What happens to the subtenants when my contract with the housing association ends?

What happens to the subtenants when my contract with the housing association ends?

9:20 AM, 24th April 2024, About 2 months ago 5

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Hi, I bought a 5-flat property last year and it’s being sublet and managed by a housing association (this was the case before I bought it too). The housing association has a secure tenancy with the subtenants.

We gave the housing association their 10-month notice and they are due to finish their contract this November.

The subtenants are getting rent for around £200 below the market rate, it’s in the contract that I cannot increase it and the housing association themselves have also refused to increase it.

The subtenants only have a tenancy agreement with the housing association, not with me. It’s only the housing association that I’m in contact with. I’m not even aware of the subtenant’s names.

Basically, my question is what happens when my contract with the housing association ends in regards to the sub-tenants? Will their tenancy rollover with me or will their tenancy also end upon the housing association’s contract ending?

Thank you!

Dilpreet


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Comments

Rupert Chapman

10:10 AM, 24th April 2024, About 2 months ago

Very important question for all that are seduced by guaranteed rent offers. There is a growing trend of landlords signing their assets over to third party operators and I suspect this is set to continue.

The answer, partly lies in the document you signed before handing over the keys.

It is important that any contract stipulates the requirement for the third party operator to return the property with vacant possession.

However, it is also important to recognise the process involved in gaining vacant possession and note that timescales to achieve vacant possession can exceed the notice period.

If the contract is not possible to be performed, then it could be deemed unfair terms or frustrated.

A well worded contract would give the operator reasonable time to achieve vacant possession or have some provision in the event that the contract terminates without vacant possession, such as a lump some payment or an increased rent after a reasonable time (e.g.12 months)

One further problem is that the tenants may have been housed on a short term licensed arrangement but gained statutory AST status through the substance of the arrangements. In such instances, the tenancy compliance documentation is likely to be incomplete and eviction could be delayed further as a result.

In my groups, I caution those entering such arrangements to fully understand who the end occupier will be, whether circumstances outside your control will breach your mortgage or insurance terms and to recognise that a signed piece of paper is no more than a signed pice of paper. Enforcing the contents of the piece of paper is a different ballgame!

Robert M

11:55 AM, 24th April 2024, About 2 months ago

As Rupert has said, the situation should have been discussed and negotiated prior to entering into the lease arrangement with the housing association, and the agreed terms should be stated in the lease document that you signed (or the previous owner signed, but you have taken on).

Generally speaking, there should be provision within the lease terms for the HA to hand back the property to you with vacant possession (after the agreed notice period), and if they fail to do so then what happens in this situation (e.g. continuation with a rent increase, or compensation for breach, or transfer of tenancies to you, etc).

As the first thing to do, to find out the answer to your question, you need to look at all the paperwork, particularly the lease to the HA, but also the conveyancing paperwork where such questions should also have been asked by you and your solicitor and answered by the seller via their solicitor.

Simon F

15:14 PM, 24th April 2024, About 2 months ago

I've sold with tenants in situ, and it was simply that the new owner becomes the party responsible for fulfilling the agreement. So, I would say the default is that on HA's surrender of the lease, the sub-tenants all become your direct tenants on the HA terms. Unless there's something else explicitly dealing with is the sub-tenants agreements. Your solicitor did a crap job not explaining this properly to you when you bought it.

Michael Booth

16:56 PM, 24th April 2024, About 2 months ago

Before entering into these agreement take the appropriate legal advice and make sure the tenants are the responsibility of the ha on surrender of all relevant docs stops all this nonesense if ha won't agree don't sign it simple.

DPT

17:15 PM, 24th April 2024, About 2 months ago

From what you say, my understanding is that when your tenancy with the housing association ends, you will inherit the occupants as your direct tenants. You need to get proper legal advice on your options from a specialist landlord and tenant solicitor.

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