Tenancy in arrears - Advice needed

propertyrental

aimee_coop said:

macman said:

aimee_coop said:

RAS said:

Oh dear.

Have you read the stickie at the top of this page?  Have you ensured that all the required rules have been met, not just allowed the LA to tell you everything is OK.

Do you have consent to let or a BTL mortgage?

Do you belong to a Landlords association?

At a minimum you are going to need to budget 3 months mortgage in hand to prevent getting in mortgage arrears. Assuming that his nibs coughs up a £1 to bring it under 2 months when you issue the S8 notice. 

Yes. It's a BTL mortgage. Still, I need to cover all the mortgage payments myself if my tenant doesn't pay 

I don't belong to any landlords association. Is this the one you're talking about? 

https://www.nrla.org.uk

Maybe I should join one of these associations now... :')

So... if the tenant does pays £1 to bring it under 2 months, I need to issue the S8 notice all over again after one month, am I right?   

Yes. And then all he has to do is wait until the court date is due, pay it down to £1 less than 2 months and your S8 becomes invalid again. Rinse and repeat. If he wants, he can remain in 2 months arrears for the duration of the tenancy.
It's not enough to think that the tenancy is regularised. You need to know. It's you that is legally responsible, because you are the LL-not the agent. The fine for non-supply of a GSC is potentially unlimited, and a criminal offence. 
On the bright side, I doubt that this tenant is engaging in home horticulture. If he is, he wouldn't be drawing attention to himself by getting into arrears.
What sort of upfront fees amount to the entire first 5 months rental income?! Please don't tell us you are also locked into a 3 year management contract with this LA?
Willingness to pay above market rent and wanting a quick move-in date and not previously on the ER should have been a red light to you and the agent.

It's mainly the letting fee which takes up 8% (+VAT) of the all the rents of the 3-year tenancy and they collect it at the beginning.
And yes...it's a 3 year contact with the LA

Wow that's a great business model! At least we now have an explanation for why the agent recommended a 3 year tenancy.....

I'm afraid the agent saw you coming....

Once resolved, please read this before repeating:

Post 9: Letting agents: how should a landlord select or sack?

aimee_coop

 

SusieT

I may be clutching at straws here, but even though the (only good for them) contract with the agent is for 3 years, is it possible that the actual ast the tenant signed is for a shorter time? 

Bonniepurple

OP, I’m starting to wonder who’s side the Agency is on.  They find a tenant, lock you into the lengthy agreement and then the tenant doesn’t pay.  The Agency have got their money up front and you have nothing.  I’m nowhere near an expert, but I’ve never heard of a 3 year tenancy from the word go.  I hate to even suggest it, but I wonder if they are in cahoots (ie once the tenant is in, the agency has made sure they can’t be evicted easily).  I really hope not though.

Good luck.

RAS

propertyrental said:

aimee_coop said:

macman said:

aimee_coop said:

RAS said:

Oh dear.

Have you read the stickie at the top of this page?  Have you ensured that all the required rules have been met, not just allowed the LA to tell you everything is OK.

Do you have consent to let or a BTL mortgage?

Do you belong to a Landlords association?

At a minimum you are going to need to budget 3 months mortgage in hand to prevent getting in mortgage arrears. Assuming that his nibs coughs up a £1 to bring it under 2 months when you issue the S8 notice. 

Yes. It's a BTL mortgage. Still, I need to cover all the mortgage payments myself if my tenant doesn't pay 

I don't belong to any landlords association. Is this the one you're talking about? 

https://www.nrla.org.uk

Maybe I should join one of these associations now... :')

So... if the tenant does pays £1 to bring it under 2 months, I need to issue the S8 notice all over again after one month, am I right?   

Yes. And then all he has to do is wait until the court date is due, pay it down to £1 less than 2 months and your S8 becomes invalid again. Rinse and repeat. If he wants, he can remain in 2 months arrears for the duration of the tenancy.
It's not enough to think that the tenancy is regularised. You need to know. It's you that is legally responsible, because you are the LL-not the agent. The fine for non-supply of a GSC is potentially unlimited, and a criminal offence. 
On the bright side, I doubt that this tenant is engaging in home horticulture. If he is, he wouldn't be drawing attention to himself by getting into arrears.
What sort of upfront fees amount to the entire first 5 months rental income?! Please don't tell us you are also locked into a 3 year management contract with this LA?
Willingness to pay above market rent and wanting a quick move-in date and not previously on the ER should have been a red light to you and the agent.

It's mainly the letting fee which takes up 8% (+VAT) of the all the rents of the 3-year tenancy and they collect it at the beginning.
And yes...it's a 3 year contact with the LA

Wow that's a great business model! At least we now have an explanation for why the agent recommended a 3 year tenancy.....

I'm afraid the agent saw you coming....

Once resolved, please read this before repeating:

Post 9: Letting agents: how should a landlord select or sack?

And read up now on how you can terminate the contract. You may find that you have to give notice even before the contract ends.

london21

3 years tenancy is such a long one considering you have not let to this tenant before and do not know what they would be like.(for next time better to start with 6 or 12 months)

Is this a traditional high street agent?

Crap arrangement because they have gotten their fees and you are the one sorting out the mess.

macman

I hope you have a 3 year (at least) fix on your mortgage, because with a 3 year min term on your AST, you will not be able to increase the rent, even supposing that the tenant starts paying it.
I have never come across such a one-sided letting management contract. To collect the fee upfront for 3 years ahead is just incredible. If they were to cease trading now or in the next 31 months then you would be unable to recover any of that fee.
It's hard to believe that there isn't a break clause or a rent review clause in the contract?
I think that you should take this contract to a suitable solicitor to see if it's actually enforceable, and, if not, then terminate it.
Regarding the agent doing a drive-by inspection, maybe up the ante by asking them to book a property inspection with the tenant-which they should be doing anyway on such a long term rental. Once every 6m is not unreasonable, but the tenant must be given reasonable notice. 

propertyrental

macman said:

I hope you have a 3 year (at least) fix on your mortgage, because with a 3 year min term on your AST, you will not be able to increase the rent, even supposing that the tenant starts paying it.

It would be normal in a long tenancy like this for there to be a rent review clause (every 12 months?) . Provided the clause is properly drawn up it would be perfectly legal and enforceable.

However, with this agent? Who knows?