Solicitor says it is virtually impossible to get rid of Protected tenants?

by Readers Question

16:17 PM, 17th February 2016
About 3 years ago

Solicitor says it is virtually impossible to get rid of Protected tenants?

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Solicitor says it is virtually impossible to get rid of Protected tenants?

My family have a property in Hackney, which comprises of a commercial property and a flat above which is accessed by a separate entry to the side of the street.impossible

I need some serious advise how I can repossess the flat as I have protected tenants who have been living there since 1986! They are a husband and wife in their early 50’s with a son age 14.

I have spoken to several solicitors who basically say its virtually impossible to rid of them, unless they are not paying the rent. They are protected under the 1977 Rent Act. I realise protected tenants are becoming a thing of the past, but in my case this could go on forever as it can be handed down to their son.

Unless I can do something which is legal I am in a position where I may have no alternative but to pay them out, which I know that is what they wish and are hanging on for.

If the property is worth for instance £500,000, what percentage should I offer the tenants as I have not got a clue and really begrudge going down this route. I realise I would have to negotiate with them, but I need an indication of what is a reasonable offer to make.

Over the years these tenants have been a nightmare which I wont bore you with, but the time has come for them to go!!

I would really appreciate if somebody out there who has had this nightmare situation can advise me what action I should take or point me to a relevant person that may be able to help.

Much appreciated

Salvina



Comments

Neil Patterson

16:21 PM, 17th February 2016
About 3 years ago

Dear Salvina,

I would ask our partners at Cotswold Barristers. You can make contact with them via the P118 Members Profile contact form of Mark Smith (Barrister-At-Law) see >> http://www.property118.com/member/?id=1945

Alison King

0:32 AM, 18th February 2016
About 3 years ago

I think it becomes a normal AST once it passes to the son. Not much reassurance but better than forever.

Monty Bodkin

9:11 AM, 18th February 2016
About 3 years ago

Reply to the comment left by "Alison King" at "18/02/2016 - 00:32":

I think it becomes a normal AST once it passes to the son.

No it doesn't.

Assuming the op is correct and it is a 1977 Rent Act tenancy, then it becomes an Assured Tenancy.

A very different thing to an Assured Shorthold Tenancy.

Monty Bodkin

9:22 AM, 18th February 2016
About 3 years ago

Salvina,

Speak to an experienced auctioneer to determine the value.

I recently offered 25% below open market value for a 1977 Rent Act Tenancy with a 90 year old tenant with no successor. (Offer was turned down BTW)

A potential 14 year old successor to nightmare tenants? Hmm...

I'd flog it off at auction, life is too short.

Chris Byways

11:51 AM, 18th February 2016
About 3 years ago

Either you are a rogue landlord wanting to make a quick buck, or you have nightmare tenant, or anything in between.

I went to a auction and the guide price was 90k, the market value was £300k. Most people viewing were eyeing up the occupants age, and wondering "can I get her out legally?" (I ended up subsequently buying another property I first saw at that auction, having gone to see the assured tenancy one.). I do now see the tenant around, and it worked out well for her and she is there, for the long haul.

They have moral and legal rights, but read the tenancy agreement carefully and inspect at the required intervals, and take all steps to ensure tenant complies fully with their obligations, just as you will be doing. Consider if a social behaviour order would assist you.

Could the 14 year old tenant's grandchild have a right to still be there? Alison's suggests not, so an important factor to establish.

Ian Narbeth

12:14 PM, 18th February 2016
About 3 years ago

The solicitors you have spoken to are right. You will have to pay to buy the tenants out unless they are in breach. You may be able to increase the rent and put pressure on them but if they pay it they are entitled to stay. Even if the 14 year old does not want to take on the tenancy the tenants may live for many years.

Other points to consider. Are the tenants in good health? Is the house modernised so as to be attractive to the son? (My parents had sitting tenants 30 years ago who had been in the house since 1960 but eventually left voluntarily because of old age and not wanting to continue to use the outside lav in winter.) On the other side of the coin it is getting harder for children to get their own homes so junior may well want to stay even if the house is not great,

Traditionally houses with sitting tenants have sold for 25-40% below open market value with vacant possession. The tenant cannot be forced to accept money to give up the tenancy but expect to pay a third to half of the difference between the two values if they are willing to go and are properly advised.

I'd go and have a quiet chat with them armed with your cheque book. If they are not interested, sell at auction.

Ian Ringrose

12:24 PM, 18th February 2016
About 3 years ago

Did you own the building BEFORE the tenant moved in? If so, you may wish to redeveloper your factory.... Talk to http://anthonygold.co.uk they have a team that is good at more complex cases like this.

Charles King - Barrister-At-Law

12:27 PM, 18th February 2016
About 3 years ago

Salvina, whether it be from us or any other lawyer, you do need specialist housing advice from an experienced housing lawyer. Yes, you will have to pay for it, as you would have to pay for any service, but why go on with the uncertainty and the nightmare when you haven't yet obtained proper advice about the situation? Shop around. Why did your solicitor advise you as s/he did? Obtain some comprehensive advice. That's what lawyers do. Problems involving rights to succession to protected tenancies, and grounds for possession under the Rent Act 1977, are difficult, but not at all impossible to resolve. Even on this forum, with the vast wealth of experience of the readership, there will be conflicting views and strategies. Think about how much you are likely to lose on a sale (or are now losing, perhaps every month) and balance that against the cost of getting some good advice. The answer to your dilemma, possibly one already suggested by the sensible contributors to this site, will present itself to you. Good luck. Fretting will not solve the problem!

Neal Craven

13:28 PM, 18th February 2016
About 3 years ago

Is the commercial unit separately let?

If that is the case the commercial value will not change. So the marriage value will only relate to the flat. If the flat is likely to go for owner occupation I suspect you would have to sell at 60 to 70% of the OMV (with VP) of the flat and therefore your potential gain will be 30% to 40% of the value of the flat and that's what you need to split.

Or if the property is likely to remain an investment you need to look at the capital value of the profit rent (i.e. difference between market rent and maximum you could receive) and capitalise that for a period taking in to account the likely period of the tenancy.

Paul Franklin

14:31 PM, 18th February 2016
About 3 years ago

A nightmare to you maybe in light of ASTs now being the default tenancy but in 1986 this was standard. The tenants have paid rent for 30 years (more than many standard mortgage terms). Now you want them out it's apparently a nightmare but this was always the agreement between landlord and tenant - a rent act tenancy. And this is what you still have. I can understand why the tenants would not want to give up their home and their security - would you?

Would you want to give up your home where you have paid the mortgage for 30 years, raised children and made a life there, to be left with nothing at the end of it - and left to pay market rent and agency fees for an insecure AST, for somewhere where you probably don't want to be? I wouldn't. Why would anyone?

Sorry I couldn't resist.

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