Rent to friend and managing agency

TheLopezOne

Hi.

i want to rent my flat to a friend for a short period for a low rate around 90% less than the market rate as they are in need for a few months whilst i move abroad for a few months. All bills are for them to pay, and I do not want to profit off a friend and its a periodic AST contract so wont be long.

I’ve got the consent to let from the bank and done all the electricity and usual required paperworks.

My lease states I do not require any consent to rent the property out but I just need to register the sublet by providing the tenancy agreement to them which I have.

They reviewed the tenancy to ensure it does not breach the lease which it doesnt, but are questioning why I am renting it at a very low price.

My question is what right do they have to question the financial arrangements I rent my property out furthermore upon checking the CTL conditions there is no minimum price to let the property nor is a prohibition to rent the property to freind clause and I can absorb the costs for a few months to help a friend out. 

 

eddddy

I'd guess that the freeholder or managing agent is just curious why you're renting it out so cheaply. Or maybe they wonder if you've made a mistake with the decimal point!

I suppose they might also wonder if it's part of some scam, and the flat might be used for dodgy purposes.


I guess you could put their minds at rest by telling them what's happening - or you can just ignore their question. It's up to you.

TheLopezOne

Thanks!

So legally they cannot prevent my tenant/freind moving in if there is no breach of the lease and what I charge is completely my choice would that be correct?

propertyrental

As above-not really the freeholder's concern
However several other factors in your post jump out:. See bold

TheLopezOne said:

Hi.

i want to rent my flat to a friend for a short period for a low rate around 90% less than the market rate as they are in need for a few months whilst i move abroad for a few months. See below! All bills are for them to pay, and I do not want to profit off a friend and its a periodic AST contract so wont be long.
No idea why you are so sure. OK- provided both you and friend do as agreed (ie he moves out when you want him to), but legally you cannot serve a S21 Notice (assuming they are not banned by the government) in the first 6 months, and thereafter there'd be several months waiting fora court date.

I’ve got the consent to let from the bank are they aware it'sa friend at reduced rate - certinly many banks prohhibit letting to family. Friends? Depends.

 and done all the electricity and usual required paperworks. Hmmm OK - provided you are sure. That's a lot of paperwork. Done a list? Want to share it with us?

My lease states I do not require any consent to rent the property out but I just need to register the sublet by providing the tenancy agreement to them which I have.
Sounds fine, but again, if you want to share the wording in your lease with us we can comment.

 

Who will the friend pay the ren to? Direct to you/your bank? Or an 'agent' (which could be a relative).

If direct to you, have you applied to HMRC to receive the rent gross, or will the friend have to deduct your tax.......

See

HMRC for overseas landlords (Non Resident Landlord Scheme)

TheLopezOne

Hi,

My friend/tenant will deduct the tax and pay the tax to HMRC every quarter and is aware of keeping records etc.

As for landlord duties- EPC, EICR, no gas in flat so no gas certificate and got the building insurance,- if i’ve missed anything please let me know.

CTL - like i said no where on the conditions does is state a minimum rent condition or no letting to friends (some lenders conditions explicitly state no family or a minimum rent of more than the mortgage etc) but will call them to clarify

But back to my question - legally the lease just says to pay an admin fee to register new tenants, no consent required etc therefore am i correct in saying they have no right in what I charge my tenant. 

anselld

Why not just answer their question and have done with it?

Annisele

TheLopezOne said:

They reviewed the tenancy to ensure it does not breach the lease which it doesnt, but are questioning why I am renting it at a very low price.

My question is what right do they have to question the financial arrangements I rent my property out furthermore upon checking the CTL conditions there is no minimum price to let the property nor is a prohibition to rent the property to freind clause and I can absorb the costs for a few months to help a friend out. 

Are they just "questioning" or are they demanding to know?

Except in very limited circumstances, anybody can ask anyone anything. I'm free to question you about your financial arrangements, and you're free to ignore me.

If they're actually demanding to know - as in, telling you that your friend can't live there unless you explain your financial arrangements - then I think one of two things is likely to be happening. Either they in fact have no right to demand the information, or their rights are contained in your lease / some other agreement you have with them.

From a practical point of view, why are you so reluctant to just tell them you're doing a favour for a friend? That might reassure them they're unlikely to have to deal with any illegality.

TheLopezOne

Thanks! 

Its not a demand but more a question from them and I will answer it but I wanted to ensure if there is no breach of the lease (which there is not) in the tenancy agreement then they cannot prevent my friend/tenant from moving in which you have kindly answered it.