Help needed. 1st time landlord

Landlord Discussion
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Hi everyone, a novice landlord here. Basically, signed a contract with an applicant receiving Universal Credit because they claimed that they needed it to arrange payment of deposit and rent. The contract states the deposit and rent to be paid in advance on a monthly basis. Applicant arranged for an agency to pay what I thought was a deposit but which I have now found out was an incentive payment. The applicant nor the agency made me aware of this. The applicant has not been issued with the keys since the deposit nor the rent has been received. Is this contract valid and do I have to let them move in?

Any advice would be greatly appreciated.

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Its possible that this person was a client of social services or someone who, due to their history, would be unlikely to get a place on their own and so the Council are having to pay someone an incentive to take them. That would be a non-starter for me. If this person has not yet taken possession of the property, then they don’t have a tenancy. You won’t need to go through an eviction process and you can just tell them you’re cancelling the contract. They can of course sue you for their costs, including the return of the payment and any other costs they can dream up. If I were you I would get some legal advice to help you minimise the damage. If you’re still interesting in letting property after that, then please do some training or you’re going to get into serious trouble.

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Thank you for responding David122. Any idea who the best housing solicitors/person to approach would be for legal advice regarding this situation? I will take on board your advice regarding doing some further training.

4

join the NRLA they give good advice

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Thank you Colin3. I will look into that.

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As the Council was involved, they may try to sue you too. If they do then speak to someone like David Smith at JMW.

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Thank you David122. What can the council sue me for? Their client failed to inform me that the payment being made was an incentive. The applicant was also informed prior to the signing of the contract that I would need confirmation of housing cost rent amount, confirmation of direct payment dates and payment of 1 months’ rent and deposit before moving in. These have not been provided.

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Harry councils will LIE to you to get rid of a pestering tenant

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9

As above, its all about what you can prove, - written evidence, and the evidence the Council will point to is the signed TA. They could also question why it matters that its an incentive payment, trying to push you into making prejudicial comments about the tenant based on their history and your assumptions, possibly even accusing you of breaching the Equalities Act.

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Thank you David122. I appreciate your helpful comments. I have email exchanges stating my position. An incentive payment would mean I can do what I wish with the payment, a deposit payment would tie me into putting it into a deposit scheme. Can the council or the applicant enforce the tenancy against a landlord?

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If the tenant breaks into the property or somehow gains access, their tenancy will begin. If you don’t want that you must write to the tenant immediately cancelling the contract and giving your reasons. Phone a housing solicitor first.

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I’m wondering if you would be entitled to some of the incentive payment as they have caused you massive delays in letting the property. What I do not understand is how you learned the money they paid as a deposit was really an incentive? Did you sign paperwork agreeing to that? If so, you are buggered. But your tenants did lie & mislead you to gain a tenancy. do get legal advice.

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13

@Harry6 if you need Specialist Advice ( free ) contact (3rd party referral / service removed)

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14

The contract states I assume that tenant pays rent and deposit up front.
There’s a breech of contract right there, as the contract is broken by the tenant you could sue them and claim payments for your costs to-date.

However best to just point out to them that they have broken the contract so it can’t go ahead as it’s null and void.

Be sure to check things before moving forward.

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15

Thank you David122, Amy8, Chris10 and Chris50 for your responses.

David 122 – having taken advice the applicant has been informed that his contract has been cancelled.

Amy8 – I don’t want the hassle of claiming part of the payment. I would rather just have a clean break and move on. I learnt the money they paid as a deposit was really an incentive when the applicant’s housing advisor called me to query why he hadn’t been given the keys to the property. After informing him why he confirmed that the payment was in fact an incentive payment for me to keep. No paperwork was signed relating to this payment.

Chris10 – my antivirus software advises “your connection to this site is not secure” and “your connection is not private” to the website that you have suggested.

Chris50 – yes, the contract and emails to the applicant prior to the contract being drawn up all stipulated the requirements that had to be fulfilled before moving in. I could do as you have suggested regarding breach of contract but would all the headache be worth it? And don’t forget the applicant would probably have free representation.

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First off a cavate, all councils differ !

My local council have to date been very good.

I have received the same incentive payment as you, twice now and used it to update the property.

The council should have a department who mange this incentive and help with the tenant. The AST provided helped you receive the incentive. This is an income and taxable.

Now you need both rent and deposit

The council may also pay the deposit but here be careful as if you register it some deposit agencies will only return the payment to the tenant, not the third party. Which means you become liable. Either sort this out in writing with the council first or use a different method or registering the deposit.

If you accept rent direct from the council, write to them saying you will only accept this for rent and not be liable for any repayment of any kind where the tenant’s financial status changes. They will not like this and beware of signing anything to the contrary. So you may be better getting it direct from the tenant.

The tenant probably will not pass a credit check but do it anyway to see if any surprises pop up.

As a first time landlord you really need help and whilst a forum is helpful, as Colin has said join the RNLA. They have a host of forms and helpline. It will be money well spent and can be offset against your rental income, yes you will have to declare and pay tax, you cannot just allow your personal tax allowance to cover this.

If it’s your property you have rented you must inform the mortgage company.

There is a lot of procedure to follow to protect yourself - see the RNLA website, otherwise you will be on here in a few months asking for help re non payment and legal action

get yourself organised, its not all about getting a rental income

one last ting , get a tenant guarantor

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Thank you for sharing your experiences with the council Brian7. In my case, I wasn’t made aware that the payment was an incentive, I was given the impression that it was a deposit.

Good to learn about the complications around the lodging of the deposit and direct payment of rent from the council.

The applicant was not able to provide a guarantor. He did however, pass the credit checks.

Your post has been very helpful and given me lots of food for thought.

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Hi Harry,

I am an experienced landlord

In my opinion if no funds or keys have exchanged hands your within your rights to cancel the agreement

The property belongs to yourself and you are allowed to change your mind

If you believe that neither the proposed tenants of council have been transparent with you, I would suggest you contact both in writing and advise that you are revoking contract due to breach.

Prevention is better than cure and if first impressions count, this certainly doesn’t look good

All the best :- )

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19

Agreed Join the nrla, it is one of the best investments you will make, as soon as you have joined call their advice line and ask them what you should do. However in my opinion if your tenancy states there is a bond and rent in advance if this has not happened then the tenant has not adheared to the tenancy so it is null and void. But as said before you do any thing ask the nrla

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I totally agree plus if the council is involved dont even go there.