Ltd – Voluntary Administration

Reply to the comment left by "Neal Craven" at "27/01/2015 - 14:23":

Hi Neil

Yes, several insurers now have it in their T&C's that they will not cover risks associated with cannabis farms (but not all).

Most residential and BTL lenders T&C's strictly prohibited subletting and most landlords insurance T&C's make it clear that subletting voids their cover.

Given that commercial facilities tend to be bespoke (not templated lending contracts) it would be improper for me to make sweeping statements.
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Reply to the comment left by "Robert Mellors" at "27/01/2015 - 10:12":

Hi Robert
I'm struggling to get a Rent to Rent company to move a tenant out of a flat. I bought the property in November (part of a house divided into flats) with the tenant in situ. The letting agent, who set up the original agreement and lets a number of other properties to this company, was not aware that it was a commercial agreement and tried to evict under s21. That was thrown out and we have now served a Notice to Quit expiring on 12 February. However the company say they can find no three bed flats to which they can move the tenant. I have been advised that, when the Notice to Quit takes effect, the agreement with the company ends but a new tenancy will be created with the tenant, if he is still living there. Help! Do you have any knowledge of this, and could you let me know the authority for your remark that the courts have accepted the tenant is in on licence? I'd be really grateful. Thanks.

Reply to the comment left by "Penelope Poore" at "28/01/2015 - 14:16":

Have you got a lease of with the R2R tenant

Reply to the comment left by "Neal Craven" at "28/01/2015 - 14:33":

We have an agreement with the company, which I and the letting agent took to be an AST, although it doesn't mention that term. It was a fixed term lease for a year expiring in February 2014. Since then they have been running on.

Reply to the comment left by "Penelope Poore" at "28/01/2015 - 14:16":

Hi Penelope

The matter of licences is specific to HMOs and between the landlord and the occupant, so it is nothing to do with your situation at all. I very much doubt that the R2R company will have let to the occupants as a licence.

If you have a lease agreement with the R2R company, then it should have an expiry date, after which the R2R company is no longer leasing from you unless you have extended the lease term or have agreed to it's continuation. Thus, the R2R company should return the property to you, presumably with vacant possession, but that depends on the terms of your lease with them. I don't see the point of a 1 year lease to a R2R company, but I guess it made sense to you at the time.

You have mentioned having a letting agent, so if they arranged and set up the lease agreement with the R2R company, and have not done it correctly (e.g. use the wrong legal format), then they have perhaps been negligent and you may have a right to sue them for any losses incurred as a result of their negligence.

Who did the letting agent try to evict with the s21 Notice? The R2R company, or the occupant of the flat?

Whether the R2R company can find somewhere to move the occupant's to is irrelevant, the lease has ended, so (depending on the wording of the lease) the contractual arrangement with the R2R company has ended. If the R2R company has failed to return the flat with vacant possession (if this was stipulated in the lease) then the occupant becomes your tenant so it is now up to you to evict them (or give them a tenancy with yourself as their landlord). The resident should no longer pay the R2R company, but I guess they don't know that. I think you would have grounds for suing the R2R company for recovery of any losses you've incurred as a result of them not giving you vacant possession as per the terms of their lease (assuming this was in the lease terms). If it was not in the lease terms then your letting agent is at fault and can be sued for their negligence.

All of the above general advice is dependent upon the terms and conditions within your lease agreement with the R2R company, and also the T&Cs in your agreement with your letting agent, so without seeing these I cannot really comment other than in very general terms.

Advice to you and anyone else, beware of R2R companies that only want to rent for 12 months (or are even agreeable to this), beware of incompetent letting agents, and make sure that whatever R2R agreement you use it protects both you as the property owner and also the R2 company (e.g. mine have a forfeiture clause to protect the owner if I default, but it also protects me because it prevents the owner from ending the lease early just because they change their mind).

I always use a 5 year lease, because I will be investing money into the property to bring it up to a better standard, and perhaps to convert it into a HMO, and it will take the first year or two to recover my investment, but in years 3 - 5 I should (hopefully) make a profit, and at the end of the 5 years the owner will see that the property has been improved (capital value added) and will be happy to renew the lease for another 5 years.

Getting back to your situation, you need to go and talk to the tenant (occupants) and decide whether you are willing to let to them direct, or whether you wish to evict them, then take action accordingly. As for the R2R company, you need to make it clear to them that they are no longer leasing the property from you as the lease has ended, and they have breached the terms of the lease (e.g. by not returning the flat to you with vacant possession at the end of the lease term). As for your letting agents, sack them immediately and sue them for all your losses. - I guess the barrister on here that does the private prosecutions may be able to assist?

These are my personal opinions, and should not be taken as authoritative legal advice, as I am not a solicitor, just experienced in this type of letting arrangement.

Is an R2R lease protected under the 54 Act, unless contracted out.

Reply to the comment left by "Neal Craven" at "28/01/2015 - 23:23":

Yes it would. However, where the R2R company has entered into such a contract with a landlord who may be considered a consumer (see OFT vs Foxtons) there is an argument that the contract would breach Unfair Terms in Consumer Contract Regulations, especially if the R2R operator cannot prove that he recommended the property owner to seek professional legal advice prior to entering into the contract. So far as I am aware this argument has yet to be tested in a Court of Law.
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Understand

Reply to the comment left by "Penelope Poore" at "28/01/2015 - 14:16":

Penelope
The agents appear to be clueless. I recommend you take proper legal advice. Were you not informed of the arrangements when you bought the flat in November?

You will need to see a copy of the agreement with the occupier. If the agreement is of the whole flat then even if it calls itself a licence it is very likely to be a lease (see the case of Street v Mountford).

Reply to the comment left by "Robert Mellors" at "27/01/2015 - 10:12":

The barrister you are referring to is Mark Smith, see Members section
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