Open ended tenancies and on the hook for start dates?

by Readers Question

13:55 PM, 3rd January 2019
About 2 years ago

Open ended tenancies and on the hook for start dates?

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Open ended tenancies and on the hook for start dates?

As Scotland is leading the way in bringing more uncertainty to an uncertain future for the PRS I am faced with a puzzling question. I am currently advertising a vacant property, but notes of interest are coming from prospective tenants looking to secure a property in September 2019.

Basis I cannot assure a future tenancy as once the property is tenanted in the near future I would have to await until current (new) tenants have elected to leave and that could be any time if at all.

This got me thinking – can I sign up for a start date with the qualification ” subject to conditions being met” such as the current tenants having left ?

Another related question would be – what happens if you sign up a lease for a future, date but the property is not available as occupying tenant has not left? Are you on the hook for the new contract?

Many thanks

Asif


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Comments

Kevin Thomson

12:07 PM, 5th January 2019
About 2 years ago

Reply to the comment left by AA at 05/01/2019 - 10:15
real problem for student lets, as I see it, is the June and July period.

with no fixed term students can no longer be forced to stay into the summer after their courses finish around the end of May.

August can always be covered by a Festival let, but June and July can be slow going for holiday lets. My experience is that a student flat and holiday lets are not a marriage made in heaven. holiday lets have to be closer to hotel standard than most student accommodation.

On this note I'm considering exiting the student market and renting HMOs to working people.

AA

18:14 PM, 5th January 2019
About 2 years ago

Reply to the comment left by Kevin Thomson at 05/01/2019 - 12:07
That at the moment is my take on the state of play as well. There are lots of student accommodation companies popping up left right and centre but when I enquire about the rates charged, they are eye watering. For a room ( and not a spacious one at that) with bed, desk, kitchenette and en-suite it is £250pp per week. That's 2 x what the PRS charges, albeit you share kitchen and bathroom with a couple of friends as you would in any single household and me specifically I provide a lounge. That is the upside of the PRS so far.
But with this open ended tenancy arrangement there is no imperative to select between students or working people, it is neither here or there.
But a key question that has arisen in the conversations is this - student accommodation companies are exempt from open ended tenancies, what legal status do they occupy that allows them to do this ? And can that status be emulated by the PRS ?

Kevin Thomson

20:50 PM, 5th January 2019
About 2 years ago

Reply to the comment left by AA at 05/01/2019 - 18:14
it would certainly be very useful if student HMOs could receive the same treatment as student accommodation companies.

I've no idea why they do or even should have this exemption from open-ended tenancies, ie what makes them so special?

to my mind the new SNP lease will kill Edinburgh Festival lets in student HMO flats. I've had many performers stay in such flats for many years. I'm being contacted now about Festival lets but I can't offer anything unless I know students will be leaving. And students leaving mid-May then having a Festival let is no use to me. As in I'm going back to my first point about June and July. I might find some holiday lets to cover the shortfall in June/July, but often not. And that's before factoring in the extra work the holiday lets generate.

bottom line is I will now need a new set of long-term tenants from June, rather than September in pre-SNP-lease days. So, if students want to sign up from 1st June that is fine, otherwise it will be working people.

Festival performers will sadly have to look elsewhere.

Michael Barnes

21:05 PM, 5th January 2019
About 2 years ago

Reply to the comment left by Chris Daniel at 04/01/2019 - 11:27
It is my understanding that once you (LL) have made an offer (e.g. given them a contract to sign) and the prospective tenant has accepted that offer (e.g. by signing the contract and returning it), then a contract exists between you.

So, by getting prospective tenants to sign but not signing yourself does not get you off the hook for breach of contract.

AA

21:40 PM, 5th January 2019
About 2 years ago

Reply to the comment left by Michael Barnes at 05/01/2019 - 21:05
mmmm…. I am definitely not a lawyer and understand the " offer " "acceptance" but sending the lease could be for the tenant to peruse and for you to consider. So the signature is the binding element, that they agree to the conditions and you affirm it. Any solicitors wish to comment ?

AA

21:54 PM, 5th January 2019
About 2 years ago

Reply to the comment left by Kevin Thomson at 05/01/2019 - 20:50
What you have said completely resonates with me and I am in the same boat. The interesting thing was rents jumped up markedly this time around i.e. 08/18 onwards.
4 beds were circa £2100 from £1800 and now I am seeing £2400 for properties 08/19. onwards. LL s south of the border should take note. If this type of arrangement does not visit you then some hybrid version will.. The old AST's are an itch that politicians cannot resist the urge to scratch.

Luke P

22:03 PM, 5th January 2019
About 2 years ago

Reply to the comment left by AA at 05/01/2019 - 18:14
Good point AA, does anyone know the specific legal mechanism/wording that allows the accommodation companies to do this?

Jireh Homes

19:50 PM, 6th January 2019
About 2 years ago

Potential solution is to request tenant to issue a Notice to Leave for a date in the future, which does not stop them leaving earlier but does commit them to an "end date". Join Scottish Association of Landlords (SAL) and they will guide you on the best solution and keep you legally correct.

AA

8:49 AM, 7th January 2019
About 2 years ago

Reply to the comment left by Jireh Homes at 06/01/2019 - 19:50
This is covered in the legislation - the tenant could take the position that s/he was coerced, and therefore notice would be null and void. The notice can only be issued after the tenant has taken possession of the property. A question could arise of why the tenant issued a notice to leave early in the tenancy on a future distant date. Even if a notice to leave is issued, the tenant must have vacated the property as if s/he has not done this, it becomes a tribunal issue.

Luke P

9:18 AM, 7th January 2019
About 2 years ago

Reply to the comment left by AA at 07/01/2019 - 08:49
I’d the notice forced to be dated (the date of the signature, I mean)? What about…

“I, Tenant, hereby give the required minimum 28 days notice to end the tenancy at the property at 1 Any Street on 06th July 2019 and will vacate on/before that date.

Signed,

Tenant”

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