Tenant references/deposit?

AdrianC

All,

We've just had an offer accepted on a house for sale locally. The vendors want to stay in the house, long-term, but need to raise equity, so are looking to rent the house back. They seem like lovely people, and have clearly kept the place in top-notch order in the years they've been living there, so we've got absolutely no qualms about them. We're going to manage the let ourselves.

Any suggestions for a good reference-checking source, and which of the deposit protection schemes would you use?

Thanks,
Adrian.

Guest101

What references are you going to check? Emplyer references are easy - ask them to show you last 3 payslips. Bu you wont have any LL references to check.

But the biggest thing you need to consider is that they would become protected tenants. Hopefully the person who posted on the last one can help with this. I just got the gist - so double check

AdrianC

Guest101 wrote: »

What references are you going to check? Emplyer references are easy - ask them to show you last 3 payslips.

Ah, now that's the hidden bonus question... <grin>

But you wont have any LL references to check.

I think the basic presentation of the house, and the hour-long chat we had with them, has satisfied us on that front.

But the biggest thing you need to consider is that they would become protected tenants.

They would? Hmm. That sounds a bit :eek:... I thought "sitting tenants" only differed from AST if they'd been there since God were a lad, or the late '80s at any rate? Given that they aren't tenants currently, wouldn't it just be AST? One to ask the solicitor, I guess.

Hopefully the person who posted on the last one can help with this. I just got the gist - so double check

Do you have a link to that thread?

AdrianC

theartfullodger wrote: »

OK, no problem. You are licensed as a "Sale & Lease back" merchant (= are regulated by the government financial watchdog, the Financial Conduct Authority (FCA). .. )?? And appreciate such deals are, I think for at least 5 years...

I'd not touch one with a very long bargepole...

OK, now I'm very scared indeed. I can see a long conversation with the solicitor on Monday morning.

Guest101

Thanks TAL, I knew someone would have the link. Couldnt remember for th elife of me which thread it was.

AdrianC

theartfullodger wrote: »

Good: But...

£5 (to an agreed housing charity) that your solicitor, if a decent local high-street chap, won't have a clue about this sort of dodgy deal.

I'd hope that he'd be able to find out, though... Anyway, I'm holding for Shelter's helpline at the mo, after finding a page on their advice website about it.

The estate agent didn't seem to have a clue about this, either - they were definitely of the impression it would be bog-standard AST.

kmmr

AdrianC wrote: »

The estate agent didn't seem to have a clue about this, either - they were definitely of the impression it would be bog-standard AST.

Please don't take any advice from the EA on this. They have a vested interest in the sale - but not in helping you when you are stuck with a protected tenant, and an investigation by the FCA!

AdrianC

Shelter weren't able to be much help, since the question was coming from the opposite end to their usual.

kmmr wrote: »

Please don't take any advice from the EA on this.

<grin> Don't worry about that!

Anyway, a bit more digging shows it MIGHT not be so clear-cut.

OK, this is dated before the most recent FSA changes, but not by much - 2010 - but there's a thread on LandlordZone (Can't link, but it's thread 30770, "Buying then renting back", started 4/8/10) started by somebody in a very similar position - who finished up by asking the FSA, whose response was...

The FSA advise me that as I would fail their "By Way of Business" test, because this is a one-off for me, they would not consider that I need to be authorised by the FSA.

The FSA handbook, PERG section 14 refers.

Whether that would mean that future tenancy questions would not arise, or just that the FSA/FCA scheme doesn't apply, is another question.

Mmm.

I'll ring the FCA's advice line on Monday, and post back their response.

It seems a trifle odd that we could buy both this place and next door, and rent next door to these guys, but not the house they're currently living in. Or, if they were currently tenants, that'd be fine, too. Seemingly, every other permutation... Collateral damage from trying to restrict the sleazy "Equity Release" slugs, I s'pose.

AdrianC

AdrianC wrote: »

Whether that would mean that future tenancy questions would not arise, or just that the FSA/FCA scheme doesn't apply, is another question.

Mmm.

I'll ring the FCA's advice line on Monday, and post back their response.

The FCA did not believe that this fell within the scope of their restrictions. Of course, they wouldn't put it in writing - "We're the telephone team - you need to write to another team to get anything in writing..." - but...

Our solicitor has also looked into it, and can find nothing that affects this situation. The restrictions apply to the marketing of SARB schemes only.

So... Back to the original question... Anybody got any suggestions for good online reference-checking services?

Ta!

BitterAndTwisted

Why the eff would you need references? You'll be paying them tens or maybe hundreds of thousands of pounds for their house!

HOWEVER, on the other hand the usual reason people want to get into these sorts of deals is that they've used the equity in their homes like an ATM and run debts up to their earlobes which the remaining equity will barely pay off. So going into a conventional rental won't be attractive because they've got lousy credit-records and possibly inadequate funds for the first few months rent and the deposit.

Are these the sort of people you'd like as tenants?






The small print: some friends of mine bought a BTL flat and their first tenants were the vendors who paid them a grand a month in rent for two years and then went quietly with no problems.