Tenant v Permitted Occupant

LittleMax

We are about to rent out a house and have instructed an agent to find a tenant, carry out checks, and draw up tenancy agreement and inventory. We will be managing the property ourselves. The tenants are due to sign on Monday and I have been pushing to see a copy of the tenancy agreement which the agent has been reluctant to share with me, stating I don't need to see and sign it.

Finally they sent it through today and I have discovered that it has been put in three names, the couple and their grown up son, who I knew would be living with them but assumed would be a permitted occupant. The agent did not tell me that they were adding him to the tenancy agreement.

Can anyone advise of the pros and cons of having the three named on the tenancy agreement. I am sure the agent has only done it to get extra money for the credit checks.

The couple have indicated that they wish to rent the house long term, and after the 6 months shorthold tenancy I had planned to let it run on to a statutory periodic tenancy.

The couple are downsizing because their eldest son has just flown the nest. What happens when this son moves out, as he undoubtedly will in a year or two; will I have to draw up a new shorthold tenancy agreement for the couple? If so this seems a pain and I would be better him being a permitted occupant.

Also if Mum and Dad were to move out and leave the son behind then does he have any extra rights because his name is on the tenancy?

It really seems the only person benefiting from this is the agent. All advice gratefully received.

Fire_Fox

You don't need to see a legally binding contract that you are party to? Oh yes you do! :eek: Do you understand you cannot delegate your legal responsibilities and obligations to a letting agent, the buck stops with you?
http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

G_M

They were reluctant to show you the document that would bind you and your tenant?

And then you were going to manage the property yourself? While they walk away leaving you with whatever document and wash their hands...?

Check EVERYthing this agent does.

Instruct them to show you the tenant application forms, the credit checks, the tenants references etc etc BEFORE any tenancy agreement is signed, set up, or even promised to the tenant.

Ring the agent tomorrow AND FOLLOW UP IMMEDEDIATELY IN WRITING instructing them not to sign any tenancy agrememt until you have authorised/agreed.

tbs624

Anyone - absolutely anyone - can set themselves up in business as an LA - no training, qualifications or expertise needed before they can do so.

That said, the benefits of having all 3 adults fully signed up to the one tenancy agreement is that each of them can be pursued for any unpaid rent etc, either together or as individuals ( ie, they have joint and several liability).

If the son moves out then unless you agree otherwise he would remain liable for the rent, along with his parents. If the parents move out and the son remains in situ then again , all 3 still have liability for the total rent unless you agree otherwise. If one T wants to formally bring a joint tenancy to an end then it ends for all Ts, once the tenancy is outside the Fixed Term.

Of course you need to see *all* paperwork relating to the tenancy of your property.The LA works for you, not the other way round.As G_M's post suggests, set out your stall.

LittleMax

Fire_Fox wrote: »

You don't need to see a legally binding contract that you are party to? Oh yes you do! :eek: Do you understand you cannot delegate your legal responsibilities and obligations to a letting agent, the buck stops with you?
http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

Thanks for the link - have read that already. I have been doing lots of reading and researching on here and other sites.

Don't worry I'm not delegating anything that's why I have insisted on seeing the tenancy agreement. I am also insisting on seeing the inventory even though they are saying I don't need to - that is being drawn up today and I have made it clear that I want to check and if necessary amend it before it is given to the tenant to check.

I also insisted on meeting the tenants and during that meeting we negotiated a lower deposit and rather than waiting two months which they were wanting as that was the notice they had to give their current landlord, we negotiated a 50% discount on the first month's rent. When I advised the agent of the terms agreed they were really snotty and said we shouldn't have done it . I made it clear then that it is our property and we make the decisions not them. Fair enough they can advise, but they act on my instructions not the other way round.

They are members of the ARLA and a well reputed agent in the area, they soley do lettings and not estate agency. TBH I think they are used to landlords not getting involved with anything they do - and I am unique in demanding these things!

This is my first property I have let, however I am not completely green I have worked for a University managing student properties for landlords and also a Housing Association. My main concern was drawing up a tenancy agreement and getting the property on Right Move. I am confident that next time around I can do all this myself, so it has been good in that it has boosted my confidence in my own knowledge. Also I didn't really have the time this time, to research everything whilst at the same time preparing the property, and to top it all we are now facing a crisis at home as our new build house has been flooded ... but that's for another forum ;-)

LittleMax

Thanks for all your replies, and the agent warnings. We are on the same page with all that.

The main advice I'm after is about any pitfalls for me of having son as a tenant rather than a permitted occupant. As I say my knowledge of assured shorthold tenancies is not as good as other tenancy types as I have not managed properties on this type of tenancy before.

My understanding is;

Pro - joint and several liability

Con - son may bring tenancy to an end and parents may want to stay on so I would have to draw up a new tenancy agreement with them. If we are on Statutory Periodic would I then have to offer a new 6 months Assured Shorthold at that stage?

- tenants have paid for credit check that was not necessarily required and may demand a refund if he is not going to be a tenant

Any other pros and cons?

MoneySavingUser

LittleMax wrote: »

Can anyone advise of the pros and cons of having the three named on the tenancy agreement. I am sure the agent has only done it to get extra money for the credit checks.

Yes that is all they are interested in getting more money by charging much more than the credit checks true cost and making more profit.

Some agents even charge extra for each person put onto the contract (£50 for typing an extra persons name into a document - easy money!)

You do get the pro's that are listed above but as far as the agent is concerned they don't care about the pro's these are just incidental they just care about getting paid

Fire_Fox

Tenants do not normally have to give landlords two months notice, if they are in a statutory periodic tenancy it is one month coinciding with a rent period (assuming they pay rent monthly). Any clauses in the AST that say different could be deemed unfair and unenforceable. No offence but you really ought to already know that.

LittleMax

Fire_Fox wrote: »

Tenants do not normally have to give landlords two months notice, if they are in a statutory periodic tenancy it is one month coinciding with a rent period (assuming they pay rent monthly). Any clauses in the AST that say different could be deemed unfair and unenforceable. No offence but you really ought to already know that.

Yes, I did know that and so did our letting agent who sent them to check with their current agent. From what I have worked out since, they had just missed the date for giving notice so it felt like two months to them, but in reality it was one full rental period. Sorry for not explaining chapter and verse in my previous posting, but it would be a bit tedious. The point I was making was not why I had agreed to this with the tenant - but the attitude of the lettings agent - that it was their job to discuss and negotiate with the tenant and I had no right. I had every right.

tbs624

Fire_Fox wrote: »

Tenants do not normally have to give landlords two months notice, if they are in a statutory periodic tenancy it is one month coinciding with a rent period (assuming they pay rent monthly). Any clauses in the AST that say different could be deemed unfair and unenforceable. No offence but you really ought to already know that.

My bolding - coinciding with a *tenancy period*.

T may of course have to give two months notice to LL if s/he was exercising a break clause in a Fixed Term agreement

Fire_Fox

tbs624 wrote: »

My bolding - coinciding with a *tenancy period*.

T may of course have to give two months notice to LL if s/he was exercising a break clause in a Fixed Term agreement

Is Landlordzone incorrect? Fine if it is, just need to know.
http://www.landlordzone.co.uk/notice_to_quit.htm