UK Landlord Forum / Life

I am a new BTL landlord and I am about to complete the sale of a leasehold flat with tenants in situ (cash buyer). The tenants are on a 12 months AST, and have been living in the flat for 4 months by now. They have been paying the rent on time so far. I do not know if there is a break clause in the tenancy agreement. I asked the letting agency to forward the AST so I can check the details. I also asked for the tenants references.  My plan is to keep the tenants in the flat for the entire duration of the AST agreement.

The current landlord has a service agreement with the letting agency to fully manage the flat on his behalf. He pays the agency 10% plus VAT.

I would appreciate your advice on the following matters:

1. Do I need to accept the service agreement of the current/previous landlord. I would prefer to manage the flat by myself, and not pay the 10% management fee. Is this possible?

2. What do I need to do in order to amend the AST so that it shows my name, not the previous landlord name? Will the letting agency take care of this?

3. Am I able to draft a brand new AST, in case the existing one does not have a brake clause in it? Does it make sense to do that on the basis that the tenants will be in the flat for the next 8 months only?

4. Will the letting agent transfer the tenant deposit into my name. I understand that it is registered with the deposit scheme.

5. If I like the tenants, I would like to keep them in the flat for another 12 months, should they decide to stay. My plan is to have a new AST with them. Do I need to go trough the letting agency to draft a brand new AST, or can I buy a standard AST from any high street or on-line shops? My plan is not to use the letting agency for rent collection, or full management.

6. Do I need to buy landlord insurance to cover rent guarantee, legal expenses and owners liability?

Thank you very much.

Quote from: jet_mt1. Do I need to accept the service agreement of the current/previous landlord. I would prefer to manage the flat by myself, and not pay the 10% management fee. Is this possible?

The Letting Agency may not like that one bit... you should really be finding all this out (by talking to the parties involved, I mean) before completion.

Quote from: jet_mt2. What do I need to do in order to amend the AST so that it shows my name, not the previous landlord name? Will the letting agency take care of this?

There is more than just this for you to consider... read up on the Landlord and Tenant Act 1985, section 3 - "Duty to inform tenant of assignment of landlord's interest", and ensure it is complied with.

Quote from: jet_mt3. Am I able to draft a brand new AST, in case the existing one does not have a brake clause in it? Does it make sense to do that on the basis that the tenants will be in the flat for the next 8 months only?

The terms and conditions of the current AST should not change for the current Tenants. They are within their fixed term. A change of Landlord does not mean anything else changes. Also, maybe you shouldn't be drafting an AST with a "brake clause" in it? 

Quote from: jet_mt4. Will the letting agent transfer the tenant deposit into my name. I understand that it is registered with the deposit scheme.

You are ultimately responsible for the deposit, so I would recommend you ensure it is looked after, completely, by you. I'd suggest DPS Custodial unless you have a preference. Instruct the Agent to transfer it across to your Landlord ID, or have the previous owner do that (if they are the one with the relationship).

Quote from: jet_mt5. If I like the tenants, I would like to keep them in the flat for another 12 months, should they decide to stay. My plan is to have a new AST with them. Do I need to go trough the letting agency to draft a brand new AST, or can I buy a standard AST from any high street or on-line shops? My plan is not to use the letting agency for rent collection, or full management.

Tenant are not pets. But, yeah, after the current fixed term has expired you could ask them to sign a new AST - even with a new fixed term, if that's what's agreeable to all parties. Otherwise, the options are to allow the current AST to continue as an SPT or serve notice. I'd say craft your own AST, so you know exactly what's in it - I would not have faith in an off-the-shelf AST bought from W H Smiths... but there are other, better ones.

Quote from: jet_mt6. Do I need to buy landlord insurance to cover rent guarantee, legal expenses and owners liability?

Landlord Insurance is needed, yes... but what that might contain is up to you. I don't go for rent guarantee insurance, for example. Explain what you'd like to a Broker and see what they come back with... that will give you some good choices to start with.

Hippogriff, thank you so much.

Very good answers from Griff.

I'll add my 2p on Q5 though.  To me a periodic tenancy from a LL's point of view has benefits over an AST as it's alot easier to remove the tenants if you have to on a periodic than whilst they are in their AST period.  Downside is your not 'guaranteed' that tenant for a period of time but it's not much of a guarantee that they will continue to pay anyway.

Thank you very much Riptide.