Long lease agreement with care agency

Landlord Discussion
1

Does anyone have experience of a long leasehold agreement with a care agency? We have been asked if we’d consider letting our property to a care agency rather than an individual tenant. They want to offer accommodation to their staff and have suggested that they could manage the tenant find process, checks etc to save us time and money.

2

Hi Tom2

Yes I know friend of mine did but the long lease agreement c was done by lawyer legally. So the tenant were responsible for all maintenance work etc and they had to return the property in same condition with all checks eg electric, gas etc

So please find a legal company who would do it.

3

Sounds like a rent to rent
Do not do it
If you do want to do it I would advise you take legal instruction from David Smith of JMW and use his agreement
There is a good course on the Landlord Law website for this scenario and you can purchase the agreement
There was recently a free webinar

4

I agree with A_A. Bad idea.

5

Thanks for the feedback so far. Please could you tell me more about why you think it’s a bad idea David?

6

Sure. My comments are about rent to rent schemes in general, but you shouldn’t think that just because its the Council or a Housing Association or even a “professional rent to rent company” it will be any better. Typical problems include:

  • using an AST agreement when its a commercial contract and the rules of an AST don’t apply
  • Amending the contract to delete or amend the forfeiture clause so that you, the landlord can’t forfeit the tenancy in the event of non-payment or a breach of contract
  • Amending the contract in other ways to add clauses that give you particular liabilities. Remember, You are not covered by consumer rights as its a commercial contract
  • Not getting an HMO licence when they place unrelated tenants in the property
  • Not paying the so-called guaranteed rent and winding up the company (which has limited liability) if you try to force them. If they do this or just surrender the tenancy, the occupants will become your direct AST tenants and even if they didn’t need an HMO licence because they are a registered social landlord, you would need one for unrelated tenants and would suddenly find yourself in breach the legislation and liable to a fine.
  • not being able to get landlords insurance for the arrangement or worse, discovering when its too late that you can’t claim on your existing landlords insurance because they don’t cover rent to rent
  • Likewise, your lender calling in the mortgage because you’ve breached their conditions of lending
  • Likewise, breaching the conditions of your lease
  • breaching planning legislation by allowing the property to be used for short lets or as bedsit accommodation
  • the rent to rent company housing tenants with a history of ASB, drug abuse, chaotic lifestyle etc and the rent to rent company wriggling out of paying for the inevitable damage to the property, (this one is very common), not to mention the neighbours ringing you up to complain every week.
  • The rent to rent company setting up an office in one of the rooms of your property and then claiming its a commercial tenancy under the Landlord and Tenant Act 1954 with an automatic right to renew the tenancy in perpetuity

Will that do for a start? Have a look at the video in the earlier link if you’re still not convinced, or speak to my brother-in-law about the problems he’s had!

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