Student tenancy agreement update needed?

by Readers Question

8:46 AM, 4th July 2019
About 5 months ago

Student tenancy agreement update needed?

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Student tenancy agreement update needed?

We have been in the student lettings business for a number of years. With the changes that have recently come in with regard to fees etc. we would now like to update our tenancy agreement to include the guarantor agreement. We have been advised by the NLA that the guarantors should always sign first before the tenancy is signed by the tenants?

Plus we would like a novation agreement for the occasions when one tenant drops out and finds a replacement. If we do a new replacement tenancy, we then have to redo the guarantor agreements for everyone else listed on the joint tenancy and re-register the deposit. Now we can no longer charge fees for this, the time spent redoing the agreements will make it far too long to be worthwhile however we do not want to penalise student tenants who have genuine reasons for moving away and have found their own replacement.

Can anyone recommend a solicitor/barrister? We already have agreements (except for the novation agreement) and would like them updated to make sure we are complying to the letter of the law and so the guarantor agreements are water-tight should we have to go to court to recover rent.

Thank you for reading this and look forward to any replies.

Jane



Comments

Neil Patterson

9:03 AM, 5th July 2019
About 5 months ago

Hi Jane,

I would start with Tessa Shepperson of Landlord Law who we all know very well and worked with a long time at Property118.

See >> https://landlordlawservices.co.uk/

Tessa Shepperson

9:37 AM, 5th July 2019
About 5 months ago

Thanks Neil.

We have a special student tenancy agreement Jane, which is discussed here https://landlordlawservices.co.uk/the-landlord-law-student-tenancy-agreements/ which we have recently updated to make compliant with the Tenant Fees Act.

We can't help with the novation agreement though. I generally recommend a new tenancy agreement in all cases - I can't see how a novation agreement will get you out of re-doing the guarantor's agreements. As the resultant tenancy will not be the one which the guarantor agreed to guarantee.

Find out about our tenancy agreement service generally here: https://landlordlaw.lpages.co/landlord-law-tenancy-agreements/

Yvonne Francis

10:25 AM, 5th July 2019
About 5 months ago

Just to say, as I am a student landlord of long standing, I always get my guarantees signed, and checked before my tenants sign.

If a tenant leaves, and a new replacement has to be found I have often created a new lease with new parental guarantees, but last time it happened a few years ago, I used a Deed of Assignment, forms for which can be found online. I did not require the rest of the group to supply a new guarantee only a guarantee from the in going tenant to cover that period.

That said, you are very wise to seek legal advice as you are clearly doing.

Tessa Shepperson

10:52 AM, 5th July 2019
About 5 months ago

You need to be very careful about guarantees. If you sign a guarantee with Mr A for a tenancy with A, B and C as tenants, those are the people who he has agreed to guarantee.

So if you change the situation - either by assignment or by getting tenants to sign a new tenancy agreement, so that the tenants are now A, B and D - Mr A did not guarantee a tenancy with D as a tenant or indeed with D having a right of occupation. So this will almost certainly invalidate the guarantee. For example, C could have been a nice quiet person but D a wild partygoer with a history of alcoholism who Mr A would never have agreed to guarantee.

You are only safe if you get Mr A to sign a new form of guarantee.

Most tenancies run on without any problem and so these 'solutions' appear to be satisfactory. It is only when you get a problem and a dispute with the guarantor that you may find that the guarantee is now invalid - as the tenancy was not the same as the one the guarantor agreed to guarantee.

By then it is too late to do anything about it and if you are an agent you will have an unhappy landlord on your hand and probably a claim against you.

Yvonne Francis

11:35 AM, 5th July 2019
About 5 months ago

Reply to the comment left by Tessa Shepperson at 05/07/2019 - 10:52
Yes I think this is good advice. Point taken, thank you. Luckily I'm not an agent!

Michael Barnes

1:12 AM, 8th July 2019
About 5 months ago

" If we do a new replacement tenancy, we then have to redo the guarantor agreements for everyone else listed on the joint tenancy and re-register the deposit. Now we can no longer charge fees for this"

Why can fees no longer be charged for this?
The contract has been signed and the tenant is asking for changes. That appears to me to be allowed under TFA.

Tessa Shepperson

6:49 AM, 8th July 2019
About 5 months ago

My understanding is that when doing a new tenancy due to a change of sharer, you can charge your actual reasonable costs or £50 but not both.

Reasonable costs are most likley to be things you have had to pay out for such as new inventories. So you need to make sure you keep all invoices.

The alternatives are either to refuse to accept any change of sharer during the fixed term, or to rent student houses by the room where it is easier to do the change.

Michael Barnes

11:39 AM, 8th July 2019
About 5 months ago

Reply to the comment left by Tessa Shepperson at 08/07/2019 - 06:49
"Reasonable costs are most likley to be things you have had to pay out for such as new inventories."

And things such as
- printing;
- paper;
- postage;
- envelopes;
- travel;
- (and if you have an agent involved) agent's charges
essentially, anything that you would claim for on your tax return.


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