Buy to Let - expenses claimable from tenant

jjlandlord

BongoTheWhippet wrote: »

That means that only utility (electricity, gas, water) or council tax. Other charges are illegal.

You must realize that the OFT's guidelines do not state the laws, but are just that: guidelines.
In addition these guidelines are not comprehensive but examples of what they would consider unfair terms, or not.

One thing though, which could cause trouble, especially during a fixed term tenancy, is a provision allowing an unbounded increase in additional charges paid by the tenant. This has already been mentioned previously in this thread.
Again, perhaps best to have everything included in the rent, and to have an acceptable rent increase clause.

nrsql wrote: »

What if someone from another flat breaks a window - would it be fair to charge your tennant for part of the repairs? If you were managing the building yourself it might be in your interest to inflate costs knowing that the tenant would have to pay or perhaps delay maintenance or bills until after void periods.

Repairs to windows is statutory obligation of the landlord, which he therefore cannot charge for except to recover his costs from the person directly responsible for the damage.

HAMISH_MCTAVISH

jjlandlord wrote: »

You must realize that.....

I don't think he was here to realize anything.

As it turns out, this.....

HAMISH_MCTAVISH wrote: »

Actually, I sense a vague familiarity to this kind of frothing anti-landlord rhetoric. It's the sort of thing you'd normally only expect to find on one of the extremist fringe websites. What are the odds it's been linked to and you're just over here trolling, I wonder...

.....was right on the money.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=176705

rentergirl

This is a new low. landlords now want to pass everything onto tenants, and try to avoid paying everything. Your tenant pays to live in a reasonably maintained home, that's what they pay rent for. Unbelievable!

Dal_Whinnie

rentergirl wrote: »

This is a new low. landlords now want to pass everything onto tenants, and try to avoid paying everything. Your tenant pays to live in a reasonably maintained home, that's what they pay rent for. Unbelievable!

I surrender, take me out and put me in the stocks !!!

No, what landlords want to do is get a reasonable return on their investment and for costs in relation to the property to be borne equitably. Both tenants and landlords have rights and obligations, what the legislation tries to do is to ensure a fair balance between the two and that is all I am trying to do, I am not looking to avoid paying everything and as has already been made clear it is the landlords responsibility to maintain the property.

somethingcorporate

What I don't understand is why, if you envision that the tenant could end up paying less, you would want to do it when you can guarantee your income by just setting a sensible rent that covers it - assuming you can still attract tenants at this price.

It would make me run a mile from any rental agreement I would be singing up to and I would never in a million years think of putting this in an agreement for one of my tenants.

You're a business and as such are in a much better position to expect and plan for variable costs associated with running your business - pushing this onto a tenant smacks of unprofessionalism on the part of a landlord.

It's an interesting point, but worthy only of discussion rather than practical application in my opinion (as it appears you have concluded yourself).

Dal_Whinnie

somethingcorporate wrote: »

What I don't understand is why, if you envision that the tenant could end up paying less, you would want to do it when you can guarantee your income by just setting a sensible rent that covers it - assuming you can still attract tenants at this price.

simply on the basis that the costs could go either way

somethingcorporate wrote: »

You're a business and as such are in a much better position to expect and plan for variable costs associated with running your business - pushing this onto a tenant smacks of unprofessionalism on the part of a landlord.

I have to beg to disagree about the unprofessionalism element, for clarity, I am not looking to charge variable costs in relation to repairs and maintenance where I would agree with you entirely, but items such as utilities which are effectively consumed by the tenant. My question was also influenced by the normal situation with commercial properties (are all commercial landlords unprofessional) but as others have kindly pointed out there are a lot of differences between commercial and residential which perhaps I had not fully considered when posing my original question.

somethingcorporate wrote: »

It's an interesting point, but worthy only of discussion rather than practical application in my opinion (as it appears you have concluded yourself).

I have certainly learned things from the discussion so yes, worth the discussion. Quite often, having discussed the issues and weighed everything up, you decide to stay with the status quo and yes, that is what I plan to do.

Ulfar

You also have to consider your leasehold which is a lawful contract which will state that the leaseholder is responsible for payment of the charges.

Maintenance charges do not count as utility or council tax, they are for maintaining the fabric of the building and common areas. This is for your benefit and is are costs as detailed in law.

As a Landlord you should adjust your rent level to take into account these costs, but they cannot be passed on directly.

If your management company are spending too much or spending on things you don't think are required then attend the AGM and bring up your points.

brit1234

Dal_Whinnie wrote: »

No, what landlords want to do is get a reasonable return on their investment and for costs in relation to the property to be borne equitably.

Sounds like you overpaid for the property in the first place. It seems you either have to raise the rent above the competitors or take a hit each month.

If it is uneconomical you should really sell to avoid a bigger loss.

Thrugelmir

Dal_Whinnie wrote: »

No, what landlords want to do is get a reasonable return on their investment

You are running a business not owning an investment. So need to accept all the rewards and risks that go with business ownership.

If your property does not provide a reasonable return on the capital you've employed and the hours you commit. Then sell it.

Dal_Whinnie

Thrugelmir wrote: »

You are running a business not owning an investment. So need to accept all the rewards and risks that go with business ownership.

If your property does not provide a reasonable return on the capital you've employed and the hours you commit. Then sell it.

Agreed; I am running a business and fully accept that risk and reward goes with that but running a buy to let business requires the acquisition of assets (i.e. the properties to let out) so what are those assets if not investments? if you want to look at it a different way then if you want to run a business then you will need capital to invest in that business, the amount of that will clearly depend on the nature of the business and will include cash and time but whatever you are 'investing' in your business you are doing it with the aim of making a reasonable return on it, if not, why are you doing it.

brit1234 wrote: »

Sounds like you overpaid for the property in the first place. It seems you either have to raise the rent above the competitors or take a hit each month.

If it is uneconomical you should really sell to avoid a bigger loss.

How do you deduce that, I was making a general comment not complaining that I was not getting a reasonable return. However, i agree that as with any business you have to keep all aspects of it under review and if a particular property ceases to earn it's keep then get out of it and buy another one, if you think the whole business proposition is no longer economical then close the business and look at other channels to invest your time and money. That's what business is about.