Hi,
We have been letting out our 2nd home for about 2 years now. The rental contract was drawn up via openrent.
We will be transferring this home into a limited company in the next month.
1/ I would like to understand what notices, etc I need to serve the tenant
2/ Do I need a new contract?
3/ What happens to deposit protected by deposit protection scheme (also via openrent)
Thanks
@Sindhu this is a change of landlord. You have to use the relevant notices section3 and section48 to tell the tenant but the tenancy continues no new contract needed
Openrent may have a process for this contact OR support
For deposits again it’s the tenant’s £ and associated with the tenancy but OR need to know the details of the new landlord so that at the end of tenancy the new LL can deal with the return of the deposit or claiming any of it
Best
Thank you for the response.
I forgot to mention that the limited company is also ours, I.e. my husband and I will be directors. Is the process still the same?
Yes, you & your hsband are a seperate legal entity to the Ltd Company, so the process is the same. in terms of section 3 & 48 notices.
Yes the process is the same. The new Ltd Co is a different legal entity so a different Landlord. It doesn’t matter who owns it.
Section 3 and Section 48 notices.
You should probably explain to your tenant that it makes no difference to them as you own the Ltd and are still the LL.
You should also amend the LL details on the AST
Best
Thank you very much.
Can I ask a few more follow up questions please?
Openrent are saying this has to be done as a brand new contract, but advice I received was that we only need to serve the notice and original contract holds. How do I go and update the original contract without getting openrent involved? And openrent are also saying deposit needs to be returned and set up again, which is also surprising as in theory they should be able to update the landlord details?
Any advice please?
When there is a change of landlord eg a property is bought with tenants in situ, the tenancy continues and the Landlord name is changed on the tenancy agreement. There is no need for a new agreement this is well established (not least because s48 and s3 notices exist)
You can change the agreement using a deed of variation signed by yourself and tenants and guarantor. However under ‘Amend tenancy’ there is an option for ‘selling the property with tenants in situ’ which ought to allow you to change the LL details as selling to the Ltd Co with tenants in situ is exactly what you are doing
@Dan4 in OR legal dept will be able to advise If OR can provide evidence that a new tenancy agreement is needed when there is a change of LL but i think that’s not quite right.
Best
Thank you. I have now contacted OR again and they say I am free to sort out the contract myself with the tenant, but they will not be able to move the deposit under the new landlords and that I have to recreate the full contract through OR to be able to do this. Are there any suggestions on how to navigate this? I dont want to be paying OR to create a new contract and go through the hassle of getting tenants to apply, etc etc when I dont need a new contract with these notices in place. But the deposit is stuck though and I have no way of getting it out without again recreating a new contract, I even contacted the mydeposits(where this is held) and they said they cannot do anything.Any suggestions would be much appreciated.
@Sindhu well i’d check with mydeposits but i think they should be able to register that LL has changed, how do they deal with changes of LL when tenants are in situ otherwise? For Deposit protection scheme it’s certainly possible to transfer to a new LL [I did this for an non-OR tenancy].
As the deposit £ is the tenant’s £, it’s only going to be an issue if the new Ltd co wants to claim part of the deposit when the tenant leaves, and even then as you are the owner of the Ltd co, you can deal with mydeposits on its behalf.
You should be able to get the mydeposits account details for the deposit and make the change, or OR acting as your agent should be able to make the change for you - as OR manage the tenancy registration, they ought to be doing this anyway as part of updating who is the LL for the tenancy if you use the ‘Amend tenancy’ ‘selling property with tenants in situ’ option, so there may be nothing for you to do if you do that. @mod_harry or @mod_emma may be able to confirm that will happen automatically if you change the LL using the ‘Amend tenancy’ ‘selling property with tenants in situ’ option
“Changing landlord details on MyDeposits is primarily done by logging into the online member account to amend protected deposit details. If a new landlord takes over, the existing member should update the details, or in cases of agent changes, ensure the deposit responsibility is transferred. For assistance, use the MyDeposits Live Chat available Monday to Friday (8 AM–7 PM) and Saturday (9 AM–1 PM).”
Good luck