Tenant wants to do some work on the house...

theartfullodger

Agree, but the work only done by your approved suppliers and workmen, you paying, he providing all the funds: All invoices in your name. He can choose designs/colours etc but you agree/veto: i.e. no dark purple bathroom suites..

That way if there are later problems then you can (try & get ) them sorted with suppliers and tax allowances (both income & CGT) accrue to you. Might be worth quite a bit. Ain't landlord's b*st*rds?

In the circumstances I'd give him a 12 or 24 month tenancy .

FBaby

Don't do it, really don't. Of course at this point, it makes sense on both sides as it means he gets the kitchen he wants and you don't have to pay for it, but it can open so many issues, what happens if for some reasons, he decides to give notice (could fall in love with someone and decide to move with them miles away next year, as unexpected as it might seem right now), and if that's the case, he would be entitled to take the kitchen with him, leaving you with nothing (and very unlikely he would put the old one back!).

Similarly, what would you do if something happened on your side and you really had no choice but to sell. Another thing is what happens if he gets someone who does a very poor job, damage the walls or the windows?

Have you ever increased his rent? The best way really would be for you to replace the kitchen/decorate and increase the rent if you haven't done so. If you have, then you should be spending the extra money on improvements.

Gillybean

He!!!8217;s on a rolling AST which he signed when we bought the house. He is paying the same rent he has done since he moved in 15 years ago, we have no need to ask for a rise.

We are not going to let him just do this without making sure everything is done !!!8216;right!!!8217; for both parties. I think in the first instance we will have a discussion about what he wants to do and take it from there. Some kind of legal agreement will certainly need to be drawn up and we will be making sure the work is done by a reputable company.

ScorpiondeRooftrouser

I would imagine that if he turned down a renovation with you paying because he didn't want the hassle, he is only going to want one with him paying if he gets to do everything his way.

G_M

Gillybean wrote: »

He's on a rolling AST which he signed when we bought the house.

He'd be a fool to invest £thousands of his own money when his tenancy security is only as long as the next rolling period!

And you'd be exploiting him to allow that to happen.

If you go ahead with this, and using his money, then grant him a 3 year fixed term tenancy agreement (the longest possible before Execution as a Deed is required and additional tenant rights are involved).

need_an_answer

The fact that the rent is still at the level he was paying 15 years ago suggests to me that he's probably paying well under market value and whilst the OP says they are happy with the level of rent they receive I can't help but think that the root of the issue lies much deeper.

Lets look at it this way.

If as a tenant you live your life quite happily for a number of years in a property that's fine you pay your rent and you largely remain undisturbed.Your LL comes tp you one day and tells you that they are selling but there is no need to worry as the new owners will take you on as an existing tenant and everything will remain unchanged.
Great.
Fast forward a bit and indeed the new owners are keeping the arrangement going and the tenant is still paying the rent.Yes indeed nothing has changed.
The tenant hears that he's going to get a little payout and he's now in a position that hes never really been in before but he can now change something about his life,he starts to think about how he could invest his money to make his day to day life better.
He looks around the place he calls home and thinks a new kitchen and bathroom would be nice,they may not have been replaced for many years and in doing it his life will be upgraded. He can use his money that's not a problem after all he thinks of this place like his home.He just needs to run it past the LL and maybe he could also ask if they want to make some sort of contribution.Hopefully in him paying for the improvements they won't then do the undecent thing of putting the rent up simply because the house is now of a better standard.
That's why the tenant wants to fund the renovation.

He speaks to the LL they are unsure,he gets the feeling that they like the idea but they are not 100% behind it for various reasons.Clearly they have no need or desire for more rent but neither are they rushing in to fund the project.

OP as a LL I would most certainly fund the repairs yourself,that way you always remain in the driving seat with your investment.

You have a couple of options along the lines of saying to your tenant that there could be a nominal increase in rent,afterall he could now afford it and it will help to cover the outlay of the cost of renovations.
My feeling is that perhaps you are unable to fund the cost yourself easily without taking a loan or dipping into savings which you would rather not use to renovate this property at present or that actually you just don't want the hassle. Apologies if I am over stepping the mark with an assumption.

The other alternative is that you tell the tenant to book a long holiday and enjoy his money on himself and whilst he is away get the bulk of the hard and dusty work done so he can return to the property once completed.He can continue to live in place he calls home and know its of the standard he appreciates and at the rental price he has always paid.He's a very happy tenant and now plans to stay for many years and he also spent his money on something for himself and has a little bit still left over to enjoy a few more treats now and again.

From the OP's point of view as LL's they have invested their money into a property that will take them forward a good few years and have a happy longterm tenant insitu safe in the knowledge that they don't have any later challenges from anyone over the funding of improvements to the property by the tenant.

I understand the issuing of a long term tenancy and in theory agree with the concept but I still think that the amount of money the tenant wants to put into the project still outweighs the longest tenancy available.
The only way to remain in charge of your property is to fund things yourself,it is never a tenants responsibility to change the kitchen and bathroom.Even the nicest relationship with an agreeable tenant can turn sour at a later date when as a LL you allow them to overly invest their money in your property.

Save your money on "legal agreements" to ensure the work is done properly,If you spend your money you wont need the agreement.

saajan_12

From the tenant's perspective, this isn't a good financial decision as they are investing significant funds without security of reaping the benefits of their investment as they could be evicted / rent raised. However it may be a good life decision, if it improves their daily surroundings with minimal fuss / hassle of moving / responsibility of owning a property. If that's what they want, its up to them.. people can have non financial priorities in life.

For the landlord, risks include
- poor workmanship / increased problems -> only permit this if the tenant agrees to use tradespeople approved by you.
- tenant wants to take new appliances/fittings when they move -> only permit if the tenant agrees to leave or reinstate appliances / fittings of the same or better condition that you had provided they do eventually move out.
- dark/shocking colours -> specify permitted colours or only permit if the tenant agrees to revert the decor to your chosen colours when they move out.

Morally: While its not the tenant's responsibility to redecorate the LL's property, its also not the LL's responsibility to 'update' or redecorate cosmetic aspects unless there is a repair issue or fittings are no longer fit for purpose. So I wouldn't say you have a responsibility to pay here.

Of course new fittings would likely last longer before breaking, ie delaying when you would have to pay for renovations, so in return it would be fair to maintain the low rent levels. Arguably the low rent levels so far have been a favour to the tenant so any benefit to you from his choice to renovate is reasonable.

cashbackproblems

need_an_answer wrote: »

if its your long term investment and you have no desire to sell then I believe you should be the ones who fund the redecoration of the property and the upgrades.

I wonder if your tenant is politely asking for this to be done in a roundabout way,afterall it sounds as if nothing may have been done to the property in around 15 years?

The fact that he is a longterm tenant is good but there is absolutely no need for him to spend his own money on significantly making improvements to the property,thats what he pays rent for.

By all means ask his input perhaps into what type of kitchen or bathroom he wants but ultimately the decision is yours and the funding for the project should come 100% from you.

If you go down the lines of accepting money from him you open up a whole can of worms,what if the work is not done well,what if you find his choice of fittings is not to your taste/desire?

This property is your business and his home,work with him to give him what he wants but don't accept his money in any way to do the renovations.
Although that does then beg the question of is he paying market value for the property and in doing upgrades would you be pricing him out of it as a rental and pricing him out of "his home"
Maybe his thinking is that if he funds the upgrade you don't put the rent up.

Lots to think about here,but I keep coming back to the costs needing to be Bourne by you and not him

+1


the tenant is probably not of intelligent mind or aware just how much better off he would be if he bought his own place rather than pay someone elses mortgage...and then to offer to pay repairs..


He either needs to be educated or medicated.

hazyjo

Tenant's not Crashy is it...?! :think:


Another vote for doing it yourselves.


Also, I really don't get the no increase thing. It's a business. Even with a reliable likeable trustworthy tenant, why would anyone not increase the rent? As much for the tenant than themselves! If you did have to sell, is he likely to be able to afford a similar property to what he has now? Okay so a smart person might be saving what he should be paying in rent increases, but maybe he's not. Do you want to feel indebted to him, or unable to evict because either he can't afford to rent anywhere of a similar size now or because he has you over an emotional barrel re whatever improvements he's made?

Pixie5740

hazyjo wrote: »

Tenant's not Crashy is it...?! :think:

:rotfl::rotfl::rotfl::rotfl::rotfl: