Taking over a rental property with tenants

alestorm

Hi all,
I posted a few months ago looking to buy a property to rent. I've been considering and reading up for a couple of years and now I've finally done it. I've done as much research as I can and there's a lot of great help here, and I've digested as much as possible, but I'm a little confused as to a particular set of circumstance I find myself in. The property I have purchased is already tenanted, it is an AST which has turned to a Periodic term. The tenant has been in for 3 years and I am happy for him to continue. However I'm really unclear about the mechanics of the handover. Firstly there is the tenancy agreement. Am I able to simply take this over, or will I need to take a new agreement out with the tenant? Then there are things gas certificate, inventory and items such as that. These will be in existence already, but do I need to get my own. Then there's the deposit which at the moment I assume will be held in bond, how is this transferred? The property is managed by an agency at present and I've tried engaging them but as yet to no avail and I'm feeling a little lost having come this far. Any advice anyone could offer would be massively appreciated
Cheers
Chris

Werdnal

As the new landlord you will inherit the tenant and all the terms and conditions of the existing tenancy. You can "offer" the tenant a new agreement but you cannot force them to sign it, particularly if the terms and conditions are less favourable, or they wish to stay on an SPT.

You should find out if they paid a deposit, and get this released to you to re-protect in a scheme within 30 days. You will also need to serve the tenant the prescribed information and T&C of whichever scheme you use, also within 30 days. Failure to do this means you are open to hefty fines. The selling landlord can also return the deposit direct to the tenant, but tenant has no obligation to them pass it on to you.

If GSC is in place, you do not need to get it re-done until it expires (required annually).

Have you got definitive proof that the tenant moved in on that date? Longer tenancies are often hidden by providing the tenant an AST, and very long tenancies acquire higher rights and security of tenure.

Have you also checked out the payment record of this tenant so you know they are reliable?

The agent is unlikely to want to engage with you as their contract if with the selling LL and it is the LL you should be engaging with the get this all sorted.

I assume as you say you have done much research, you have stumbled across this, but just in case, there is a good newbie LL thread here:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

alestorm

Hi Werdnal,
Thanks for the reply, very much appreciated. I'll contact the seller to arrange all this.
I have seen the tenancy agreement which was signed sometime in 2010 for an initial 6 months then reverting to a rolling monthly contract, so I don't think I'm in any danger (though stand to be corrected). I assume I would of course at least to update the tenancy agreement to reflect me as the landlord even if nothing else changes.
I haven't actually made enquiries as to the reliability of payment from the tenant, I wouldn't know how to do that (save for asking the seller / agent, of whom I wouldn't expect any other answer than 'yes' be it true or not). I was a little surprised of the agent being unwiling (or at least just slow) to engage, as I haven't ruled out using them, at least in the short term as a mechanism for helping me find my feet so I'd have thought they would have being trying to impress.
Yes I've studied that guide, very helpful (and scary!), it's always worth re-linking. Once again, thanks for your help
Chris

Yorkie1

You need to inform the T in writing that you are the new LL.

Otherwise you can't demand rent / it isn't payable to you.

alestorm

Yorkie1 wrote: »

You need to inform the T in writing that you are the new LL.

Otherwise you can't demand rent / it isn't payable to you.

That's a new one I hadn't got covered. Thanks Yorkie

Werdnal

The tenancy continues, you just advise the tenant in writing that you are the new landlord and from XX date the rent is payable to you.

I doubt the agent will divuldge anything to you under confidentiality - you are not yet their client and the have a duty under Data Protection not to give you any info on the tenancy. How would you like it as a tenant if the agent started giving information away to a complete stranger about you?

You should have ascertained proof of the rent payments and tenant's reliability BEFORE you followed through with the sale. Has it ever occurred that the tenant may be a pain in the bum, and LL has shifted the property on with him in situ to save the cost and hassle of eviction?

You have also been shown a tenancy agreement which was signed in 2010, and whilst it is probably that is the initial agreement, as I said earlier, it is not unheard of for LLs to hide a longer tenancy behind a "new" AST. You have just been shown an agreement - have you actually asked the tenant when they first moved in?

The current purhcase of the property is between you and the vendor (LL) and you need to deal with them for any information on the property until you complete, and even then, the agent will not be intersted until you sign terms with them.

alestorm

Werdnal wrote: »

The tenancy continues, you just advise the tenant in writing that you are the new landlord and from XX date the rent is payable to you.

I doubt the agent will divuldge anything to you under confidentiality - you are not yet their client and the have a duty under Data Protection not to give you any info on the tenancy. How would you like it as a tenant if the agent started giving information away to a complete stranger about you?

You should have ascertained proof of the rent payments and tenant's reliability BEFORE you followed through with the sale. Has it ever occurred that the tenant may be a pain in the bum, and LL has shifted the property on with him in situ to save the cost and hassle of eviction?

You have also been shown a tenancy agreement which was signed in 2010, and whilst it is probably that is the initial agreement, as I said earlier, it is not unheard of for LLs to hide a longer tenancy behind a "new" AST. You have just been shown an agreement - have you actually asked the tenant when they first moved in?

The current purhcase of the property is between you and the vendor (LL) and you need to deal with them for any information on the property until you complete, and even then, the agent will not be intersted until you sign terms with them.

Again, good advice, thanks.

Regarding the AST / possibility of a longer agreement, no I haven't actually asked when the tenent moved in as I thought the AST would be enough. I hadn't realised there were potential pitfalls of this nature. Thanks for the heads up

I realise the agent couldn't divulge much, which is why I haven't asked. I have indeed considered that the tenant could be a right pain in the bum, in this instance I've weighed up the pros and cons and it's just a worthwhile risk. The property was cheap and to allowed me to buy outright and so any hiccups such as the hassle financially and otherwise of issues like that I've factored in as part of a start up cost. I've actually budgetted for some problems so if it is smooth, that's simply a bonus and in either eventuality at least I won't have a bank breathing down my neck.

I've researched the landlord and they are getting rid of their entire portfolio, as far as I can tell anyway, of which I've bought just one, so although it's no guarentee the property isn't being offloaded for reasons of a difficult tenant, there is at least hope that's not the case

I've not gone into this lightly and I've done plenty of but i know I'm going to be learning fast over the next few months and it might not be pleasant, at least to start! It's great to know there are people like those on here who are willing to offer advice to those of us just starting out, and very grateful I am too

Cheers
Chris

G_M

alestorm wrote: »

Hi all,
....already tenanted, it is an AST which has turned to a Periodic term. The tenant has been in for 3 years and I am happy for him to continue.
then no need to do anything. the existing SPT can continue, based on the terms of the original contract

However I'm really unclear about the mechanics of the handover. Firstly there is the tenancy agreement. Am I able to simply take this over,
Yes, as above
or will I need to take a new agreement out with the tenant?
No, not unless both you, and the tenant, want to.
Then there are things gas certificate, inventory and items such as that. These will be in existence already,
Presumably you checked before buying....? These should be passed to you
but do I need to get my own.
No. (unless they are missing well, the gas certificate. Too late to do an inventory)
Then there's the deposit which at the moment I assume will be held in bond,
You assume?!! You did not check before buying? Do you even know there IS a deposit?
how is this transferred?
The seller arranges for it tobe put in your name - should have been arranged before you bought. Seller won't care now!
The property is managed by an agency at present and I've tried engaging them but as yet to no avail
what they don't want your business? Amazing!
and I'm feeling a little lost having come this far. Any advice anyone could offer would be massively appreciated
Cheers
Chris

Don't just takeon the agent because they managed the property for the last landlord. Choose your own agent. Carefully. You are already demonstrating a degree of naivity so you MUST get an agent you can trust and rely on.

The Landlord & Tenant Act 1985 section 3 says you must write to the tenants.