UK Landlord Forum / Life

Small house rented for 5 years to an organisation/charity that homes vulnerable adults.First chap just moved on,and new lady moved in.It has been periodic after the first 6 months AST.

They contacted me via the LA yesterday to say they would prefer to take on a 5 year lease.then sublet to their tenants.I am inclined to snatch their hand off.There have been no real problems so far,and communications with them are very efficient.
The LA advises against,for the reasons that would make perfect sense if this was a new unknown tenant.

It does tie me to the agent sadly.The penalties for breaking with them while a tenant is in situ are eye-wateringly harsh.I have asked for a draft copy of the proposed contract.What are the implications I need to be aware of? Would I need to check with the insurance before entering into a different type of rental arrangement? Any feedback would be most welcome.

It wouldn't be an AST if it was over 3 years.  The 'landlord' would be able to put who they wanted into the house, check your mortgage and insurances as they may not allow this type of arrangement.  What happens with rent increases and repair maintenance issues?

I paid cash,so no mortgage.So far,there has been an annual modest rent increase.I will have to discuss this,and the repairs.It may be that they will take on a fully-repairing lease.I will also need to know that they are not widening the scope of the type of client they house.They do seem to be pretty kosher as far as I can tell.It's not like I'm letting to Oxfam for example.... 

I don't know the answer to all your questions but had a few thoughts:
There are specific guidelines on leasing to a company/organisation so I would search those out eg what would happen if they cease to operate?
How long is your contract with your LA? Surely not 5 yrs? Could you not give notice not to renew your contract with them when next due if you wish to go down the route of the charity subletting - is this similar to the rent to rent type of arrangement?
I also read about drawing up a legally binding addition to the AST or whatever it is you would need with this charity - which allows you to mutually end the contract before the 5 yrs was up without giving reason for an agreed fixed compensation.

I seem to have sold my soul to the agents back in time.If a tenant they find is still living there,I pay something like 3 months rent if I end the arrangement.In this case,the "tenant" remains the same ie.the charity.There may be a way around it,I am trying to gradually regain management of all five properties.Will settle down with a coffee,and check out the possibilities you mention-many thanks.

Quote from: heavykarma on February 20, 2018, 09:22:40 AM
I pay something like 3 months rent if I end the arrangement.

Drop the rent to £10 

If you decide it's best to go with the charity directly (all legalities checked of course), then you may have no choice but to wait until your current tenant leaves - DROP YOUR LA - then start over with the charity?

Thanks Riptide,that would wipe the smirk off their faces!
EPS501-the charity is the current tenant,has been for over 5 years.If I go into the new arrangement with them,the agents will still be able to claim that I continue to benefit from their services.I will have to do some sums,it may be worth biting the bullet and getting shot.That said,the agents are very pro-tenant (really pisses me off) which of course endears then to the charity.They may insist that LA stays in management role.I can't blame them,their brief is to make life as secure as possible for the people they are helping.I'm only human,the thought of another 5 years void -free,guaranteed rent, has me rubbing my greedy little landlord hands with glee. 

Ahh I see.
Your LA has a great income! After such a long relationship, are you able to re-negoiate your contract using the dependable charity tenant as leverage? As it is, they've got a job for life :-) Personally I would cut my losses with the LA and start again :-(

Quote from: heavykarma on February 21, 2018, 10:46:40 AMThat said,the agents are very pro-tenant (really pisses me off) which of course endears then to the charity.

And I would remove myself from that arrangement on that basis alone. You're effectively saying the Agent is a confused entity and doesn't realise who he works for. I've encountered that before. I try to sniff it out in any dealings I have with people but - as I've said many a time - I don't do full management any more. It doesn't make sense for my more hands-on approach. Likewise, just from my own perspective, my experience of letting to a company had pros and cons. I probably wouldn't do it again, myself. I like to deal with the Tenants themselves, and, in that scenario I ended up dealing with some admin. person / people at the organisation. I didn't really know when / if the Tenant whose name was mentioned in the documentation (not my AST, as it was a company let it was a non-Housing Acts agreement) was there - or even someone else. The rent was paid regularly, of course... and the requested deposit deductions (even though I didn't actually need to protect that deposit, I did) at tenancy end were paid without hesitation or question.

I would not want a 5 year agreement with anyone. I reckon I am in this game for the long-haul, but 5 years is too long for me to ensure certainty.

If I was to proceed with something like this I would try to shape things to my (your) liking a bit more.