Which type of agreement/tenancy do I need?

Which type of agreement/tenancy do I need?

0:02 AM, 29th August 2023, About 8 months ago 12

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Hello, I have a prospective tenant who wants to rent my property. They are actually friends of mine.

They are from Lithuania and have passed all necessary checks. I have only ever let before using Assured Shorthold Tenancies.

However, they have informed me that this will NOT be their main home as this is in Lithuania and they have other properties abroad.

They basically want my property to use as a base when they are in this country.

I’m told a AST is not suitable and to use a Common Law Tenancy?

Can anyone guide me as to what type of tenancy I should use?

Thank you,

John


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Comments

Graham Bowcock

11:55 AM, 29th August 2023, About 8 months ago

This sounds like a very unusual arrangement and one to be wary of. "Friends" make the worst tenants!

It is correct that an AST is designed for a permanent occupier as the tenant's home. However, if you are uncertain about drafting a common law tenancy it is something a lawyer or competent agent should do.

I have been thinking of the clauses I would put in and there's so many things I'd want to include in this case.

As the agreement is unuual, maybe the tenant would pay the legal costs?

Freda Blogs

13:26 PM, 29th August 2023, About 8 months ago

Would they be paying rent even when they're not there?

Would they be entitled to exclusive possession?

Do they think they can sublet and create a rent to rent arrangement?

My mind is going in all sorts of directions, most of which would have adverse ramifications for you as LL.

if they only want to be in UK some of the time, why rent full time, there's hotels and AirBnB for shorter stays.

RoseD

14:48 PM, 29th August 2023, About 8 months ago

The word 'friends' is what concerns me here. The worst type of tenant (in my opinion). If this is a business transaction who has put the theory in your mind this should be anything other than a normal straight forward tenancy like it would be if you letting your property to new tenants. Do yourself a favour....let them rent somewhere else and you let your property to a new tenant who you have no connection with.

Judith Wordsworth

16:16 PM, 29th August 2023, About 8 months ago

Doesn't have to be their main property for you to issue an AST. Must be a minimum of 6 months and ALL the correct paperwork in place and delivered and receipted.

If they are not staying in the property for more than 28 days at a time then you could do it as a holiday rental and they have no rights to stay more than each period that is agreed to. You would be liable for ALL utilities (which you recharge either at cost or whatever you want) and would have to likely get the property business rated and insured as a holiday let.

Would they be paying for times when they are not in residence? If so, then unlikely you could rent out as a holiday let.

If not, then you could let to other people BUT your friends couldn't leave any possessions there. Or you could charge a higher "holiday" rental to cover non-use and the standing charges and business rates.

Puzzler

16:20 PM, 29th August 2023, About 8 months ago

You can issue an AST, it just means that some of the tenancy legal protections might not apply. I rented a second home for work on an AST

Russell Cartner

10:37 AM, 30th August 2023, About 8 months ago

Reply to the comment left by Graham Bowcock at 29/08/2023 - 11:55
Please email your local MP & M Gove to say you will not be voting Conservative due to their anti Lanlord policies
michael.gove.mp@parliament.uk

David

12:49 PM, 30th August 2023, About 8 months ago

To be safe you would need to use an AST. Be prepared to lose the friend though.

Graham Bowcock

13:49 PM, 30th August 2023, About 8 months ago

Reply to the comment left by Russell Cartner at 30/08/2023 - 10:37
How would that help the person asking the question?

Graham Bowcock

13:51 PM, 30th August 2023, About 8 months ago

Reply to the comment left by David at 30/08/2023 - 12:49
An AST may not be appropriate. The owner should provide full facts to a legal adviser or experienceed chartered surveyor and get an agreement drawn up reflecting what is going to happen.

Besides the issue with the occupants the owner has to consider mortgage requirements and insurance.

Agree about losing the friend, though!

David

14:27 PM, 30th August 2023, About 8 months ago

Reply to the comment left by Graham Bowcock at 30/08/2023 - 13:51
It's too risky not to use an AST agreement plus all attendant requirements. I'm not clear that a court would automatically consider a non-uk principal address as qualifying for a non-assured tenancy, particularly as time passes and the UK tenancy gets longer. Even if they did, its possible that the tenants circumstances could change. They could lose/sell their foreign residence, or decide the UK move is permanent. At that moment, the status of any common law tenancy would likely change to become an AST.

In any case, the actual tenancy type that an occupant has depends on the circumstances, not the paperwork. Therefore if the tenancy is non-assured due to it not being the tenants principal home, it wouldn't matter that an AST template was used as the facts of the case would still determine the course of action.

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