Hi all, my husband and I jointly own and rent out a property in London. We have recently put the property into a limited company. We are the sole owners and directors of that company. I understand that I need to now change the landlord’s name on the tenancy agreement to show the company name rather than our personal names (as it is now), is that correct?
If so, OpenRent have said that the only way to do that is to end the tenancy, return the deposit and start a new tenancy (with the existing tenant) all over again, subject to a fee. This seems ridiculous. My tenant will be majorly confused and stressed by this. Why can you change tenant names online but not the landlords? Nothing about the contact itself is changing, same rent, same bank account etc. Any advice?
I have a different opinion. I have experience in buying a property with a tenant in situ. When the property transferred to me I became legally bound to serve a section 3 and section 48 notice informing the tenant that I was now the legal owner and rent would now be payable to me with my bank details and a UK address where notices could be served. It wasn’t necessary for me to give the tenant a new tenancy agreement. The original tenancy agreement was retained which obviously had the old landlords details. You can offer a new tenancy but the tenant doesn’t have to accept it. Going from personal ownership to a limited company is just a change of ownership.
I would agree with Christopher32. If the OP has opted for the rent collection service from Openrent, they would also need to request this be paid into a the company account going forward. I assume that’s possible.
come to think of it, that happened to me when I inherited my mum’s old place years ago. I’d completely forgotten about that! Also served those notices.
Is it not different in this case because it’s a ltd company rather than an individual?
If a different legal entity owns the property, then there would need to be a new contract to reflect the change. I’m sure OpenRent is not trying to intentionally make this difficult, but rather staying compliant with contract law…
Welcome Malanie11, thats interesting, how was the legal process? presume you had to transfer ownership at current value? were there taxes to pay, CGT? ( I have a similar sit) If you have a good relationship with current T, can the name change be done on an informal basis until they leave?
Please be cautious when giving advice. The word ‘Need’ is a strong word, and based upon fact. Are you confident this is fact? My ‘opinion’ is that you are wrong. I ‘believe’ a Section 3 or 48 notice should be issued as per above advice. Not sure of the difference between the two.
so I’ve just called the landlord association I’m a member of to query this. They’ve said that as long as you serve the S3 / S48 then nothing more needs to be done.
The tenancy agreement is a legal contract between the landlord and the tenant. If the landlord has formed a limited company and transfers the property into that company’s ownership, the company becomes a different legal entity from the individual landlord.
The original agreement is therefore between the tenant and the individual, not the company. If the landlord wishes for the contract to be updated to reflect the new ownership under the company, this is a legally sufficient change to warrant a new tenancy agreement.
My ‘reference’ is the Separate Legal Personality which is the foundation of much company law.
Yes, but if I sell one of my let properties to you, you are a seperate legal entity to me, but you need not issue a new contract. Serving the notices as shown above would be the procedure to notify the tenant of the change. You would inherit the rights & obligations as Landlord from me.
You cannot insist a tenant signs a new contract, but if they are happy to and this is the new Landlords preference, then thats ok.
There is a long established legal principal in tenancy law that the new landlord simply “steps into the shoes” of the previous landlord and inherits the tenancy exactly as is. I don’t believe that this would be any different for company ownership. The company would become the new landlord on the first day of its ownership. The s3/s48 notice is simply to confirm such to the tenant.
OR exist to make money not to make it easy for you.
You can change landlord name on contract with a s3 and s48 notice just Google “ section 48 notice template “ etc
Old landlord has to tell tenants about change to ast tenants have to agree new landlord has to tell tenants and provide their contact details
But not sure if the OR insurance based deposits scheme allows transfers of deposits (unlike at least one of the govt approved schemes) between landlords which you’d also need to do as it would be new landlord responsible for returning deposit at end of tenancy.
Remember transferring ownership of a property to a Co incurs stamp duty even if you own the co and it buys the property from you (sorry if obv)
Many thanks for all your replies. I’ve actually taken legal advice on this matter, and as most of you stated, a Section 3 and a Section 48 Notice are indeed sufficient. So no need to end and reissue the tenancy.
