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Tenant find and collecting rent on behalf of a friend...a definition/problem

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Author Topic: Tenant find and collecting rent on behalf of a friend...a definition/problem  (Read 105 times)
Newbie
Posts: 2

I like property

« on: June 10, 2020, 05:36:02 PM »

Hello Landlord Forum,

Firstly, a huge thank you for making this forum available. It is so useful. I will try not to be a 'one post wonder'. I also couldn't succinctly make a subject line that really asks my question(s) so please forgive if I've got off on the wrong foot.

Let me give you a brief introduction: I am relatively new to the Landlord'ing game. I have one flat that I let out on an AST to friends but used Open Rent to create the listing, tenancy, etc. etc and it's all worked very well. Open Rent has been superb. I also run a holiday cottage largely through Airbnb and that works very well too (although business has gone on hold since Covid-19 but that's to be expected). I have a friend who has just bought two small flats in the town where my properties are and she has asked me if I could manage them on her behalf, to find suitable tenants for an AST, collect the rent, etc. She is older and not computer-literate at all  and doesn't live nearby or want any hassle so I was only too happy to offer to do this for her as a sideline to my 'real' job which has nothing to do with property. I had thought I would just advertise her two properties on her behalf on Open Rent using Rent Now, choose some suitable tenants, deposit into an approved scheme, etc. etc. and simply pass the rent owed to her monthly less my expenses every month (very modest - we're talking about 60/month as I'm doing it as a favour, really). I opened up a dedicated bank account (in my name) in order to do this seamlessly (or so I thought...)

But by doing this, even on such a tiny scale, make me an 'Agent'? I have done a bit of research and was quite taken aback to learn that I might need to register for various bodies such as the Property Redress Scheme, take out Public Indemnity Insurance, and a CMP scheme as I would be in effect holding both the tenant's rent and the rent due to the landlord each month...all this would add up to far more in membership fees alone than I would be earning as a 'hobbyist' doing a friend a favour!

I would rather try to help out somehow if I could by using Open Rent (or an equivalent) than giving a lazy High St agency the pleasure of doing very little and charging a lot for doing so but I'm in a bit of a bind. I want to do the right thing of course and comply with the regulations but it seems that the yearly membership fees take would stop the sort of thing I'm trying to do (and I completely understand the need for regulation to try to weed out dodgy landlords!) Do you know if there's a way around this or have any suggestions on how I can best proceed?

Apologies if this sort of thing has already been covered elsewhere.

I look forward to hearing your thoughts soon.

Kind regards

chris37
Hero Member
Posts: 867

I like property

« Reply #1 on: June 11, 2020, 10:43:46 AM »

I really would not consider doing this,although I can understand why it seems like a good idea.You have been lucky so far,letting to friends is considered a real risk.The possibilities for embarrassment and acrimony,maybe falling out with this lady,would put me right off,regardless of the red-tape involved."No good turn goes unpunished"-Oscar Wilde.
Global Moderator
Hero Member
Posts: 3470

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« Reply #2 on: June 11, 2020, 11:10:52 AM »

The notion is fraught with downsides and the upsides are small. Why on earth has your friend bought two small flats and seems totally unprepared on how to proceed? It is OK to say "no" to a request. This falling onto you seems ill-thought-out... and could easily ruin the friendship you enjoy today. Who raised the idea, really? Was it your friend, was it you, or are you in cahoots about it being a smart move? It really doesn't sound like it is. You will feel as though you have to run everything by your friend... you might disagree on how to approach certain things... you will have to raise the idea of getting funds for repairs etc.. Once money is involved everything changes.
Newbie
Posts: 2

I like property

« Reply #3 on: June 14, 2020, 08:24:12 PM »

Thank you both for your replies. You're right - it definitely needs a bit more thought! The last thing I would want is to cause acrimony and damage a friendship all based on a rather naive notion that this was a good idea and putting my hand up to help...

Thanks again for your advice.
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