Options needed for setting up a flexible short term tenancy agreement

Options needed for setting up a flexible short term tenancy agreement

14:19 PM, 17th March 2016, About 6 years ago 5

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I’m hoping you kind people can provide some opinions on the following situation.short term

I am about to complete on a BTL property purchase and the vendor wishes to remain as a tenant until they complete on buying a new property which is in a chain.

I want to be able to offer as flexible a tenancy agreement as possible while still offering safeguards for both parties.

Is 6 months the shortest AST period possible and can it have a break clause ?

Are there any other possible forms of tenancy agreement which could be applicable?

Many thanks in anticipation



Neil Patterson View Profile

14:23 PM, 17th March 2016, About 6 years ago

Hi Chris,

Your solicitor may be able to draw up a contract for you, but you should also try our friend Tessa Shepperson at Landlord Law as it is her AST that we use. please see >> http://www.landlordlaw.co.uk/home-page

Unfortunately I do not have a short term contract to hand, but other readers may be able to assist 🙂

Romain Garcin

16:59 PM, 17th March 2016, About 6 years ago

Hi Chris,

There is no minimum term, so you could amend a standard AST to reduce the term.
Or, you could grant a periodic AST from day one.

If it is not possible to evict an AST tenant during the first 6 months unless he breaches the terms of the tenancy, but that shouldn't be an issue for you if you purchase the property for BTL.

You might be able to avoid an AST altogether for added flexibility (and less red tape) but you definitely need knowledgeable legal advice on this.

Robert Taylor

11:56 AM, 18th March 2016, About 6 years ago

Is this not classed as a "Sale and Rent Back"?
I know the regulation on allowing vendors to rent the property they have just sold has been tightened up but not sure what the current situation is?
Can anyone comment further?

Piers Calascione

13:03 PM, 18th March 2016, About 6 years ago

I'm keen to find an answer to this one as well. We have furnished holiday lets & like to get long term rentals in the winter. In order to remain compliant with tax rules this must be for 155 days in the year or less ie less than six months.
The best I've come up with is to create a Licence to Occupy. They become Licencees & pay a Licence fee, not tenants & rent. You are trying to avoid creating an AST, which is tricky as this is the default in Law & to avoid this the Licence rules have to be followed strictly. These rules include retaining a 24/7 right of access & the Licencee having a permanent home elsewhere.
Should the agreement fail & you end up seeking possession you will have a tough job on your hands persuading a judge you haven't created a tenancy with all the usual AST rules that implies. You cannot register a deposit for less than six months for instance & without registering you cannot serve a section 21 etc. The law is a mess in this area from what I know about it. We need reform to introduce legislation to address this.
In summary, my approach is to choose licencees carefully, hold a deposit myself without registering, produce a fancy Licence to Occupy & hope for the best.

Michael Barnes

20:12 PM, 18th March 2016, About 6 years ago

Reply to the comment left by "Robert Taylor" at "18/03/2016 - 11:56":

Having looked at the FCA web site, it appears that "sale and rent back" exists where the vendor has sold at a discount in return for the right to continue living there as part of the same agreement.

If there has been no discount for right to rent, then it appears (to me) that the "sale and rent back" regulations do not apply.

However, one should contact the FCA to get a definitive statement on this.

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