Renting flat with License agreement

CSim

Hi all,

First of all my apologies if this has been answered before but haven't seen something similar in my search on this forum.

So here I go, I'll try to keep it short.

Not long a go I've seen a 1 bed flat that was up for rent with bills included, furnished. Hence I was looking to rent something for residential use, this offer sparked my interest. So I've contacted the agency, viewed the flat, gave him a holding deposit whilst preparing all the paperwork he requested.

I've asked if he could send me the contract to read it beforehand, his initial response was that he can't do that as it's a document and I should read it and sign it on their premise. Upon further conversations he agreed to send me a general contract that they use in this sort of circumstances. All happy until I've received the contract (which is a license agreement) that refers I rent this flat for the purpose of a commercial unit Monday to Sunday. I've questioned this with the agent as the contract is more tailored for a commercial rent then a residential rent, to which the agent confirmed this is the right document as the building is registered with the council as commercial property and he can't rent it with a tenancy agreement contract. The building I believe its an ex warehouse that has been converted into residential flats on 1st floor (renting 4 x 1 bed flats) and on the ground floor there is a business operating.

I'm a bit worried in signing this as the flat itself it doesn't seem to have proper address like a normal residential would, the agent said that for post address I should write just House No, Street and Post Code without any flat number, despite the fact in the contract its been written the full address 1st Floor, Unit x, House No, Street, City, Postcode.
Also there is a clause in the contract that mentions that this agreement constitutes a license and shall not be deemed to constitute a tenancy within the meaning of the Landlord and Tenant Act 1954.

Any advice would me much appreciated,

Thank you for your time reading my post.

All the best,
Sim

theartfullodger

Agree, walk away.

But just because the paperwork says it's a licence doesn't make it so, it's almost certainly an AST. Or possibly common law tenancy if owner lives in building. (See Street v Mountford case)

Suspect owner doesn't have planning or building regulations permission to convert to the flat. Probably beats his wife also. Nor will it be registered for council tax - but when council find you'll get large bill.

Bet he's not declaring his rental income either.

Inform HMRC & council about what's happening.

HampshireH

Sounds dodgy. There is a recent post on here (I think it's this board) about someone who ended up owing 6k council tax after finding their property was registered as a commercial unit rather than residential. When the council come calling......... expensive.

I'm surprised letting agencies don't do some form of checks before advertising properties like this.

I know they are just paid to do a job but I do feel that they should be more responsible when representing as it reflects poorly on them too

CSim

Hi all,

Thank you for your feedback, much appreciated.

I've called today the council department that looks after that area and it seems that the landlord hasn't applied for license to convert the 1st floor of that building into flats. The operator mentioned that many times they are not aware.

I've noticed the contract doesn't states that the council tax will be paid by him but I've had a chat with the agent in regards with this and he mentioned that the landlord pays council tax on the whole building.

The council representative that I've spoke with said that I won't be charged any CT as it will be LL's responsibility but to make sure its written in the contract.

Is is worth asking the agent to remove the paragraphs that seems dodgy and asking to add CT to the bills mentioned.

We like the area and the flat itself but I'm a bit worried of other unforeseen problems that may occur along the way.

Many thanks once again,
Sim

greendoor665

Walk away, and report him to the planning authorities. This is not someone you want to rent from.

CIS

I've noticed the contract doesn't states that the council tax will be paid by him but I've had a chat with the agent in regards with this and he mentioned that the landlord pays council tax on the whole building.

The council representative that I've spoke with said that I won't be charged any CT as it will be LL's responsibility but to make sure its written in the contract.

Once the valuation office band it then there's a good chance you will get the backdated demand notice, avoid these situations like the plague. The wording of the contract over who pays the council tax has no effect on the actual council tax liability, that will be determined by the council based on the facts at the time when considered in line with legislation. I've seen far too many go wrong in similar cases.

CSim

Thank you guys for the abundance of information and yes you are all right, I should just walk away. i'll just call the agent to ask for my holding deposit back and look for something else.

Many thanks for your effort and time.

Sim

CIS

CSim wrote: »

Thank you guys for the abundance of information and yes you are all right, I should just walk away. i'll just call the agent to ask for my holding deposit back and look for something else.

Many thanks for your effort and time.

Sim

If it has been banded then it will show here - https://www.gov.uk/council-tax-bands

I'd be tempted to report the property to the council and the VOA.

Pixie5740

CIS wrote: »

I'd be tempted to report the property to the council and the VOA.

Me too! need more characters

SerialRenter

Definitely report it to the council. Not only for ethical reasons, but also because it'll help get your holding deposit back if the estate agents try to retain it.

G_M

CSim wrote: »

Thank you guys for the abundance of information and yes you are all right, I should just walk away. i'll just call the agent to ask for my holding deposit back and look for something else.

Many thanks for your effort and time.

Sim

This is the right decision, however:

* be prepared for an argument over your holding deposit. I will give £10 to any charity if they refund you without hassle!

* stand your ground. Make clear you are withdraing as the property is not residential, the contract is not a tenancy, and the council could cause you problems, and costs, for living there.

* then send a 'Letter Before Action' demanding your refund

* then come back here!

Finally, once you have your refund, send all the adverts, draft 'licence', other papaerwork, to the Planning Dept.