UK Landlord Forum / Life

Hi I am about to become, what I call an accidental landlord as I couldn't sell my house on time and need to move into another house which I liked and agreed purchase. So the choice is ride the wave and take risk and see what happens, worst case sell.

I advertised my property, I get lot of request from those who are on Universal Credit (UC) and also from known people who refers to me (hopefully trustworthy) tenant who are on universal credit.  I understand this used to be called DSS, after researching a bit, and also see there is always this question or let's say doubt, should you be renting to someone from UC. I have few question, and need some answer or you can call it experience advice to give me some confidence, as I am S#*# scared of being a new Landlord.but hoping it works out well.



1. If I know a person who is on housing Benefit, and trustworthy person, should I be going ahead.  What are the pros and cons in this area.

Do I need to get any license, register with DWP! Is DWP going to be on my case!! Is this an issue when it comes to landlord wants to move in ir sale, tenant doesn't want to leave or let's say don't pay. How to safeguard myself and cover myself, both by contract paper articulation, and insurance ?

It is important because I will be reliant on rental income.

2. For any contract, either to a salaried, openrent tenant checked person, or Direct someone who is on UC, in writing the contract, can there be a clause that landlord has the right to increase or review rent after certain years?

3. What registration I need to do as landlord?

4. Insurance - Do I need it? And what are those?

5. Deposit outside the DPS, if I don't trust, which takes time to built, can I ask for like 2/3 months rent? Mutually agreed as direct deposit, and months rent to start moving.

This is so, there is a cushion.

6. Do I need to provide fire extinguisher blanket? Anything else apart from gas and elec and EPC cert

7. 1 year Contract or 6 months? And then rolling.


8. Can I ask a reference passed potential tenant to pay into two accounts - this is because the house belongs to 60/40 wife and husband.

9. This is important, I am scared but not to tell lie, because I am unable to sell due to the time, I.e. like something that what we family need, and not being able to lessen the monthly mortgage, I will be depending on the rental income of the current property for paying part of mortgage on future one. Is it worth it! Bit of a cold feet question.


Apologies for the long list! I would really appreciate clear Lehman's explanation and responses.

Thank you

1 - Never rent to someone you know. In your case, don't rent to anyone on benefits.
2 - Don't have that clause, it's not helpful. Offer a six month contract which then goes periodic. The government is about to introduce a law that makes rent increase clauses invalid.
3 - None
4 - You don't have to have insurance, legally, but you should have it.
5 - You have to protect any deposit with one of the three approved companies. You don't have a choice. You can ask for multiple months rent in advance, but it has to be real rent in advance for months that you agree. It can't be a deposit in disguise.
6 - No, you need smoke alarms on all stories used as living spaces.
7 - Six.
8 - Both of you would have to be joint landlords to do that. It is, however, a stupid arrangement and the tenant would be advised to say no. It looks like tax fraud, it isn't easy for the tenant to show that they've paid the rent and it makes the situation really complicated if anything goes wrong.
9. No. Don't ever become a landlord unless you want to.

While I absolutely understand that you are just asking questions, and those might be questions that have just come to mind. It does read as if you would absolutely love to start down this path with a somewhat dodgy approach. That wouldn't bode well.

Not trusting a Deposit protection scheme sounds like a brilliant excuse for not using them. I have decided I don't trust them now, either. My advice would be quite simple - find our your obligations (a good start made here) and then just fulfill them instead of thinking of nefarious means to get around them. In short, put your efforts into what matters.

And, finally, there are no accidental Landlords, zero. Every Landlord that exists made a choice, just as you are going to. That term is just used willy-nilly by unprofessional Landlords as an excuse for them being... unprofessional. What you mean is - your heart is not in it.

Taking that into account - my answer to the title of your post is: not.

@Soul_flyr

Read this https://www.gov.uk/renting-out-a-property. Understand your obligations and, if you choose to go ahead, follow them to the letter.

I really do not think you should do this. For too many reasons to list I think you could end up in trouble and regretting it. So it's a No from me. 

Hi all,

Thanks for all the advice and taking your time. @jpkeates, thanks for constructive breakdown, suggestion, critic and advice.

I am not someone dodgy, my situation, calculations, made my decision on whether sell or let based on various circumstances, place, time, future and now decided to Let.

Now, to the let part, like to see the best of people. Can't help surrounded by some who are on UC, known people for a while without judging or asking how or what, never needed! But when word spread some approached, and being on payee all my life, I had doubts. Like how does their affordability passes, swing family member number naturally I ask why this person working but not that one!!. And because I had that doubt, hence joined and asked what ifs! firstly have no clue how UC works and Works for the people I was referred, and asking the bitter questions I can see the hide and seek nature. I have always been a payee, so assessing someone on UC or self-employed with Creative tax calculations are not my expertise.

Over last few days came across people who I can trust, I know they have the right attitude and habits to keep place nice and tidy and well maintained, but I know even if they can afford, and will pay without fulfilling their full needs, for me it's about if they struggle, I will struggle and start of problem. Then some can afford but know for fact, your house will not be looked after. Then again, it's a choice to rent, and then it becomes an income, and a business. So emotion shouldn't be there. So thanks, but no thanks. The. Insurance will go up too!

Considering all, I have found a professional tenant that I myself can vet because I can see and recognise in LinkedIn. You can say that's my own way of vetting, right or wrong, future will say.... 

Albeit, All things are considered in terms of referencing process using online portals. Hopefully if all goes well I will rent it out.fingers crossed tenant doesn't loose job! Or turn out to be a problem.

I agree with @Hippo that's my choice- no accidental landlord. My house is something I maintained to its best quality, a family nest for us. And when started thought of renting out, heard lot of horror story of court cases, no rent, etc from people who are on UC, and people who are at. Feels like everyone has a story to tell!!. It felt like, open the door for fox to enter and say, please don't eat the chicken (I.e. do pay on time and when asked to leave for genuine reasons, with due process, do leave), same time say, it's okay if you eat it ( as the citizens advice says, Don't worry, landlord cannot evict you if you don't pay!)

I can see the challenges around finding a good tenant and it's not easy, but I do believe as Individual, that do the best, hope for the best. Take care of your tenant and hopefully it will take care of you.Least that's what I did when I was a tenant..

About the tax thing, to whom it might came across dodgy, my fault. I should have explained better. Our deed is divided therefore thought does this needs to divided too, but I get it, explained very well by JPkeates, And also about DPS, that question wasn't about excuse, it was about assurance, and further research - I found one can do Assured DPS for a cost. Maybe came across wrong or else someone with experience would have pointed that out. I would go for that. And about accidental landlord, yes #Hippo... is right, no one accidentally becomes a landlord. Heard the term, used it literally. It's a choice. Important take is heart must be in it to ensure take good care and serve tenant well. Btw my house is already have the safe system. Even when refurbed changed all doors to fire doors for young family safety consideration, all along though that was an overkill, which I guess was, but comes handy, maybe Apply for HMO!, joking- not my plate.

Let's face it, one fixes a mortgage for stability and continuity, rent is not dissimilar for a tenant. Before my first house, when I was renting, had rent go up every year, with some brilliant excuses by estate agents and landlords with big portfolios. It might feel bad to some, but the truth is some dodgy and greedy landlords, with multiple portfolio, indeed ruined the market for many. And not all encourages others in a right way, some does. Let's face it, not all are saints... Same time there are tenants who are rubbish, and takes advantage. 

To All, thanks. Bitter but honest. And that's what I needed. 🫡🫡

I must comment - even at this hour - that this sounds like Saturday-night-(early Sunday morning)-drunk writing... or mania.

This is like a stream of consciousness. I get the impression that you are a very emotional person, maybe inclined to overthink and ruminate.  Yet another reason to drop the whole idea of being a landlord. It is not for everyone,  so don't feel you have failed, you are doing yourself a big favour I promise you. Good luck.   

Thanks for the sage advice, much appreciated. Rented already. My choice, my gamble! Let's see if this ship sails or sinks!

Let already.

Renting is what you would do.

Quote from: Soul_flyr on November 24, 2024, 12:50:43 AMBitter but honest. And that's what I needed.

And which I will ignore, as I always planned to... because, really, I was only coming here for validation of, or congratulations for, my already-decided action plan, not this troublesome thoughtful, and overly-negative, advice. 

Was this a joke?  You post a very long list of questions which people on here have tried to deal with ( free of charge in their own time)  Nothing you said suggested that you have already become a landlord,  so what was the point? Are you a troll of some kind?

I'm more and more happy that I am no longer a landlord, so that people won't confuse me with moron's like this.

That is assuming that he is or ever has been a landlord jpk.

That is true. I shall recover my composure.

I did write a rather long reply explaining why you would be hopeless, in the end I though you were not worth the time.

What a complete fool, not even a troll, just a fool.

Quote from: Soul_flyr on November 25, 2024, 06:29:29 PMThanks for the sage advice, much appreciated. Rented already. My choice, my gamble! Let's see if this ship sails or sinks!

Quote from: jpkeates on November 19, 2024, 12:41:33 PM5 - You have to protect any deposit with one of the three approved companies. You don't have a choice. You can ask for multiple months rent in advance, but it has to be real rent in advance for months that you agree. It can't be a deposit in disguise.

If you let your property (usually fully furnished) to someone whose main home is elsewhere ie someone working away from home, you do not need to register a deposit and most of the Housing Act doesn't apply either.

BUT, it's a very niche market.

That's also not something I'd ever suggest anyone get involved with. I've never met anyone who does that properly.

   

Guy asked for advice on 19th and has let the property by 25th - we all know what that decision will cost him.

Quote from: jpkeates on November 28, 2024, 05:19:33 PMThat's also not something I'd ever suggest anyone get involved with. I've never met anyone who does that properly.

I have 4 units that are working extremely well.

Quote from: South-West on November 28, 2024, 05:21:11 PMI have 4 units that are working extremely well.

Great to know.

There is a business model for high end AirBnB letting but it takes considerable investment to get the big bucks, some of my clients who are working abroad also let on AirBnB a few days a week.

However, to do this just to avoid giving a deposit is absurd, I struggle to understand Landlords who have a problem with putting the deposit in one of the three authorised schemes.

The DPS custodial can be done online, in minutes, MyDeposits create a pre-filled PI document for you and tell you the bits you need to do to make the PI valid. TDS are not bad either.

On top of this you get a free ADS service that saves you risk of going to Court for damages, the value of this should not be underestimated even if all of the deposit is used and more is owed by a Tenant that trashes a property.  A Judge is going to look at that ADR outcome and is unlikely to go against it, so it gives the LL leverage in negotiation.

Also I would not rely on the wording you used, someone renting a property where they are resident during the week is not really going to be deemed a holiday let unless a lot of admin work is done. Losing the 2 days when they go home for the weekend is not ideal either.  All it would take is one disgruntled Tenant to test this and you could be on the wrong end of legal costs and sanctions.

Just get with the programme, protect the deposit and do the paperwork.

Quote from: South-West on November 28, 2024, 05:14:42 PM

Quote from: jpkeates on November 19, 2024, 12:41:33 PM5 - You have to protect any deposit with one of the three approved companies. You don't have a choice. You can ask for multiple months rent in advance, but it has to be real rent in advance for months that you agree. It can't be a deposit in disguise.

If you let your property (usually fully furnished) to someone whose main home is elsewhere ie someone working away from home, you do not need to register a deposit and most of the Housing Act doesn't apply either.

BUT, it's a very niche market.

People working in the week aren't a holiday let. And I agree that it's safest to follow the AST rules as a belt and braces approach.

The risk with someone staying somewhere more then half a week is that their circumstances can change without the landlord being aware of it and the tenancy could become their main residence.

Those living away from their principal residence for an extended period should not be accommodated on a holiday let.

They need to be on a Contractual Tenancy - "only to be used when the tenancy cannot be an assured shorthold tenancy e.g. letting to a company, not the tenant's only or principal home or rent is in excess of £100k per annum".

There is a Clause within the Contract which requires the Tenant to notify the Landlord should the property become their main/principle residence.

It's all well and good saying every Landlord MUST issue a std AST - but if the Tenant's main residence is elsewhere then your AST will be worthless as such Tenants fall outside of the Housing Act 1988.

https://www.legislation.gov.uk/ukpga/1988/50/section/1



 

Quote from: South-West on November 29, 2024, 03:52:43 PMIt's all well and good saying every Landlord MUST issue a std AST - but if the Tenant's main residence is elsewhere then your AST will be worthless as such Tenants fall outside of the Housing Act 1988.

No one (that I can see) is suggesting that anyone should use a std AST for the kind of arrangement you have described.

It wouldn't be worthless, but it also wouldn't be an AST.

Quote from: jpkeates on November 29, 2024, 03:16:25 PMPeople working in the week aren't a holiday let. And I agree that it's safest to follow the AST rules as a belt and braces approach.

Quote from: David on November 29, 2024, 01:14:06 PMJust get with the programme, protect the deposit and do the paperwork.

Here's two for you, both responding to my Contractual Tenancy scenario.

And it WOULD be worthless as you cannot have an AST in such circumstances - would you fancy going through court with that?

I'm not suggesting using an AST agreement. That would be a) wrong (as you point out) and b) not be helpful if you need to show you weren't intending this to be an Assured Tenancy.

I'm suggesting following the same processes, protecting the deposit, providing the prescribed documentation, doing the EICRs, checking the the smoke alarms day one. That kind of thing. That's why I said "rules" not "agreement".

Your clause about the tenant telling you of a change in circumstances won't help you if the arrangement is ruled to be an assured tenancy.

But it's your business, not mine.

There are no AST "rules" - issues within the Housing Act related to an AST are legal requirements.

Although not required, I do issue the paperwork - the reason is because I already have all that documentation so it's something which is easily sent off via the Signable app, along with the Contract for signing and acknowledgement. Checking linked smoke alarms every month is something I do for my benefit, not just at the start of a Tenancy.

The Deposit does not need to be registered and it would be self-defeating to do so. I would rather have 4 x £500 sat in my bank and under my ultimate control instead of "debating" with a scheme's pen pusher to decide if a tenant was responsible for x, y or z.

The Law states that the Deposit was received when the tenancy was not an AST. The requirements in the Housing Act 2004 relate to a Deposit "received in connection with" an AST. The Deposit was not received in connection with an AST; it was received in connection with a Contractual Tenancy. Therefore, it does not need to be registered or protected and prescribed information is not required.

Also, the amount of the Deposit when received in connection with the Contractual Tenancy was not limited, meaning any amount over the five week (AST) limit is not a prohibited payment under the Tenant Fees Act 2019. I actually charge less than the (AST) five week limit but could ask for £5,000 if I wished.

All that aside, it remains (at present) that a Contractual Tenancy can be ended by the Landlord (simply using a valid Breach of Contract) far easier than an AST and there is no defence available to the Tenant.

As I said many posts ago, the market I am in is very niche and nobody should contemplate using a Contractual Tenancy if they aren't 110% legit with it.

BUT don't automatically dismiss it as "wrong".
 

Quote from: South-West on November 30, 2024, 10:16:04 AMThere are no AST "rules" - issues within the Housing Act related to an AST are legal requirements.

But, as these tenancies are outside that act, the legal requirements for AST don't apply. I called them rules, perhaps practices associated with an AST would be better, if longer.

QuoteThe Law states that the Deposit was received when the tenancy was not an AST. The requirements in the Housing Act 2004 relate to a Deposit "received in connection with" an AST. The Deposit was not received in connection with an AST; it was received in connection with a Contractual Tenancy. Therefore, it does not need to be registered or protected and prescribed information is not required.

That is true. But case law (Superstrike) has determined that when a new tenancy, begins the deposit is received again, even if no money actually moves. So, if the tenancy does become an AST, the landlord will "receive" the existing deposit for the purposes of the protection requirement.
There is some debate about when that actually happens in the circumstances we are imagining, so it would be an interesting issue if it arose.

QuoteBUT don't automatically dismiss it as "wrong".

I'm not, and haven't ever suggested anything was "wrong". I have suggested what I think would be a sensible course of action. You are running a successful business from the sound of it and, clearly, know what you're doing.

Is your business specific to the south west? It's not something I come across often in the sort of volume you are servicing.

Yes, at present my business model focusses on major infrastructure (in this instance, the nearby HPC Nuclear Power Station).

It is now running another 5 years behind schedule; so around 15 years in total (and my Tenants feel it will be another 5-7 years from now).

EDF are dragging even more workers to the area (currently 9,000 on site 24/7) and there are NO housing options left for them - HPC already have two huge portacabin-style accommodation blocks, rent a room are now £150+ per week, they have taken over several campsites for workers caravans and are desperate enough to have taken over a Pontins holiday park......and new employees still cannot find digs.

Anyone who has a spare few £££ would do well to buy property suitable as a HMO (even fields to acquire planning for caravans) near the new Nuclear site at Sizewell as they are even more rural than Hinkley Point so demand and rent will be insane. They have already taken over a Pontins site near there in preparation.

It is utter madness around here.

We have large fleets of double-decker coaches going to/from the site running empty 90% of the time just in case a worker needs to use one. Then at key start/end times they are crammed in like sardines on busses which can take 90 minutes each way to work. Though they are getting £20/day allowance to use the bus (they actually have no choice anyway).

Workers receive £300+ PER WEEK tax free lodging allowance while here.

My rents have increased 10% every 6 months over the last 4 years and I believe I could go much higher still.

At some point, I will have to revert to ASTs (there is little to gain from holiday lets now) but for now Contractual Tenancies are the way to go.