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    • Gillybean
    • By Gillybean 11th May 18, 2:42 PM
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    Gillybean
    Tenant wants to do some work on the house...
    • #1
    • 11th May 18, 2:42 PM
    Tenant wants to do some work on the house... 11th May 18 at 2:42 PM
    We have a house that we rent out. We purchased it with the tenant in situ, he’s been renting the house for over a decade and in the 5 years we have owned the property there’s been no issues in either side at all.

    He came to see us a few months back. Said he was due to come into a considerable amount of money and would we be ok with him doing some decorating and possibly a new kitchen and bathroom.

    So it sounds like he wants to spend a fair chunk of his own money on a property owned by us. He did suggest we might like to contribute, but nothing has been discussed since.

    I’m just concerned as to how we handle this from a legal perspective for both us and our tenant. In theory he could want to spend tens of thousands on a property he doesn’t own. If anyone has any advice or experience of a situation like this I’d be grateful for any input.

    My guess is we’d need to see a solicitor and get some kind of agreement drawn up?
Page 1
    • Pixie5740
    • By Pixie5740 11th May 18, 2:50 PM
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    Pixie5740
    • #2
    • 11th May 18, 2:50 PM
    • #2
    • 11th May 18, 2:50 PM
    The tenant is mad. You are correct in that he could spend a lot of money on a property he doesn't have a lot of security to remain in. There isn't anything you have to do legally and you can't stop the tenant from spending his own money doing up the property but it might be worth pointing out then he's only a Section 21 away from leaving the property so he'd be better off putting the money away for a rainy day.
    • Gillybean
    • By Gillybean 11th May 18, 2:58 PM
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    Gillybean
    • #3
    • 11th May 18, 2:58 PM
    • #3
    • 11th May 18, 2:58 PM
    I think he is mad too! I know he has a huge amount of money coming to him, so when he came to see us I did wonder if he was going to ask if he could buy it from us given he has been there for around 15 years and is happy there. But he said he absolutely does not want to buy it.
    • captainpants
    • By captainpants 11th May 18, 3:03 PM
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    captainpants
    • #4
    • 11th May 18, 3:03 PM
    • #4
    • 11th May 18, 3:03 PM
    Is he planning to buy new appliances? If so, he may want to take them with him when he leaves and would be entitled to do so. Pixie5740 is right - it's bizarre he wants to spend money decorating a house he doesn't own. There are two possible reasons (and I'm only speculating) - 1: He has no plans to move out anytime soon and wants to upgrade his living space. You will need to consider whether you have any plans for the house - if you are happy with him being there long term then it's understandable he might want to decorate. Sounds like he really feels at home. 2: This is slightly more off-piste but if he spends money decorating he may try to make a claim in proprietary estoppel down the line. He wouldn't be successful as you have a lease contract (I'm assuming) so that there is no mistaken belief as to his interest in the land.


    Be careful about his offer that you contribute. Is he expecting a reduction in rent if he spends money on the house? Is he going to be doing it himself (exposing you to possible DIY problems down the line) or getting a contractor?
    You need something in writing and you need a clear agreement between the two of you as to what he wants to do and how he wants to do it. Perhaps if it is time to spruce up the house a bit (if nothing has been done for 10 years) then you could work together to arrange a compromise that suits both of you.
    • Norman Castle
    • By Norman Castle 11th May 18, 4:03 PM
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    Norman Castle
    • #5
    • 11th May 18, 4:03 PM
    • #5
    • 11th May 18, 4:03 PM
    As he clearly considers it his home its not unreasonable to want to modernise it or alter it to suit although it is unusual to spend large amounts of money for something he might not benefit from. What are your plans regarding him and the property? If he expects to stay another 15 years spending money it isn't particularly unreasonable.
    Don't harass a hippie. You'll get bad karma.

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    • Gillybean
    • By Gillybean 11th May 18, 4:18 PM
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    Gillybean
    • #6
    • 11th May 18, 4:18 PM
    • #6
    • 11th May 18, 4:18 PM
    What you guys have said is what I keep coming back to also. He has lived there 15 years, 5 with us as tenants. He knows we bought the house as a long term investment and have no intention of selling. It is absolutely his home, he just does notown it.

    So I guess I can kind of understand why he wants to spend some money on it now he has the option to. He is single, middle aged, has no dependants. So why not? I do think we may well contribute something towards the kitchen if he does it as its very old. We would have replaced it ourselves when we bought the house but he said he was fine with it and did not want the disruption so we respected that.
    • franklee
    • By franklee 11th May 18, 4:18 PM
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    franklee
    • #7
    • 11th May 18, 4:18 PM
    • #7
    • 11th May 18, 4:18 PM
    We purchased it with the tenant in situ, he's been renting the house for over a decade and in the 5 years we have owned the property
    Originally posted by Gillybean
    he has been there for around 15 years and is happy there. But he said he absolutely does not want to buy it.
    Originally posted by Gillybean
    What type of tenancy is it, is there proof it's that tenancy type? What was the history of the tenant or his family occupying the property prior to the 15 years? Why was the property sold with the tenant in situ?

    It's common for a tenant on an assured shorthold tenancy to be evicted before a property is sold to open it up to the full market and get best price.

    OTOH it's common for tenants with secure tenancies to remain when a property is sold.

    Put that along side the tenant wanted to spend his own money on the property and I have to ask exactly what security of tenure does he have and what proofs to the contrary or otherwise do you have?
    • need an answer
    • By need an answer 11th May 18, 4:42 PM
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    need an answer
    • #8
    • 11th May 18, 4:42 PM
    • #8
    • 11th May 18, 4:42 PM
    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
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    • Cakeguts
    • By Cakeguts 11th May 18, 4:52 PM
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    Cakeguts
    • #9
    • 11th May 18, 4:52 PM
    • #9
    • 11th May 18, 4:52 PM
    The answer to this is no. If the property needs a new kitchen you as the landord funds it and gets the work done by your choice of tradesperson. You do not ever allow a tenant to do any work on your property. You would be responsible if he electricuted himself by having dodgy wiring fitted or by doing it himself because it is your responsibility to replace the kitchen.

    You have bought it as a long term investment but if you were unfortunate enough to die in some sort of accident it would become part of your estate and he might get an S 21 from any new owner so doing this is not in his interest either.
    • G_M
    • By G_M 11th May 18, 10:06 PM
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    G_M
    As franklee asks: what type of tenancy? AST or secure? Fixed Term? How long?


    If he's been there 15 years, then
    * yes, he clearly considers it 'home' sowants it nice- just as you and I would
    * it must surely be pretty tired by now! Certainly the paint and carpets must be well-worn.What is the state of the kitchen?


    This is you investment. It is in your interests to keep it in good condition, as well as in your interests to keep a loyal and reliable tenant happy.


    Perhaps the solution is for you to do it up, to standards you are happy with, using contractors you trust/choose, and for the rent to then be adjusted upwards to reflect the improved condition. He clearly has the funds for this, but it's a far better way than for him to invest his capital into your property.


    Alternatively, if you decide to go down the route of using his money, then get a clear written statement of



    * the work proposed (colour scheme, kitchen manufacturer/units/lay-out etc), and
    * who will do the work (DIY? N L Kitchens Ltd? etc)
    * who will bear the risks/costs for any damage done in the process
    Last edited by G_M; 11-05-2018 at 10:09 PM.
    • Slithery
    • By Slithery 11th May 18, 10:39 PM
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    Slithery
    Say yes, get him to fit the most expensive kitchen he can afford, then evict him and let to someone else for more money
    • theartfullodger
    • By theartfullodger 12th May 18, 8:38 AM
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    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
    • By FBaby 12th May 18, 10:40 AM
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    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
    • By Gillybean 12th May 18, 7:43 PM
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    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
    • By ScorpiondeRooftrouser 12th May 18, 8:01 PM
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    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
    • By G_M 12th May 18, 10:34 PM
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    G_M
    He's on a rolling AST which he signed when we bought the house.
    Originally posted by Gillybean
    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
    • By need an answer 13th May 18, 9:35 AM
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    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.
    Last edited by need an answer; 13-05-2018 at 11:18 AM.
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    • saajan_12
    • By saajan_12 14th May 18, 11:58 AM
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    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
    • By cashbackproblems 14th May 18, 12:42 PM
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    cashbackproblems
    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
    Originally posted by need an answer

    +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
    • By hazyjo 14th May 18, 1:21 PM
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    hazyjo
    Tenant's not Crashy is it...?!


    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?
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
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