Legal Eagle required for council approved rent to rent contract?
I am looking for a solicitor well versed in looking at commercial contracts with a property owner and a rent to rent company.
Due to Selective Licensing (SL) occupancy restrictions, I am finding it increasingly difficult to find tenants required (one family-sized unit) for a large property that has recently been fully renovated.
The council has direct long-standing contracts with 6 organisations that they use to supply them with temp accommodation and they are in need of large houses. The tenants are on licence with the council and are placed in the property, run by the organisation – which has a direct contract with the property owner. One has made me an offer and sent through a draft contract.
I know the downsides, but the property could be similarly not very well looked after by a tenant I have a direct AST with and then I have the issue of getting them out myself. In this case it means I can be hands-off, and avoid having to get a SL, there are no voids and because it is a big property the reality is the first family that goes in will inevitably stay as the council has no bigger properties to move them into.
Contracts offered by the companies are from 3 – 6 years. Tempted to go for the three years and see how it goes. Rents are fixed over the term so after 3 years the LHA will inevitably have to increase so my thinking is I can then enter another agreement after a rent increase is applied.
I just need a good solicitor to look through the contract and advise accordingly.
Anyone have any recommendations or advice?
Many thanks
DSR
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Member Since September 2018 - Comments: 111
4:14 PM, 22nd May 2024, About 2 years ago
There are plenty of commercial solicitors who can look at this for you. My advise is to not skimp on this and make sure you get a real commercial property solicitor on this as it will cost you much more in the future. As a matter of fact we have recently been offered a rent to rent contract and it was so biased to the company who would house people on the councils behalf our solicitors advised against it. We did offer a 5 year FRI commercial lease but to no ones surprise they refused and said it was their contract or an empty house.
Member Since June 2019 - Comments: 782
4:30 PM, 22nd May 2024, About 2 years ago
I am not surprised about that refusal – they are very keen on repairs and maintenance when someone else is picking up the bill!
Member Since February 2021 - Comments: 106
9:31 AM, 23rd May 2024, About 2 years ago
I’d never ever have anything to do with councils
Simple
You’ll get shafted
Member Since December 2023 - Comments: 26
9:39 AM, 23rd May 2024, About 2 years ago
have nothing to do with councils – it took me 2 years to get the tenants out – the council did nothing but help the tenants – i had to pay for eviction and months of hassle. the council have all the solicitors at their disposal and you have not
Member Since May 2015 - Comments: 2204 - Articles: 2
9:48 AM, 23rd May 2024, About 2 years ago
Reply to the comment left by SteveFowkes at 23/05/2024 – 09:31
Could not agree more; been there, done that and got the “Been Shafted” T shirt. Never again.
Member Since October 2020 - Comments: 199
4:00 PM, 23rd May 2024, About 2 years ago
If you are not prepared for the hassle of a simple Selective Licence, you are certainly not prepared for the hassle you can expect with the complications implicit with this scenario.
Just pay a reputable well-established Local managing agent to do the Selective Licencing paperwork for you and generally manage the property if you don’t fancy doing it yourself. That will be way less hassle and far lower risk for you in the longer run.