London stamp duty -tenant responsability??

aerobas77

Hi

I m in the process of securing a studio flat in London. Before parting with any cash , I ve request to view a copy of the tenancy agreement.
Following thinks bother me so I wanted to check with the moneysaving experts amongs you:

1st :It is written on the contract:
[FONT=Century Gothic, sans-serif]Once this Agreement has been signed, the Tenant must pay the Stamp Duty Land Tax for this Agreement to the Stamp Office. [/FONT][FONT=Century Gothic, sans-serif]Failure to pay the Stamp Duty Land Tax within 30 days could result in a fine.
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[FONT=Century Gothic, sans-serif]Is it the tenant responsability to pay that? If yes it it a monthly payment on top of rent and bills or a one off payment?[/FONT]


[FONT=Century Gothic, sans-serif]2nd [/FONT]
[FONT=Century Gothic, sans-serif]Ground 2: [/FONT][FONT=Century Gothic, sans-serif]at the start of the Tenancy the Tenant was advised that the Landlord owns the property, normally lives there and that his lender may have a power of sale of the Premises if the Landlord does not make his mortgage payments for the Premises;[/FONT]


[FONT=Century Gothic, sans-serif][/FONT]
Does that mean that Landlord has not got permission to let this sudio, that I could be kick out if he does not keep his mortgage payment?:eek:

this is quite a reasonable rent for London but.. this clauses make me wary. I would like your opnions before I get the estate agent opinion/explanation.

Thank you in advance:j

sonastin

Stamp duty can be payable on some leases but not normally for short-term residential AST-type leases. It might just be a standard clause carried over from a contract where it is relevant but I would ask for it to be removed just in case.

I would also seek clarification on why they think they can claim the landlord "normally lives there". Yes the mortgage lender can kick you out if the LL fails to keep up his repayments but they need to follow due process of evicting you through the courts just like you LL would. However the fact that he is claiming that he normally lives there does make it sound like he hasn't notified his lender which does raise a few questions of what else he hasn't done...

poppysarah

Find somewhere else.

Hump

The second part of your post - ground 2 - is usually included by landlords just in case they decide to serve you with a section 8 notice in the future citing grounds 1 or 2, so in and of itself it won't be anything to worry about.

Having tenancy agreements 'stamped' virtually disappeared after 2003, so your landlord might be using an old tenancy agreement - unless you have a lease of a substantial value - (more than £125k I think, though others will correct me!) see https://www.hmrc.gov.uk/sdlt

gordonbennet

No - pasturesNew (#5 above) has got the wrong end of the stick.

Hump on the other hand (post #4) is spot on - The "Ground 2" clause is fairly standard, sometimes there just to keep the mortgae company happy. You might want to enquire whether it is likely that the landlord will require his 'home' back during the tenancy, but I doubt it.

The stamp duty clause is very out of date and they are almost certainly using an old agreement. You might want to ask about that too.

G_M

Because the stamp duty issue is both strange, and confusing people, perhaps you (aerobus77) can confirm:

Are you buying the lease on a flat? (£X00,000 one-off payment)
Or taking up a tenancy (AST)? (£X00 each month)

PasturesNew

gordonbennet wrote: »

No - pasturesNew (#5 above) has got the wrong end of the stick.

I never read past line 2-3 to be honest

Just call me Skimp for short.

I'll remove my post.

aerobas77

G_M wrote: »

Because the stamp duty issue is both strange, and confusing people, perhaps you (aerobus77) can confirm:

Are you buying the lease on a flat? (£X00,000 one-off payment)
Or taking up a tenancy (AST)? (£X00 each month)

Thanks for all your advice.
I m not buy ing the lease of the flat_pale_ .I thnking about renting it , ie taking up a AST tenancy.
and another confusing thing in the contract is an aditional fee of 30£ plus vat per month for any extension of the contract/ Legal or not?

G_M

aerobas77 wrote: »

...an aditional fee of 30£ plus vat per month for any extension of the contract/ Legal or not?

Yes, quite common. In fact that's cheap. Many agents charge £100+ to renew a tenancy.

However, you can decline to sign a new tenancy and just stay on a periodic tenancy (month by month). No fee can be charged as this happens automatically.

lynzpower

Yes but it says "per month" not a one off contract fee

Personally I would go somewhere else. If a LL is using an old style agreeement with some4 dubious terms in, I suspect youll have nothing but hassle there.

Kepp looking.

princeofpounds

Don't worry.

Stamp duty can apply to high-value rental contracts. The idea is to stop people disguising purchases and sales as rental agreements. Technically the old stamp duty was replaced by something called SDLT.

Simply put you don't need to worry about it unless the NPV of your rental payments is over £125k. NPV is basically taking all the future rental payments you have agreed to and adding them up (although there is a formula that discounts the value of future payments so it's not quite so straightforward).

That's my brief explanation but I'd encourage you to google SDLT and you'll see a proper explanation.

As for the second part, that's always true of a mortgage situation. A lender can cancel the 'tenancy' of the so-called owner and this cancels all subsidiary tenancies including your own. You have more protection if your landlord has permission to let, as the lender has already agreed to honour your remaining contract. If not then you basically will have only a couple of months to move after a repossession, so the key is not to pay for rent miles in advance.