UK Landlord Forum / Life

Hi there

We are renting our house for the first time and we are in the process of referencing our chosen tenant.  Our tenant is supported by his employer who will fund the rent (he is in the country for 3 years) but this has thrown a lot of questions at our end.  As we are newbies, we are discovering as we go along what might a corporate tenant be!

We have now received a written offer from his agents who help him relocate (agents paid by his employer I guess) and one of the terms of their offer is "Keep the lease with a max of 5% linked to official RPI on lease renewals".  We are not wanting to use tenants as cash cows but we were wondering if this term in a written offer is current practice.  RPI being so low at the moment, we are not sure it is relevant to the rental market!  Are rents event part of the RPI calculations?   Can tenants decide beforehand how much the rent is going to be increased by ?

Basically our question is how do you set up rent increases? What is a fair yearly increase? Is this term in an offer as starting point in negociations or is it a deal breaker when dealing with that kind of tenant?

We are not using an agency for managing our property, we only used a tenant find online agency and that was excellent value for money.  We will probably use a (very expensive!) solicitor to draft the tenancy contract because we feel we are out of our depth with dealing with a company agency rather than directly with an individual.  If any of you has experience of this situation we would be really grateful to hear about it so to avoid common pitfalls!

Best

I don't bother.

If you get the rent for three years you are on a blinder of a deal.

if you can add 5% at some point, bonus, dont try arguing with a corporates legal team, just bend over and be grateful.

IMO.

I raise rents by a modest amount every year like clockwork. This stops the situation arising where a big rise is needed one year... no-one likes that. I used to try to justify the rise by linking to some commonly available measure, that being inflation. Now I don't bother, I just set a level like £20 per month and enforce it.

Be careful when letting to a company, it will be a non-Housing Acts agreement... slightly different.

Seems, to me, you're paying out a lot or preparing to. The Agent should have provided an appropriate agreement... mine did when I let to a company. Maybe that's the online aspect?

If you're getting a decent rent at the moment then go with the flow.If you can capture a tenant for 3 years it's worth it as void periods between tenants is money down the drain and possible redecoration easch time.

Yes, that's correct as posted by Hippogriff
If you let to a company, they are not protected by the Tenant and Landlord Act.  Good advice that you shouldn't ignore.  They won't have an ordinary AST and you won't need to serve notice etc. 

Natjojo
You should grab the chance of 3 years rent assuming of course it's a decent sized company... Etc
I had a friend who was half way down this path and then worked out the "company" was just a shell with little in it other an office and a fax machine.

You do raise a good point about RPI ...there are literally dozens and dozens of RPI and CPI meausures produced by the ONS (office of national statistics)... Just make sure it's clear which one you are using but the lock in of three years rent is worth more and the RPI increase.

You should really focus your energies on the peripheral clauses in the agreement, things like professional clean when vacating or How much they will pay if they leave early (is there a break clause?), what if they want to extend etc.. Corps can usually agree to more in these areas than individuals and are more likely to carry out their obligations. 

Best of luck

Quote from: Jewels on September 22, 2015, 08:34:09 PM
Yes, that's correct as posted by Hippogriff
If you let to a company, they are not protected by the Tenant and Landlord Act.  Good advice that you shouldn't ignore.  They won't have an ordinary AST and you won't need to serve notice etc.

mmm, not quite.

If the tenant is the occupiers employer, not the occupier himself, then. . .

The tenancy will not be governed by the 1988 Housing Act (the 1985 and 1987 Landlord & Tenant Acts do apply).
they won't have an AST at all and you DO need to serve notice, indeed eviction is usually more complex and the availability of free reliable advice online is just about zero.

Snorkerz
Jewels is right and wrong about the notice depending on what she meant.  You dont need to serve a notice at the end of the tenancy as it doesn't roll, but you do serve a notice if you want to evict them early for any reason.

Although whilst the acts you mention do apply I believe it is the Protection from Eviction Act 1977 (section 5 if I recall correctly) that is most pertinent to whether or not a notice needs to be served (which of course it does for early eviction) if not an AST.  I almost had to do it but never did so cannot comment on how easy it is to do (and likely the law has moved on).

Having said that it all really depends (as you indicated) on the contracting/commerical terms and how the overall structured...have the company as guarantor and life is potentially simpler (depends on what did the original post mean Our tenant is supported by his employer who will fund the rent)

Are you a lawyer by any chance?