Change to Tenancy Agreement

Fishmarket

My landlord is dispensing with using a letting agent and wants me to sign a new tenancy agreement. This includes the following paragraph which is not in the current agreement:

To pay and indemnify the Landlord against and/or reimburse to the landlord any VAT or tax of a similar nature that may be or become chargeable in respect of any payment made by the Tenants under this Agreement, or any payment made by the Landlord for which the Tenants must reimburse the Landlord under this Agreement.

Can anyone advise me on the implications of this addition.

Pixie5740

You don't need to sign a new tenancy agreement just because your landlord has binned the letting agency. Your contract has always been with the landlord and so letting agent or not it continues as it always has done.

As for the clause I'm not entirely sure what it means but a quick Google search shows that it's a clause on the AST agreement given on the .gov.uk website.

G_M

Is this the only difference between the agreements? Are the dates the same?

As Pixie says, the existing agreement remains in force so does not need changing.

Now, if the existing agreement is due to end in, say, a month, and the new one is for 12 months, you may want to sign up to the security of another 12 months in the property. In that case understanding the clause is important.

As I don't fully understand it, I hesitate to advise. But I assume VAT would only be relevant if the landlord was registered for VAT ie it's a registered company with a turn-over above the VAT rate.

If the tenancy agreement is in the name of an individual, VAT would not apply (I don't think - I'm not a tax expert!)

martindow

Anyone running a business has to register for VAT if their turnover is above a certain figure currently £83k although you can voluntarily register if you wish.

I would be very wary of this clause. It seems that if your LL registers for VAT your rent will be subject to VAT and will increase by 20%.