Renting to a registered charity?

by Readers Question

8:48 AM, 9th August 2016
About 3 years ago

Renting to a registered charity?

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Renting to a registered charity?

We have agreed to rent to a charity and have been told that an AST can’t be used. Can anyone point us in the right direction for the correct tenancy agreement as the NLA don’t have one.charity

Also, does anyone know of any pitfalls we should be aware of?

We have been landlords for many years but never come across a scenario like this.

All help gratefully received.

Best regards,

Angela



Comments

Mark Alexander

19:51 PM, 25th September 2016
About 3 years ago

If the charity is renting to provide housing for an employee then a company let agreement is fine.

If the occupier is not an employee then you need a rent to rent style lease and sublet insurance, both of which are available purchase via this website.

Sublet insurance https://www.property118.com/sublet-insurance/90302/

Rent to Rent Lease Template https://www.property118.com/guaranteed-rent-to-rent-lease-contract-template-download/41817/
.

ellie warburg

1:30 AM, 26th September 2016
About 3 years ago

Thank you Robert & Romian for the feedback.
If the tenant ie the charity is not letting the rooms but providing them and not charging would the same HMO terms be applicable?
i assume that from your very helpful points Robert, that the compnay lease agreement could stipulate that should a HMO status prevail that they the charity would be responsible for the costs associated with conversion and I as the landlord would provide my permission. As you point out I do not want to pay these costs for a two year lease but would consdier it is they are prepared to undertake the work.

Robert Mellors

8:44 AM, 26th September 2016
About 3 years ago

Reply to the comment left by "ellie warburg" at "26/09/2016 - 01:30":

Hi Ellie

Why would the charity not charge for the letting of the rooms? Anyway, regardless of whether they charge or not, I believe that it would engage the HMO duties.

As for whether you can include some terms and conditions that make it the charity's responsibility to carry out the HMO conversion works (and abide by the HMO regulations), my feeling is that you can certainly include such conditions and thus hold the charity contractually liable should they cause you loss due to defaulting on this, BUT your contractual terms and conditions may not override the legal responsibility of you as the owner. Thus, if the HMO regs are breached, the Council may sue you for that breach, but you may then be able to sue the charity for the contractual breach. - NOTE: I am not a solicitor, so I may be getting this wrong, this is just my personal understanding of the possible situation from the limited information available.

You also need to give some thought as to what happens at the end of the lease period, e.g. are you expecting the property back in the same condition as when it was let? If so, to what extent would this mean that all the HMO conversion would have to be removed? Also be aware that such a letting would create a much higher level of "wear and tear", so do you fully understand and accept this, or would you be expecting the charity to replace items (e.g. carpets) and redecorate? It is very important that both you and the charity are clear as to each other's expectations both during the lease and at the end of the lease.

ellie warburg

15:58 PM, 26th September 2016
About 3 years ago

hello again
a slight further complication in that the organisation is a CIC (company interest companies ) not a charity so I have now come to a grinding halt.They say that the houses would not be used in HMO terms .
Does anyone have knowledge of this ? my regular solicitor does not have the specifics I need for this .

Romain Garcin

16:08 PM, 26th September 2016
About 3 years ago

As this discussion progresses it seems to me that perhaps you would do well to either find a 'normal' tenant, or get a knowledgeable solicitor fully involved and demand a significant premium over the market rent for a normal AST.

Robert Mellors

17:44 PM, 26th September 2016
About 3 years ago

Reply to the comment left by "ellie warburg" at "26/09/2016 - 15:58":

Hi Ellie

So the charity is not a charity,
you don't know what they intend to do with the property if they rent it from you,
you don't know what sort of agreement to use,
you don't know what terms to put into an agreement,
you don't know which party will be responsible for what,
your solicitor is not a specialist and has no idea what they are doing in relation to such a letting.
- I think Romain is right, you perhaps need to re-think your letting plans, perhaps find a normal tenant and let the property on a standard 6 month AST. It seems very risky letting it to the CIC when so much is unknown/uncertain and you you have no experience of what can go wrong with such a letting.

Bernsan

21:32 PM, 28th September 2019
About 3 weeks ago

How do I begin to contact charities for my rental property.

Kathy Evans

11:35 AM, 1st October 2019
About 3 weeks ago

Reply to the comment left by Bernsan at 28/09/2019 - 21:32
Depends what area you are in. A letting agent near me has a special scheme for tenants with PTSD, for example, and also recovering addicts.

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