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  #31  
Old 24-November-2003, 15:55
squidgy
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Absolutely right squidgy....this is the key to my action.
I see. So - Anne wants to know the limit of her risk. Fair enough.

As far as I can see, Anne's maximum liability to you shouldn't be more than the rent due under Michael's tenancy, for the shortest time you need to Catherine legitimately - plus perhaps a grace period. I'd suggest three months rent, perhaps four, but definitely not less than two. Subtract the deposit.

No-one's wants to provide an open-ended guarantee. If a tenant stops paying rent, then I think the guarantor should only be expected to pay the rent for a reasonable amount of time - not forever. Guarantors can't force landlords to evict tenants. So they want to see terms in the guarantee that limits their liability to certain specified maximums.

But this is about your guarantee agreement with Anne. The lodger agreement between Michael and Catherine doesn't really affect it.

However, even if Anne knows what her maximum liability is, she'd still want to size up the chances of hitting that max. Having a look at the lodger agreement will help her - though not half as much as getting clued up about the statutory laws about lodgers. Anne's probably thinking, What are the chances of Catherine hounding Michael out of his own home?

Firstly - it's very unlikely, Secondly, even if Michael does move out - he can still charge Catherine the rent.

But maybe Anne's thinking - What are the chances of my dear Michael vanishing into thin air? If you're going to claim against Anne's guarantee, then Anne will want Catherine's rent to put towards it.

But she can't collect the rent from Catherine without Michael's power of attorney.

Unless - Catherine's lodger agreement specifies that Anne is one of Michael's authorised rent collectors. Everyone's happy!

I haven't overlooked something obvious, have I?
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  #32  
Old 24-November-2003, 16:26
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I see. So - Anne wants to know the limit of her risk. Fair enough.
We were advised that her son Michael was living in expensive and appalling digs before she found our flat for him.

I think Mum will do all she can to ensure that we are happy with the situation. She likes the flat and she likes landlords that carry out urgent repairs promptly!!!!!

I don't think Mum will want this tenancy to be ended.

Let's wait to hear from Anne............
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  #33  
Old 24-November-2003, 16:54
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As neither Anne or her son want to create a joint tenancy I need to have a licence situation endorsed by Anne remaining guarantor (she is a career woman in secure employment)
I think Anne's more likely to okay it if the lodger agreement gives her the right to collect the rent in Michael's absence.

Should Catherine be there and not move out I am wondering if even then I could hold the guarantor liable for rental loss and any damages
I expect you can. You can continue to claim the rent until your tenant has formally vacated the premises - but Michael can't formally vacate until he's moved out all of his possessions, guests, lodgers and children, and given you the keys back. As long as one of his guests is still there, the tenancy is still in force. That's the reason you should check the inventory in person, and not just take the tenant's word for it.

If there is a furture problem I was interested in a fixed price (tax deductable!) service offered by Landlord Action but you can see that this "website under construction" doesn't even mention the core service detailed in "The Complete Guide to Letting Property"
I think you shouldn't need anything like that. The only time you really need a lawyer is when you need to prove something complicated. Most tenant evictions and debt collection is straightforward.

Assured shorthold tenants can always be evicted unconditionally, either at the end of their fixed term, or with two months' notice. The only time you ever need to prove anything in court is when you want to evict them more quickly than that.

Rent arrears can be proved with your collection account statements. Damages are easy to prove, as long as the damaged items you want to claim for were on the inventory list, and you've kept your purchase records. The only time you might have difficulty proving damage is if the thing wasn't on the inventory, or if you want to claim more for a repair than the thing originally cost to install.

Whether damage was done by your tenant, or one of their guests or sub-tenants, makes no difference, your tenant is still responsible to you. The guest is only responsible to the tenant, and not to you. Even if Catherine becomes Michael's tenant by default, you need only take action against Anne and Michael. If Michael wants to take legal action against Catherine himself, then that's up to him.

Most of the time, you shouldn't need a lawyer.
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  #34  
Old 24-November-2003, 17:07
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That means...thankyou.

Mercy also until we have the reply from Anne
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  #35  
Old 24-November-2003, 19:18
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  #36  
Old 12-December-2003, 18:19
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Squidgy... this has just arrived for our information. Some light reading for you whilst I'm away








Do you agree it might be dodgy if I accept a voluntary excess payment over the rent stipulated in the assured shorthold tenancy agreement? It would not be too much of a burden to await the expiration of the initial six month tenancy period before making giving formal notice of an increase the rent in accordance with our verbal agreement.

Last edited by Worldlife; 06-January-2004 at 04:42.
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  #37  
Old 12-December-2003, 21:37
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By 'eck. Complicated. I've made this totally clear, haven't I?

Not saying he will, but - if Michael should need to claim housing benefit or local housing allowance to pay his rent to you - then the council will treat Catherine's lodgings rent as Michael's income - and he will also have a non-dependent deduction. You see, if Catherine is officially Michael's rent-paying lodger, then he might not be able to convince them that she's his girlfriend.

If Michael and Catherine were both joint tenants of yours, then Michael won't have either of these problems. But hey - if that problem came up, you said you'd be able to change it, yeah?

About Catherine becoming Michael's tenant if he disappears - you can use Michael's terms to evict Catherine if that happened. But it's a good idea to check that Anne is authorised to collect Catherine's lodgings rent on Michael's behalf - that's the point of Anne guaranteeing Michael's rent to you, yeah?

Do you agree it might be dodgy if I accept a voluntary excess payment over the rent stipulated in the assured shorthold tenancy agreement?
Hmm - probably only if you're trying to boot someone out. I reckon it's best to consider it an extra deposit for the time being. Has he specifically asked you for a receipt?

Ah what the heck - go for it I reckon. If he wants a receipt, then sign for the whole lot as though it's a rent payment. He might be able to dispute it at a later date, but then again he might not. Now if you denied that he ever paid it - that would be dodgy. Short of that, I reckon you're okay.
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  #38  
Old 29-December-2003, 01:18
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Thanks Squidgy...

I'll sleep well tonight knowing that the solicitor for the guarantor has drawn up the agreement and the guarantor is probably a more reliable source for a claim should the rent not be paid or damage caused to the property.

Interesting that the solicitor for the guarantor has not asked us to agree to the the document and we have received a draft through the guarantor by fax.

Does the license comply the terms of the assured shorthold tenancy that stipulates "no sub-letting"? I don't think we should be involved at all with the "girl-friend". Our main concern is the rent is paid to us by the tenant and if not the guarantor becomes responsible.
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  #39  
Old 05-January-2004, 20:18
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Perhaps I'm struggling to keep it simple ...

Does the license comply the terms of the assured shorthold tenancy that stipulates "no sub-letting"?
No.

But you've still kept to your side of the bargain.

Our main concern is the rent is paid to us by the tenant and if not the guarantor becomes responsible.
There's always a risk that you won't get paid, no matter what you do.

The whole point of getting the tenant to name a guarantor is to reduce that risk.

But even so, there's still a risk that both the tenant and the guarantor might do a runner on you.

How can you reduce that risk?

The easier it is for the guarantor to get their hands on the money they owe you, the more likely they'll pay you. If your tenant has a lodger, it makes sense to check that the tenant's guarantor is authorised to collect the lodger's rent on behalf of the tenant.

Then again, if the guarantor looked fairly safe in the first place, it shouldn't really matter.

The way you put it - it sounds like, you think the T&C's are more important than the relationships between the people, including yourself. That makes me wonder if you have an insurance policy for the rent - and if you're trying to let in a way which complies with the terms of that policy.

Do you have insurance to covers the risk that your tenant won't pay? Or are you planning to get such insurance? Or do you have a buy-to-let mortgage that's tied to a payment protection insurance deal?

If so - I wish you'd mentioned it earlier! I believe that insurance companies will use any excuse to wriggle out of a claim. So you have to be careful not to invalidate your policy. It might already be too late - but post the T&C's of the policy, and we'll see how we can rescue the situation.

But if you've never had rent insurance - then I think you're no worse off now than you were before.

Last edited by squidgy; 05-January-2004 at 20:23.
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  #40  
Old 05-January-2004, 20:53
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Thanks Squidgy and congratulations on your "Screamer of the Year Award". Well done

We have been renting property now for over five years selecting tenants ourselves and so far have had continuous lettings and no runners!!!! To deal with an inheritence problem we recently obtained a competitive remortgage from C&G with a consent to let but not a formal "buy to let" agreement. No special insurances were required.

Insurance for non-payment of rent is not one of our high priorities!!!!

by squidgy

Then again, if the guarantor looked fairly safe in the first place, it shouldn't really matter.
Bang on!!! The guarantor holds a professional job in government and not the sort of person who would want to be involved in any claim but whom, if necessary, it would be useful to pursue a claim.

However the whole set up is one of good will. The tenant came to us and explained what was happening and by him doing so we have sorted the whole thing out, involving his guarantor, and to the benefit of everyone...... except the young lady living in the flat under licence,

Interesting we both agree that the Licence drawn up by the solicitors for the guarantor might well contravene the shorthold tenancy agreement stipulating "no-sub letting". It was probably implied by us that if an adequate licence was in force we would not implement that particular clause.

Interesting therefore that the solicitor acting for the guarantor has not formally sought our views or consent to the Licence - they normally like "belt and braces" protection




Last edited by Worldlife; 05-January-2004 at 21:01.
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  #41  
Old 07-January-2004, 13:40
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It was probably implied by us that if an adequate licence was in force we would not implement that particular clause.
I understand that. But any temporary waiver of your rights does not prejudice enforcement of those rights at a later date. Your tenant's lodger is your temporary waiver. You reserve the right to evict your tenant, and his lodger, with only two weeks' notice.

At least in theory, anyway.

In practice - it shouldn't be a problem if the courts don't see it this way. After all - you still have the same right to evict your tenant and his guests with two weeks notice for rent arrears - and the same right to evict with two month's notice for no reason at all.
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  #42  
Old 07-January-2004, 15:06
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Interesting therefore that the solicitor acting for the guarantor has not formally sought our views or consent to the Licence - they normally like "belt and braces" protection
True - but what if you refused consent?

Any guest that stays overnight is a licencee of the tenant. You can't physically prevent your tenants from having visitors - and therefore lodgers either.

Sure, you can evict tenants for having lodgers - but that doesn't mean you can physically stop a tenant from taking a lodger in the first place.

So, even if you refused consent, Michael still wants to cover his own back with Catherine.

Here's another "interesting" thought. If a tenant has dependent children living with them, then those children are licencees of the tenant. So if a pregnant female tenant gives birth, then she is also in breach of the "no sub-letting" clause. Unless she immediately arranges for the baby to be accommodated elsewhere - for example, by sending it to a boarding school, or local authority care. Or putting it up for adoption.

But you definitely can't force female tenants to have abortions!

So - why are you involved? Because you prefer not to evict Michael for it, if you're able to increase the guaranteed rent. That's all. But you're not upping the rent straight away. You're only planning to up the rent at the end of the fixed term, if your tenant wants to renew. You can always up the rent of renewing tenants, and you can always evict tenants who don't renew - regardless of whether they have lodgers or not.
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  #43  
Old 07-January-2004, 15:50
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by squidgy
But you're not upping the rent straight away. You're only planning to up the rent at the end of the fixed term, if your tenant wants to renew. You can always up the rent of renewing tenants, and you can always evict tenants who don't renew - regardless of whether they have lodgers or not
The tenant is now paying the increased rent that we intimated would be charged at the end of the assured shorthold tenancy. We do not intend to acknowledge receipt of this increase to the tenant (but of course declare it to the tax people on the statement of income!)

When we send out the formal offer for the periodic tenancy and the notification of the new rental I don't think we should say too much even then. "Goodwill payment" would have all sorts of nasty implication if churned by a lawyer .......may just note that the new rent has been paid since January 1st 2004 and that it will be declared for tax purposes!!!!!!!!!!!

What do you reckon?
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