Buy to Let - expenses claimable from tenant

scottishblondie

Aside from the legal issues I can't see anyone signing up to a contract which allowed variable rent like that. They would never know what they were in for month to month.

Dal_Whinnie

G_M wrote: »

No. This would be an unfair term in the contract as the tenant would not know what they were signing up to, and would have no control over it.

A lot of contracts have variable terms in them including commercial property where the landlord charges a service charge in addition to rent. So, back to my question, where in the legislation does it state that this is not allowed for residential properties?

I accept that the market place might well mean that I would not find a tenant who would be prepared to enter into a contract on those terms but I am trying to confirm what the legislation says before I decide what is commercial.

G_M wrote: »

what if the freeholder levies a one off maintenance charge ie for a roof replacement? Would you pass that on to the tenant too?

No, I was not envisaging charging capital repairs only what might be considered as day to day running costs. In fact, I believe s11 of Landlord and Tenant Act imposes responsibility on the landlord to maintain the property in a fit state. I am not particularly looking for a debate at this stage about what is fair and what isn't, as I said, I am not looking to be unreasonable, I would just like to clarify a legal point by reference to relevant legislation.

Dal_Whinnie

Thrugelmir wrote: »

So if the roof requires replacing your tenant may end up with a bill of several thousand pounds .........

Although they receive minimal benefit from the financial contribution made.

As I have said above, I am not looking to do this, I am simply considering whether it is possible to pass those costs which the tenant directly impacts on to the tenant specifically rather than cover these as part of the basic rent

BitterAndTwisted

No, it is not possible. You've already been told that. If you want definite confirmation by way of contract law then seek professional advice and pay for it.

I don't understand why you can't seem to understand why your hypothetical situation is unreasonable although it's been explained.

The rent you charge the tenant is inclusive of all services bar C Tax and utilities. You don't get to charge them for anything else.

You sound like a newbie to the BTL business so I suggest you join a landlords association tout suite

franklee

Dal_Whinnie wrote: »

So, back to my question, where in the legislation does it state that this is not allowed for residential properties?

...

I would just like to clarify a legal point by reference to relevant legislation.

You could try landlordzone, some of the posters there are a bit more legally minded. Or join a landlord's association and ask on their legal helpline. Also landlordlaw has various fee options for joining one of those may suit you.

FWIW As a tenant I'd avoid such a setup.

Dal_Whinnie

BitterAndTwisted wrote: »

No, it is not possible. You've already been told that. If you want definite confirmation by way of contract law then seek professional advice and pay for it.

Thank you.

BitterAndTwisted wrote: »

don't understand why you can't seem to understand why your hypothetical situation is unreasonable although it's been explained.

Because I don't believe it is, in respect of some of the costs incurred under the service charge where the level of cost is as a direct consequence of tenants behaviour, so let us just agree to disagree about what is reasonable

BitterAndTwisted wrote: »

rent you charge the tenant is inclusive of all services bar C Tax and utilities.

Council Tax is an interesting one because that is a charge on the property but legislation allows for it to be levied on the occupant. Utilities is very much the type of cost I am talking about. Where you have a single property unit (i.e. house) then the position is clear but where you have a collection of properties where those costs are shared through the service charge chargeable on the landlord.......

BitterAndTwisted wrote: »

sound like a newbie to the BTL business so I suggest you join a landlords association tout suite

Actually, I'm not, although only one of my properties fall within this category, and generally my agent and their solicitors have been very good but on this point (which I accept may in practice be purely hypothetical) they have given me the same standard of answer as on here and not supported it by specific.

I fully accept that certain costs are not chargeable to tenant and that the practical issues around splitting out service charges, supplying tenant with appropriate documentation, etc could well mean that this is a non starter but there is a difference between whether something is just plain too difficult or actually not allowed under the law.

princeofpounds

A lot of contracts have variable terms in them including commercial property where the landlord charges a service charge in addition to rent. So, back to my question, where in the legislation does it state that this is not allowed for residential properties?

Google 'Unfair clauses in consumer contracts'.

Much of the 'legislation' is actually case law, not statute. So it is not a case of simply pointing to the housing act.

In short, consumers cannot be held to clauses in contracts that introduce a significant imbalance of power. In this case, they would be signing up for a liability that is arbitrarily determined by a third party and they have no way of mitigating it.

In particular the OFT produce a guide to help with interpretation for rentals. It is on the web. It won't deal with the example you quote as it is so unusual, but read the notes about the general principles and it will help you understand.

Dal_Whinnie

princeofpounds wrote: »

Google 'Unfair clauses in consumer contracts'.

Much of the 'legislation' is actually case law, not statute. So it is not a case of simply pointing to the housing act.

In short, consumers cannot be held to clauses in contracts that introduce a significant imbalance of power. In this case, they would be signing up for a liability that is arbitrarily determined by a third party and they have no way of mitigating it.

In particular the OFT produce a guide to help with interpretation for rentals. It is on the web. It won't deal with the example you quote as it is so unusual, but read the notes about the general principles and it will help you understand.

Actually, I do understand all this and I am not looking to arbitrarily levy a charge only to enable the tenant to cover those elements of the service charge which he does impact and can thus mitigate because at the moment his actions can increase my costs and I have no control over this.

However, this is not a major issue and I can't change lease terms at present, only when the current tenant moves on. My question was more one of general interest and the response on here is very clearly of the view that, even if I am able to incorporate this in future leases, that it would not actually be the done thing and that I should continue to charge a level of rent to cover my costs rather than charge a slightly lower rent plus a service charge element.

Out,_Vile_Jelly

Can you clarify which elements of your service charge you believe to be for the exclusive benefit of the tenant? Surely maintenance of the communal areas and structure of the building enhances the value of your asset and are for your long-term benefit.

You sound like a nightmare housemate a friend of mine once had in a student houseshare; she claimed that as she watched shorter TV programmes than the others she should pay a reduced share of the electricity bill.

Dal_Whinnie

Out,_Vile_Jelly wrote: »

You sound like a nightmare housemate a friend of mine once had in a student houseshare; she claimed that as she watched shorter TV programmes than the others she should pay a reduced share of the electricity bill.

It's amazing how, what started as a relatively simple question, develops into me being a real ogre. I just wanted to understand the legal side around this question in a bit more detail because the response I had from my agent gave no reason why I couldn't, just that I couldn't.

I am not looking to profiteer unfairly, in fact, my thoughts could well have led to tenant paying slightly less.

I appreciate the legislation around consumer protection which adds protection for individuals as compared with businesses. However, it is very common for lessees of business premises where there is shared occupancy to be charged a service charge for lifts, cleaning of common parts, insurance, etc based on the proportion of the building they occupy so, conceptually, why not for tenants in a leasehold property. Having said that, I know somebody will point out that I am the lessee and therefore I am being charged a share of service costs but again, in a commercial situation, a sub tenant would almost certainly have the service charge passed on to them.