Extending an agreement?

I am really unsure what to do! I formally served notice on my tenant early this year, but told my tenant I would not make them homeless as I knew it would be difficult for them to find something alternative in the short term. (I rent the house considerably under market value as they are good longstanding tenants) however the mortgage rate increases mean that I now pay my tenants to live in my house as the rent is £350 less than the mortgage. It’s coming up to 6 months since the termination date and I know they haven’t yet found another house… what can I do to be fair? My only thought is that I suggest they pay an increased rent in the short term, but how do I do this legally? And as technically they do t even have a contract anymore, unless by default it continues by my allowing them to stay there past the eviction date? I don’t know where I stand legally? Would I need to create another agreement for them if I increase the rent and then that ties me in to another term?? I am wanting to sell the property as basically, I’m afraid I’m going to lose it if I can’t pay the mortgage payments. If that happens then we both lose…. But with all the new rules I’m not sure what to do to ensure I’m staying within all the legal parameters. Any help / guidance would be hugely appreciated

You would have needed to apply for a court order within 4 months of the expiry of your section 21 notice so the notice is no longer valid so you do have a periodic tenancy agreement. You can increase the rent without signing a new agreement so this seems best option and agree a date for when you will enforce an eviction and serve a new notice. As the rent is far below market rates the tenant is likely to stay indefinitely if you leave tge rent too low and dont enforce notice.

Are your tenants actively looking for another place? They won’t find a similar property for the same money. So they have to be prepared to pay more. You have been good to them but it can’t continue indefinitely. Your going to have to get tough…

Either you raise the rent to the level of comparable properties in your area (you don’t need a new contract to do this) or you seek possession through the courts which will cost you even more money and the process can take 6 months.

Good luck with whatever you decide.

Sorry to say but I think youre too soft and inexperienced for this business. Use s13 to raise the rent to market level. That will probably encourage the tenant to leave. Then sell up iiwy.

Have you had a good hard look at this on paper.
What if mortgage rates come down and you can re mortgage?
What if you evict and it takes 6 months of vacant before you get a sale?
What if you can get a fair rent inc and reduce the problem?
It’s a brutal market to sell in. However you may just have lost the love of BTL and that is a different issue.

This topic was automatically closed 90 days after the last reply. New replies are no longer allowed.