Transfer of Tenancy agreement

by Readers Question

3 years ago

Transfer of Tenancy agreement

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Transfer of Tenancy agreement

I am buying a flat from my parents. It has a tenant who has been there for around 5 years. I would like the tenant to stay but am a little unsure how I go about the transfer of the contract from my father to me, and who does it? Transfer of Tenancy agreement

My father used an agency to introduce the tenant but not to manage the property. That agency set up the tenancy agreement which was a 6 month contract and is now on a rolling monthly basis. The tenant’s deposit sits with a 3rd party, arranged for by this agency.

It is my first BTL property so am inexperienced at this.

Any help anybody could give would be very much appreciated.

Regards

Simon (AKA “First Time Buyer”)



Comments

Mark Alexander

3 years ago

Hi Simon

Ideally, you need a specialist BTL conveyancing solicitor to deal with all the legalities for you.

See >>> http://buytoletconveyancing.co.uk/buying-a-tenanted-property/
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sarah hill

3 years ago

Assuming you are using a solicitor/conveyancer for transfer from your parents, I would get them to have a quick look. In most cases, transfer will be with the benefit of the existing tenancy agreement and all you would need would be a rent authority letter from the transferor/your parent addressed to the tenant to tell them to pay the rent to you. TBH it should be quite straightforward.

Mark Alexander

3 years ago

I disagree, many regular solicitors overlook vital points such as advice regarding the deposit and other compliance matters.

Gary Nock

3 years ago

I agree with Mark. A specialist BTL solicitor will sort all this out. To be honest the best thing to do is create a complete new tenancy in the new landlords name. It stops any issues occurring if you need to gain possession and gives you ateast 6 months uninteruppted rent. Whereas at the moment you could be left without one after a month of completion. I spend a lot of time and effort tidying up after conveyancers who just complete the purchase and leave the new landlord vulnerable.

Mark Alexander

3 years ago

Reply to the comment left by "Gary Nock" at "14/05/2015 - 15:29":

Hi Gary

Yes I've also had to help more than a few landlords tidy up the mess left by a solicitor who does nothing more than he/she would do for a sale/purchase transaction with vacant possession.

As this is a transaction between family member HMRC may also question whether the property is being transferred at true market value. There are also SDLT and CGT issues to consider.

Regarding the tenancy and deposit, if the tenant is happy with a new AST then I agree that's a far cleaner way to do things.

At the very least, either the buyer or the seller should use a specialist BTL conveyancing solicitor, ideally both should. Problem is, I only know of one such solicitors practice and I very much doubt they can act for other purchaser and vendor due to conflicts of interest. Wouldn't hurt for Simon or his father to ask though, they may well know another specialist firm if they can't act for both sides.
.

wayne carson

3 years ago

I think what the question is about is in relation to the tenancy agreement. Speak to your relevant deposit scheme to make sure you tick the boxes and get responses in writing. In relation to the actual tenancy it's a personal choice. If you have a good tenant and want some reassurance of tenure then get them to sign a new AST with the correct landlord details on it. If you are not too bothered about tying the tenant into another fixed term then simply serve a section 47/48 notice (very simple document) that lists you as the landlord and a new address for service. Many agents will encourage you to sign a new tenancy agreement, it is a cash generator for them. Reality is you don't need one you simply need to tweek the facts of the existing one as i suggested above. saves money. If you want to put up the rent then a new AST will be required unless they agree and then a section 13 notice can be issued.
I agree though with the transfer of ownership between you and your father comments by Mark, there are a lot of potholes. Mind you conveyencers and solicitors alike can be hit and miss in terms of levels of service, so ask for referrals from like minded people/investors. In particular watch the HMRC. You don't really need them to interfere with the tenancy though. Often in my experience they mess them up as they don't actually deal in this field.

Soraya Crowley

3 years ago

Hello Simon,

My hubby and I have just gone through this exact same process, with the exception that we didn't buy from a family member. We bought with tenants in situ who were just two months into a 12 month tenancy agreement that was being fully managed by a letting agent. We made it clear to all parties right from the early stages of the purchase process, that we intended to manage the tenancy ourselves. The finer details of transferring the tenancy agreement and deposit were not well catered for by our solicitor and as Mark says, it was treated like a normal purchase transaction, rather than a BTL with tenants in situ. In the end our solicitor advised that we simply 'inherit' the existing tenancy agreement and legally become 'Successor's in Title' to it. The transfer of the deposit has been a very frustrating process. It was registered with a tenancy deposit scheme by the letting agent so it was correctly protected and the funds were in the agents account. We had to provide proof of purchase, proof of registration with a deposit scheme and also the agent asked for the tenants to sign a disclaimer. We have now provided all of that information and have been advised that the deposit funds will be transferred to us within 3-5 working days. Given that we completed on 9th April, I can't believe its taken this long. In hindsight, I wish our solicitor had simply advised us to start afresh with a whole new agreement. Luckily, we quickly established good communication with our tenants and their trust and co-operation has helped things along enormously. They were very unhappy with the letting agent and I think they are just relieved to have helpful and responsive landlords in place.

So, in short, my advice would be to start a new tenancy agreement, get that deposit transfer process started and talk to your tenants to gain their trust in what can be a very unsettling time for them.

Hope this helps.

Soraya

Gary Nock

3 years ago

To be fair, "normal" conveyancers do not understand the tenancy process. Far better is to work with the conveyancer and to draw up a new tenancy conditional upon completion. It is not a matter of making money. It is about the agent protecting the landlords interests. That's what they pay you for.


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