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Stuart J
Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 22517
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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I am a landlord of a 4 bedroom house in Southampton. The

Customer Question

I am a landlord of a 4 bedroom house in Southampton. The Agent has drawn up a lease for me to sign for the new tenant which is a non housing act tenancy agreement. I am used to my tenants having an AST, so am not sure what my obligations are to the tenant in the event the rent is not paid on time. He has failed referencing, is unable to produce a guarantor, and is therefore proposing payments of the £1250pcm rent in 3-monthly instalments in advance. After 6 months he may be looking to provide references, and revert to payment monthly in advance. The lease will be for 21 months. I am not sure whether or not to go ahead, but the alternative is that the house remains empty. What are the ramifications of my signing this lease? How easily can I get possession if during the tenancy, the rent is not paid? Thank you in anticipation for your help.
JA: Because laws vary from place to place, can you tell me what state the property is in? When we are ready I'll take you to the appropriate web page. Has anything been filed or reported?
Customer: Michael Harcourt
JA: Anything else you want the lawyer to know before I connect you?
Customer: Not really. I am a little concerned if I let this tenant in, if he doesn't pay the rent or look after the house, I am unable to gain possession
Submitted: 5 months ago.
Category: UK Property Law
Expert:  Stuart J replied 5 months ago.

Good morning. Thank you for the question. It is my pleasure to assist you with this.

I need some more information from you please. Do you have a mortgage on the property? Why is the agent suggesting that this is done on a different type of tenancy agreement than an AST.

Customer: replied 5 months ago.
there is a mortgage. I am currently remortgaging the property.
The agent is suggesting that the tenancy is different because some aspects fall outside their best advice or terms of business in that the proposed tenant has failed referencing and is unable to provide a guarantor. It seems he rents properties, and then relets them to companies in the area for their staff occupation. Apparently he has many properties like this, and has exceeded his credit limit with the search company the Agents use. Therefore he is proposing to pay 3 months rent in advance, for the first 6 months, and then revert to paying monthly for the remainder of the 21 month tenancy. As the Agents have been unable to find another tenant, I am reluctant to lose the opportunity here, but I am concerned that in view of his dubious credit reference, if he fails to pay the rent, I am unable to regain possession in a reasonable period of time.
Customer: replied 5 months ago.
The Agent says it is because it is a company taking the tenancy that it is a non housing act tenancy
Expert:  Stuart J replied 5 months ago.

In all honesty, I cannot see what difference failing credit references or not being able to provide a guarantor makes. If he doesn’t pay rent, he doesn’t pay rent! The type of tenancy is not really relevant as to whether he will pay rent or not but it does make it more difficult to get him out if it is not an AST.

I think there are 2 issues here. Firstly, the fact that he may be subletting not only subletting but subletting to a company for staff but also you will be in breach of your mortgage conditions unless your lender agrees to this type of tenancy agreement. It is unlikely they will allow you to let the property on anything other than a AST.

So the first thing you need to do is get consent from your lender to the different kind of tenancy agreement and they will want a copy of the agreement. I think they’re unlikely to agree to it.

If they do agree, and the tenant subsequently fails to pay rent, you are then faced with making a bespoke application for possession, without using the section 21 or section 8 process. You can still get them out, it’s just a much more convoluted process.

I would get an agreement from the agents they will pay the cost of removing the tenant if the tenant fails to pay rent.

Can I answer any specific points arising from this?

Please do not forget to use the rating service to rate my answer positively. If you don’t rate it positively I don’t get paid.

You may get the impression that the thread closes after rating, but it does not, it remains open and we can still exchange emails if anything needs clarification.

Kind regards.

Stuart

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