Robert Mellors

Registered with Property118.com
Saturday 26th October 2013


Latest Comments

Total Number of Property118 Comments: 1038

Robert Mellors

16:46 PM, 9th January 2020
About 2 weeks ago

R2R challenges?

Reply to the comment left by Richard Peeters at 09/01/2020 - 16:36
Hi Richard

Are you the property owner wanting to lease to a R2R company? or
Are you a R2R company wanting to lease from a landlord?

If you are the property owner, then the R2R company would usually offer to lease from you and would provide the R2R agreement, which you then get checked by your solicitor and make sure you are happy with it.... Read More

Robert Mellors

12:17 PM, 9th January 2020
About 2 weeks ago

R2R exit strategies?

Hi Elliot

There are loads of grey areas which the "get rich quick with R2R" type "gurus" fail to address, which can leave the R2R operator severely out of pocket, or having to breach their agreements with the property owners. The issue about AST end dates is just one of the pitfalls.

I operate R2R, however, I do this on a not-for-profit basis and provide lots of support services into the properties and to the residents (homeless people), so not only do we use daily licence agreements rather than ASTs, but we can also include the void costs within our operating costs (and our true operating costs are what determines the amount of rent charged). This allows us to account for void periods (and other costs) leading up to the handing back of properties upon lease expiry, within our rent setting process (though most landlords ask to renew the leases for a further 6 year lease period).

Without the method we've developed, I struggle to see how private (for profit) R2R operators can adequately cover their risks. All great for the R2R operator and property owner while everything goes smoothly, but what happens when they get a bad tenant that fails to pay the rent, trashes the property, or drives other tenants out?

In answer to the specific question about ending the lease period, somewhere in the R2R operator's figures they will have to account for the cost of void periods leading up to the handing back of the property with vacant possession (plus costs of evictions and repairs etc).... Read More

Robert Mellors

22:40 PM, 7th January 2020
About 2 weeks ago

R2R challenges?

Hi Richard
In my opinion:
1. The owner landlord should own the property mortgage free, or have obtained the appropriate consent from the lender.
2. The owner landlord should have obtained the correct insurance for the type of lease arrangement they are entering into. This is likely to cost more than a conventional BTL insurance policy.
3. I think that the "R2R agreement" would normally? be a lease, whereby the R2R company becomes the leaseholder tenant of the freehold owner landlord. This is what I use for my R2R lease agreements, and within that the owner landlord has to sign to confirm that he has obtained all necessary legal consents, and has appropriate comprehensive insurance. - I am aware that some R2R operators claim to have a type of management arrangement with the owner, rather than a lease, but as this is not what I do, I cannot comment on the legality or status of such arrangements.
4. I believe that the "owner" is the property owner (head landlord), however, the R2R company could be the legal entity that receives the rent so could be held responsible for some aspects (as could the directors of the R2R company), BUT the property owner could also be held responsible for some actions or aspects of the tenancy and sub-tenancies.
As to whether the R2R company is an agent or a tenant, this may perhaps depend on the specific agreements in place (as per the answer to Q.3.)
There are lots of variables within the R2R sector, so my comments are perhaps not much use to you, but they hopefully give you an indication of some of the possible issues that could arise.... Read More

Robert Mellors

19:25 PM, 3rd January 2020
About 3 weeks ago

Universal Credit and possible tenancy questions?

Reply to the comment left by Marie at 03/01/2020 - 19:08
Unfortunately any mention of Shelter is going to upset some landlords, as Shelter do so much harm to good landlords by helping bad tenants to stay in the landlords properties. However, if all Rose Arnall would be doing is resolving Universal Credit issues and advising the tenant to pay their rent, then this is good for both the tenant, and the landlord. However, Shelter's campaign of lies and propaganda against private landlords has caused such a rift that now very few private landlords trust Shelter or anyone employed by them (or contracted by them). - This is no reflection on Rose Arnall herself, or the service she provides, it is just an indication of the ill-feeling and mistrust that Shelter have created among private landlords generally.

In view of the above, why would any landlord want to use the services of a solicitor employed by (the mistrusted) Shelter, when they could perhaps get expert assistance from Caridon Housing Solutions or Bill Irving at UC Advice?... Read More

Robert Mellors

14:26 PM, 1st January 2020
About 3 weeks ago

New Tenant Fees laws = new problems for landlords?

Reply to the comment left by Ian Narbeth at 01/01/2020 - 12:57
The example you give of £1000 pcm rent, reduced to £990 pcm if paid on time, is perhaps not a massive incentive for tenants. How big could the incentive be? For example, would it be okay to charge a rent of £1100 pcm, but with a £100 pcm incentive to pay on time, thus in effect making the rent £1000 pcm (but only if paid on time)? Doe the size of the incentive make a difference to the legality of offering the incentive?... Read More