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11:05 AM, 4th November 2022, About 2 years ago 31
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Hello everyone, I’ve just had a reply from Serco regarding their offer to take a properties to be used by the Home Office for asylum seeker use….
I welcome any comments good or bad – what do you think of this? What other questions do you have? Pitfalls?
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Thank you for your enquiry to Serco.
Serco currently operates the Asylum Accommodation Support Contract (AASC) within the North West of England, East of England and Midlands and are looking to expand our portfolio within these areas.
Our business model supports Investors, Landlords and Agents in the drive to return a profitable yield, within a legal and ethical framework which can only benefit both the occupier and landlord.
What we can offer:
A 7-year lease with an FSE 250 company, with an option to renew
Blue Chip Tenants
Day-to-day maintenance and repairs undertaken at no cost to the landlord
Guaranteed Rent (paid monthly by BACS when you hand over the keys)
Monthly property inspections
Council Tax and utilities paid
No void properties
No Management Fees. No Legal fees. No registration fees. No set-up fees
No rent arrears or debt collection
No Call outs payments to contractors
Full HMO Management
Administration of licenses and certification administered by our team of experts
All our properties are managed by in-house Housing and Maintenance Officers, supported by a team of administrators.
Properties must be vacant.
Our demand is for 1, 2 and 3 bedroom family property and 4+ bedroom HMO’s and at present there is no cap on the number we wish to acquire.
Each property offered to Serco is required to go through a due diligence with the Local Authority (LA) and the Local Police, called a Property Post Code Consultation (PCC). This is to ensure the property is fit for purpose and safe. This process takes between 2 days to 2 weeks.
Once the property is approved by the LA, a Property Negotiator will be assigned as your account manager, who will carry out an initial inspection to scope out the property, a work schedule will be drawn up and a letter of intent shared. Once you have the brought the property to the necessary standard the Property Negotiator will revisit and sign off the property and a Lease will be issued.
I have attached a draft copy of the Lease and the property standards as well as some FAQ’s for your perusal.
The key points of the Lease are below.
CERTIFICATION AND LICENCING
• Certification – Serco to undertake. LL to be recharged
• HMO License – Serco to undertake. LL to be recharged
• Selective Licence – Landlord to undertake and fund
BREAK CLAUSE
· Serco must give 2 months’ notice to LL
· LL must give 6 months’ notice to Serco
LANDLORD OBLIGATIONS – IF REQUESTED TO DO SO
Year 4 of Contractual Term and every 3 years thereafter
Floor covering replacement
Full decoration of the Property
Replacement of inventory (the latter being where applicable) in the fourth year of the Contractual Term and every 3 years thereafter
Year 6 of Contractual Term
New kitchen, new bathroom
Replacement windows
Repair/replacement to boundary markers
Year 7 of the Contractual Term
External decorations including gutters; facias, soffits, rendering and doors
BOILER
· Replacement of the boiler following 2 or more repairs over 3 months or a repair bill of more than £500
· replace the boiler if 3 or more repairs to the boiler over a 6 month period and/or expenditure of £500 or above in a rolling 6 month period.
RENT
To be paid by BACs, 2 months in arrears
INSURANCE
LL to insure, insurance policy to note use for Asylum Seekers.
ASSIGNMENT
Serco is permitted to assign to other group companies and to any company taking over the Compass Contract without further consent of the LL;
NOVATION = ALLOWED TO PASS ON LEASE (SIMILAR TO ASSIGNMENT)
Serco is allowed to transfer the Lease to the Home Office or another company nominated by the Home Office (i.e. if Serco’s contract ends, the Lease will continue and we have the choice to pass it on to the HO/new Provider. This is good for Serco and also for LLs, as the lease (their income will continue)
REPAIR & MAINTENANCE (SCHEDULE 1) – SERCO
Serco takes on the repair and maintenance obligations (non-structural). Structural and Latent defects are the responsibility of the Landlord
SCHEDULE OF CONDITION. A photographic record of the property at the start needs to be attached to the Lease.
DSR
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Have you been suffering from rent arrears?
Beaver
17:01 PM, 5th November 2022, About 2 years ago
Reply to the comment left by Accommodation Provider at 05/11/2022 - 12:04
Unusual for a lawyer to give advice 🙂 🙂 but thank you! And anyway, I agree:
- the average cost of refitting a bathroom is £1.9-7.4K.
https://www.mybuilder.com/pricing-guides/bathroom-fitting-cost
- Kitchens are more difficult to calculate but easily in the region of £1-7K.
https://www.mybuilder.com/pricing-guides/kitchen-fitting-cost
Probably going to be much more than that if you have such things as ovens and other appliances fitted.
The contract says you have to put one in every 7 years. So occupants don't care about the kitchen because you have to pay for it, no incentive not to trash it.
Looks high risk to me but then social housing tenants are high risk as well. I think if I was considering this I'd need to write up a different contract to I'd have to add a lot in legal fees to my budget.
Laurie
13:51 PM, 6th November 2022, About 2 years ago
No way Jose, what an awful contract, if you cannot find tenants, would be better to sell, even if you have to accept low offer.
Pixie Props
14:51 PM, 6th November 2022, About 2 years ago
From what I know these plans are never worth considering. Councils used to run similar schemes to house benefit or distressed tenants.
When I got started I and colleagues were very careful not to swamp a street with an over supply of rental homes, as it brings a location down market.
I’ve seen nice areas degraded by to many rentals to owned ratios. Amazon warehouses have ruined areas with too many of their imported staff. With saturated areas they turn your country into theirs and we know what that looks like. Another situation for ruining places for folk to live are drug dealing populations.
Rennie
23:37 PM, 13th November 2022, About A year ago
Bargepole!
Each property offered to Serco is required to go through a due diligence with the Local Authority (LA) and the Local Police, called a Property Post Code Consultation (PCC). This is to ensure the property is fit for purpose and safe. This process takes between 2 days to 2 weeks. What the feck is that?
Reluctant Landlord
13:15 PM, 14th November 2022, About A year ago
Reply to the comment left by Rennie at 13/11/2022 - 23:37another layer of bull poop to spread on the already steaming layer of bureaucratic nonesence.
I actually forsee this as a local council imposed requirement so they can actually refuse to let the property be used for such purpose.
The numbers of Councils going hell for leather to try literally anything to stop the HO using hotels is unbelievable. Councils see themselves being dumped on. Not about accommodation as such but the impact of having such numbers all needing school places, extra support etc all at once is going to financially cripple...
I think this is another ploy way of stopping asylum seekers landing in their patch, full stop....
so you can imagine what comes next...they will be looking at ANY opportunity to come sniffing round the property for compliance...and throwing fines like confetti at the LL if there is anything amiss at all.
AVOID AVOID AVOID!
Reluctant Landlord
15:56 PM, 14th November 2022, About A year ago
Reply to the comment left by Beaver at 05/11/2022 - 17:01
....so may fees and things to add in like hugely inflated building insurance costs etc, it would be cheaper for them to buy the property off you probably.
Oh dont forgot - is there a price you can even contemplate putting on if you know full well that as a result of giving to Serco the LA will be looking at your property fondly with gnashing teeth waiting to pounce. ?
I think LA's where there don't want the asylum issue in their back yard will be looking at any possible thing to get a LL shafted or fined as a result (as well as being able to stick 2 fingers up to Serco at the same time). They need someone to bleed dry.....and the LL is the sitting duck.
Beaver
16:11 PM, 14th November 2022, About A year ago
Reply to the comment left by DSR at 14/11/2022 - 15:56
So from my point of view it doesn't bother me particularly if people are asylum seekers. There have of course in the past been problems in some of our cities with asylum seekers from Libya who did not know how to behave. But travelling for business I've met people from Afghanistan in hotels and they seem decent enough people. Afghan refugees may well be lower risk than UK social housing tenants; I don't know.
So from my point of view the key issues would be:
1. Would my insurance company allow it
2. Would my mortgage company allow it
3. Would serco take action if the asylum seekers caused a problem.
But now that I have more detail there would be no point in finding out any of the above because I can see from this thread that it's a terrible contract.
Reluctant Landlord
10:45 AM, 15th November 2022, About A year ago
I've just had my insurance agent come back with a the only quote they could get to insure one of my 4 bed properties under the Serco contract
£2,135 per annum.
Each claim would be a £2,500 excess for ANY peril.
And that is on the basis it would NOT be an HMO. If it were then this company would not offer cover at all. (NB Serco said to me they would only put families in if that is wat I wanted, but the contract says otherwise as they have free reign to put in whoever and whenever, the LL has no say. Ergo you would have to go through the HMO licencing PLUS then have to find someone to insure the building....)
I think the writing is on the wall Serco...I can't see how you are going to secure any private properties.....
Beaver
10:53 AM, 15th November 2022, About A year ago
Reply to the comment left by DSR at 15/11/2022 - 10:45
So assuming that your mortgage provider would let you do it: you'd have to factor in increased insurance costs; plus the cost of an extra bathroom and kitchen every 7 years because Serco is transferring that risk to you and removing the incentive from the occupant to look after the property; and you'd have to factor in extra legal costs.
The rent would need to be very high compared to what you'd expect under an AST.
Annie Landlord
12:23 PM, 15th November 2022, About A year ago
Serco has a long standing dreadful reputation for any service they run - from the old crb checks through to prisons, rail services and an array of public services. They are hand in glove with key government ministers and are continually offered contracts involving services to vulnerable people that they manage very, very badly. Wouldn't touch them with the proverbial bargepole.