Tag Archives: Tenant eviction

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We first published this article back in 2013. It has been resurrected because the information provided within it is just as relevant today as it was back then and the Rent to Rent strategy continues to be a hot topic of discussion at many of the UK’s property networking Events.

We produced this guide to share answers to some of the most frequently asked questions relating to this subject, specifically in relation to contracts.

When can tenants be offered a license as opposed to an AST?

The benefits of providing a license is that it is much easier to evict tenants. There is no requirement for a minimum 6 month term, no requirement to give them two months notice and no requirement to obtain a Court order and instruct bailiffs to regain possession if a tenant refuses to move out after the notice period. Furthermore, tenants deposits do not need to be protected in a tenancy deposit scheme if a property/room is let on license or a lodgers agreement, which is a form of license. No wonder Rent to Renters want to offer licenses instead of AST then!

However, licenses can only be used under the following circumstances:-

1) The room/property is being rented as holiday accommodation. You may need to prove that the occupier of the room or property has another residence though, e.g. a place where they are registered on the voters roll.

2) You are a live in landlord. If you live in the property yourself you can take in lodgers

3) If you provide a service such as a hostel or a B&B. For example, if you provide cleaning services including changing the bedding once a week or breakfasts in the morning.

What if none of the above apply?

If none of the above apply then the basis of the tenants occupation of the property is an AST whatever your contract says. This is because legislation in the housing and 1988 (and subsequent updates) and the landlord and tenant act 1985 over-rule whatever your contract says.

What is the right contract to have between the property owner and the Rent to Renter?

First, you need to understand what is the wrong type of contract and why.

Company Let Agreement (AKA corporate letting agreement)

These allow a company to use the premises to provide accommodation for their employees. If you are using a company let agreement and subletting a property or a room within it to a person who is not your employee then you will be in breach of the agreement. Many Rent to Rent companies are using these agreements in ignorance of this fact. They do so because deposits do not need to be protected with a tenancy deposit scheme.

AST (Assured Shorthold Tenancy Agreement)

AST’s do not generally allow subletting, therefore, any subletting without the owners permission is a breach of contract. Furthermore, the property owner could obtain possession of the property after just 6 months, even sooner if you are in breach of contract. If you have sublet the property and your tenants are still occupying the property after the owner has obtained possession you could be held liable and subjected to claims for massive financial compensation.

The correct agreement between a property owner and a Rent to Renter is a commercial lease.

Don’t use just any old off the peg commercial lease , you need one which is professionally drafted specifically for Rent to Rent which includes clear, fair and reasonable provisions for subletting a residential property. Do bear in mind that the property owner is highly likely to seek professional advice about the contract between you. The owner will generally be advised not to lease the property for more than 5 years and to ensure the lease is contracted out of the landlords and tenant act 1954 to ensure that it is his choice alone whether to offer to extend the arrangement by granting a new lease at the end of the contracted period. The owner of the property will also be advised to ensure that you become responsible for the maximum number of residents, maintenance, basis of occupancy/subletting, licensing and statutory requirements and maximum number of occupants. Therefore, it is important to be able to offer a well drafted document covering all of these points at the earliest possible opportunity. This will give the property owner and his professional advisers confidence in you being a professional operator.

Successful Rent to Rent Case Study

Let me give you a great example of a lady I spoke to about her success story.

She came across a situation whereby an elderly guest house owner had fallen ill and moved into a granny annexe at her childrens home. The Guest House was on the Lincolnshire Coast and the children were based in the Home Counties. The Guest House had been in the family for for two generations and the family are reluctant to sell it. Based on profits, the family were advised by a professional commercial agent that the market rental value for the property was £1,000 pcm. The decision of the family was to let the property for 5 years prior to making a decision on whether to sell it OR for one of her grandchildren to run it OR to continue to rent it as a going concern. As the property was already registered as a guest house it already met all of the requirements to be a HMO. There were no selective licensing or Article 4 barriers to contend with in the area.

The rent to renter I spoke to had interesting plans for the property. She had spoken to the local authorities about the requirement for temporary accommodation for victims of domestic violence and homelessness as a result of mortgage repossessions and other forms of eviction. Her son would reside in the property as caretaker and would also serve breakfast and offer a basic cleaning service including a weekly change of bed linen. Under the circumstances, all rooms could be let on licenses. The profits on this activity amounted to more than £5,000 per month and within a week all 16 rooms were full.

Rent to Rent Commercial Lease Contract

To have a suitable contract professionally drafted and ready to present to a property owner and his professional advisers typically costs around £3,000. In the case study presented above the lady purchased our Rent to Rent Commercial Lease template for just £97. The document template was professionally drafted by Justin Selig who is a qualified solicitor specialising in property and contract law. The Rent to Rent Commercial Lease Template has been one of the most popular premium downloads on this website. The lady in our case study required a few amendments to the standard template due to the sub-letting arrangements in the template being drafted to assume AST’s would be used, however, that was easily sorted by her own solicitor who charged her just £300 to make the necessary amendments. In all she saved over £2,500 in legal fees and now makes over £5,000 pcm from her first Rent to Rent deal. Needless to say, she is now on the lookout for similar opportunities!

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Rent to Rent Discussed on Radio 4 today in the next few minutes! Landlord Action, Latest Articles, UK Property Forum for Buy to Let Landlords

This Broadcast was meant to be last Wednesday but is instead being run today between 12pm-1pm.

Paul Shamplina, Founder of Landlord Action will be taking to the airwaves on BBC4’s You and Yours show, to highlight the shocking risk to landlords of the latest money making strategy to sweep the property industry, “Rent to Rent”.

It’s a simple concept: Rent a house, then sub-let the rooms to sub-tenants and make as much profit as possible.

This is a mushrooming phenomenon which has seen hoards of “experts” writing blogs, books and seminars on how to get started and even running courses costing up to £500 on how to bring in tens of thousands of pounds with virtually no out-lay. One such “guru” includes Daniel Burton who claimed he earned £35,000 a month from the get-rich-quick scheme. Last week, The Guardian revealed he has gone missing, leaving tenants and landlords across London hundreds of pounds out of pocket.

The idea behind how it works involves a tenant (or “renter”) offering a landlord a guaranteed amount of rent for a set period, say three years. “This amount is likely to be less than its actual market value but the landlord, in theory, is happy because the property is let and he does not need to worry about lost rent, void periods or tenant issues for the foreseeable future” says Paul Shamplina. The tenant agrees to look after the property, take care of maintenance issues and in some cases even carry out a refurbishment on the property. Then, the tenant sub-lets as many rooms as possible to willing sub-tenants who are happy to rent a converted lounge or dining room and live in a house shared with six other strangers. The “renter” then creams a profit on the difference between the rent he is paying the owner/landlord and the rent coming in from the sub-tenants as a result of the multi-let.

Mr Shamplina has been asked to discuss the latest craze and how landlords might get unwittingly caught up in this scam and, what they should do if they are. He comments “I have several concerns over the legal practices of this process and how it affects the very landlords it claims to ‘support’. In my view, if it is not carried out diligently the landlord loses control of the property which is where the problems begin. I suppose I speak from being at the sharp end of dealing with evictions but I would advise any landlords entering into such an agreement to tread very carefully.”

To hear Paul’s views on rent to rent, tune in to You and Yours on Radio 4 from 12pm on Wednesday 16^th October 2013.

In the pre-recorded interview Paul Shamplina mentions various tips for property owners considering Rent to Rent, one of which is not to accept Assured Shorthold Tenancy Agreement as these are not the appropriate contracts. Recently, Landlord Action announced they are now an alternative business structure regulated by The Law Society and have joined forces with The Law Department, headed by solicitor Justin Selig whose name you will recognise if you are a party to the Class Action groups fighting the West Brom Mortgage Company and Bank of Irelands decisions to increase the margins on their tracker mortgage products.

Having recognised a need for a professionally drafted commercial lease template to be readily available to Rent to Rent companies and property owners Property118 teamed up with Justin Selig to produce one.

The lease contract templates, guidance notes and notices are now available for immediate download for just £97 exclusively via Property118.com

The reason the contract templates are so competitively priced is due to economies of scale, the real cost of drafting a contract of this nature is thousands. Sufficient pre-orders of the contract template via Property118 made it viable to produce the documents and to share costs to arrive at this incredibly low figure.

If you are a property owner and you are being offered a “Guaranteed Rent” deal which allows your tenant to sub-let then this lease template is also for you as it protects your interests. If your tenant wants permission to sublet and you’re being offered a Company Letting Agreement or an Assured Shorthold Tenancy, that’s the wrong contract and should sound warning bells.

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Landlords Revolutionary Becomes Regulated Landlord Action, Landlord News, Latest Articles, Lettings & Management, Tenant Eviction, UK Property Forum for Buy to Let Landlords

Landlord Action is the original UK eviction service for landlord and letting agents. Set up as the alternative to solicitors, it has just acquired status as an ABS. So it’s now approved and regulated by the Solicitors Regulation Authority – so it can conduct all the legal work on behalf of landlords and agents itself.

After more than a decade in an anti-establishment position, Landlord Action has now become part of the establishment. The founder Paul Shamplina says: The internet is now full of Landlord Action copycats that appear to offer the same service – but are not the same dedicated eviction specialists. We realise that our original idea has spawned an entire internet industry that now endangers the very landlords and agents we set out to protect.

Back in 1999, a group of landlords decided to set up an eviction service as alternative to using a solicitor. Under written advice from a QC, they set up the UK’s first specialist service.

Landlord Action was revolutionary. It redefined the legal eviction process by naming it as The Three Steps. And it charged fixed fees. Its position was as clear as its leaflet: We’re not like lawyers. Our fees are fixed. And we talk plain English. Landlords and agents across the country were clearly pleased with the offering. Landlord Action has acted in over 25,000 eviction cases.

As the buy-to-let industry grew, an eviction industry sprang up – all following the Landlord Action model. The internet created fertile ground for a whole raft of copycat services. These have tried to use the same language and offer the same fixed-fee structure. The difference is not all these services actually use legally qualified personnel to do the work. Some are just a lone operator with a mobile phone. By getting the landlord to issue at court, they don’t carry any responsibility and can leave the agent and landlord exposed when things goes wrong.

From the start, Landlord Action always used external solicitors to review every case, issue at court and brief advocates. And they have always used advocates at court. Over the years, they used a panel of solicitors firms that, for the most part, have served their landlords and letting agents well but ultimately Landlord Action did not have overall control over what was going on.

In 2012, in order to improve standards and provide a better service, Landlord Action decided to bring solicitors in-house and a new Legal Director was appointed. Justin Selig, a solicitor of 20 years, is also a very experienced landlord with a mixed residential and commercial portfolio. He recruited a whole new legal team of experts in this specific area of law and Landlord Action became even sharper. A team of legal minds with landlord thinking.

Now Landlord Action has acquired the status of a law firm. It still only specialises in Housing Law. And it still only represents landlords and agents – never tenants. Its new position is a recognition of its expertise and will clearly differentiate it from those internet services that have tried to copy it.

Landlord Action founder, Paul Shamplina, summed up the latest position very clearly: “We set out to protect landlords and agents. But we ended up creating a whole sector that doesn’t care enough. We’re part of the letting community and we’re dedicated to providing landlord and agents a high quality specialist service dedicated to their specific needs. Whatever we can do to improve that, we will.”

Eviction – Beat the Xmas rush Landlord Action, Latest Articles, Tenant Eviction, UK Property Forum for Buy to Let Landlords

Eviction – Beat the Xmas rush and get possession for January letting.

Planning for Christmas in October?

No we haven’t taken leave of our senses. If you really want vacant possession for January (and you need the current tenant out) now is your last chance before Christmas to make it happen. The courts are stuffed full. The usual Christmas Rush is already beginning. You must act before October 15 to have a decent chance of getting a hearing this year.

The overburdened court system is suffering the usual end-of-year delays. And the impact of the new welfare reforms is making hearing dates even later. If you really want vacant possession for the crucial New Year period, you need to act fast and you need to act right now! The next two weeks are critical. And of course your paperwork needs to be 100% accurate and checked to avoid delays and having to restart the whole process.

We have a fantastic advice line for landlords and letting agents and our in-house legal team will soon be able to put you back in control. We do want to wrap it all up for you – before Christmas.

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Specialists in tenant eviction and debt collection. Regulated by The Law Society.

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Eviction by rent increase Latest Articles, UK Property Forum for Buy to Let Landlords

My tenant is still paying rent but not moving out after his 6 month AST had expired . He was given a section 21 notice for that date and was told verbally at the outset that the contract could only be for 6 months, as the property was let, and is let to students (who are waiting to move in ).

He has been offered other properties but says they are not suitable.

I am not going to enforce the section 21 notice to go for accelerated possession.

Can I …..

a) increase his rent whilst waiting for the eviction order to take effect
b) can he continue on the periodic tenancy at a higher rent, or would increasing rent nullify the existing section 21. notice

Thanks

Rick

My landlord thinks I’m a lodger – please help me Latest Articles

I moved into a room 2 years ago in a flat that has 3 other people renting out rooms.

The owners DO NOT live in the flat.

I recently lost my job and have become past due on my rent.

In a recent discussion with my landlord regarding the possibility of eviction he told me I’m a lodger and therefore have no rights and he can ask me to leave within seven days and can physically move me out.

My letter of agreement does say between owner and lodger but the owner has never lived in the flat.

Am I a tenant?

Am I entitled to at least 14 days notice even if my letter of agreement says 7 and won’t the owner need to get a court order to take possession?

Nikolas Tzanis

Renting to ‘Council Tenants’ Latest Articles, UK Property Forum for Buy to Let Landlords

Not strictly an accurate title but I have heard novice landlords refer to people on Housing Benefit (provided by the council) as such so many times.

So, should you accept tenants who claim benefits?

No one can make that decision for you – but there are some risks to consider, and precautions you can take.

Financial Security

Although it is a generalisation, many benefit claiming tenants do not have much in the way of assets or financial reserves. This can result in delayed rent, or even non payment of rent if some other financial problem arises. In the longer term, it means that if you need to pursue a claim for damages or missing rent at the end of the tenancy, there is a high chance that you will not be able to enforce the resultant court order. Linked to this, for many tenants, is an irregularity of rent payments. Most tenancy agreements reserve rent monthly in advance. Housing Benefit (LHA) is paid 4 weekly in arrears (fortnightly in some areas). This means that the dates rarely match up (monthly rent, 4 weekly LHA) and the amounts for a single payment never match up (annual rent/12, annual LHA/13). For tenants who rely solely on LHA for their rent payment this will also mean that rent is always paid late.

Example:

Rent: £500pm (£6k pa)
1st July £500 rent due £500 owed
29th July £461.54 housing benefit received £38.46 owed
1st August £500 rent due £538.46 owed
26th August £461.54 housing benefit received £76.92 owed
1st September £500 rent due £576.92 owed
23rd September £461.54 housing benefit received £115.38 owed
1st October £500 rent due £615.38 owed

Providing your tenant is entitled to sufficient housing allowance to cover their entire rent (as above) the 13 LHA payments over a 12 month period will equal the 12 rent payments.

You may be asked by your tenant to change your tenancy agreement to 13 x 4 weekly rent periods a year in an attempt to match up rent due and benefits paid. Do not do this – If you needed to evict due to unpaid rent a 4 weekly rent period would prevent you using the mandatory ground 8 in section 8 of the 1988 Housing Act.

Many providers of landlord insurance will charge an additional amount if you let to benefits claimants. If you let to benefits claimants whilst paying for non-claimants then your insurance is likely to be invalid.

Your lender may have limitations on what type of tenants you can let to.

Your tenants benefit may be stopped.

If the council decide to stop paying housing benefit to your tenant, or their situation changes and they are entitled to less, they may not be able to pay their rent. Receipt of Housing Benefit is NOT guaranteed.

What can I do to protect myself?

The first thing to do is to NOT forget to carry out full referencing and credit checks on your tenants. This is likely to show if your tenant has previously defaulted on rent, or any other recorded debt. If you do these checks yourself, it is worth questioning the ‘last but one’ landlord. The current landlord may have a vested interest in giving a good reference to get rid of non-paying tenants.

A deposit is essential in all cases. As your tenant is on benefits, they are unlikely to have a large amount available for a deposit – and yet their lack of assets is the very reason you need as large a deposit as possible. It is probably cheaper to wait for a tenant with a suitable deposit than run the risk of a tenant running up a large rent debt, and not being able to obtain a penny through the courts.

A guarantor is also highly advisable. The guarantor will be expected to cover any bills that the tenant cannot pay. In view of this, your tenants’ guarantor should be a creditworthy homeowner, preferably working full time. The guarantor should be credit checked. If the guarantor is a homeowner, they are less likely to move – making them easier to find – and they have an asset that you can place a charge on if a court order is made against them.

Guarantees are very difficult to enforce and it is important to ensure that the document is legally binding. As a rule of thumb, a guarantee that is not witnessed and executed as a deed will not be enforceable in court. This is one area where DIY or unsubstantiated internet forms are best avoided – the cost of purchasing a professionally worded deed of guarantee is minimal compared with the potential consequences of having a guarantee that cannot be enforced.

Obtain written permission from the tenant to discuss their Housing Benefit claim with the council and make sure your tenancy agreement specifically states that you can use grounds 8, 10 & 11 from schedule 2 of the 1988 Housing Act. If it doesn’t, you will not be able to gain possession before the end of the fixed term even if your tenant owes many months’ worth of rent. I would also suggest that the initial tenancy agreement is only 6 months (not 12) to give you access to section 21 earlier, and (although I dislike the idea) it may be wise to serve a section 21(1)(b) notice as soon as the deposit regulations have been complied with. Doing this means that once the tenant is in a statutory periodic tenancy you can get guaranteed possession date within around 6-8 weeks of the first hiccough in payments whereas with section 8 you ideally need to wait until the tenant owes 2 months rent and you have to give a further 14 days notice, so that means you can commence possession proceedings at least 6 weeks earlier and probably get eviction 2 months earlier.

If it is too early to apply to the Courts for possession under section 21, as soon as the tenant is even a few pounds behind on their rent, serve a section 8 notice under ground 10. You don’t have to follow it through to the court process but this simple action will demonstrate to the tenant that their omission could have serious consequences and, if they have been good tenants, hopefully jolt them back on track.

And finally, as soon as the tenant misses a rent payment, notify the council of the fact and request that their payments are made directly to you in future. Some councils will do this, however all councils are obliged to do this once the tenant has a minimum of 8 weeks rent unpaid.

Tenant Referencing Using Common Sense Advice, Latest Articles, Property Investment Strategies, The GOOD Landlords Campaign

Common sense tenant referencing was pretty much the only option available when I first became a landlord and started letting property in the late 1980’s.

In this article I am going to explain what my family do to find the next perfect tenant, right from the day an existing tenant let’s us know that they want to move out. More often than not these days, tenants think they can serve notice with just a phone call, email, facebook or text message – more about that later. Continue reading Tenant Referencing Using Common Sense →

How long does it take for a tenant eviction? Advice, Guest Articles, Guest Columns, Landlord Action, Latest Articles, UK Property Forum for Buy to Let Landlords

This all depends on how obstinate your tenant is, at Landlord Action 61% of the time, when we serve a Section 8 Notice for rent arrears (14 day notice) or section 21 Notice (2 month’s notice) ending the tenancy, the tenants will vacate the property.

If they ignore the notice served, then the landlord will have to apply to the court for a possession order.

It will take generally between 6-8 weeks for the judge to grant a possession order under section 8/section 21.

Tenants can ignore the possession order granted by the court, which is normally a 14 day order and sometimes tenants are told to stay put by the council and encourage the landlord to go to eviction. In these cases the landlord has to go to the final step 3 to apply for an eviction date with the bailiff, this can take between 5-10 weeks, depending on the court your at and how many bailiffs there are at that court working.

So generally from first serving the eviction notice, to going to court obtaining a possession order, then apply for an eviction date, it can take up to 5 months if undefended case.

EDITORS NOTE

Our sister website http://evicting-tenants.net/ is sponsored by Landlord Action and The Sheriffs Office and provides simple guides to the eviction process. For details please CLICK HERE

	Retaliatory eviction – possibility of civil litigation? Read this discussion
	My landlord thinks I’m a lodger – please help me Read this discussion
	Ex-girlfriend refusing to move out Read this discussion
	I have been asked for a 12 months rent in advance Read this discussion

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