PDA

View Full Version : Tenants reluctant to sign contract? any advice



ch1
10-02-2010, 19:08 PM
I have a house that I let on shared contract between 3 people. About 4 months ago 2 tenants that moved in a so we just a written agreement with them agreeing to stay a minimum of 6 months incase a 3rd tenant was not found.

Recently, a 3rd tenant (that they suggested -a work colleague) has moved in, so I drew up a new contract and Inventory, however the previous 2 are relunctant to sign it. Nobody has signed it yet. They are worried they may have to stay longer. As they are from outside UK they will be returning back to their countried as soon as their work contract ends mid May, so do not want to stay any longer.
The 3rd tenant wants to stay 2 weeks longer than the original 2, which is no problem as the contract can run periodic. I have issued a 4 months contract for them all, but none of them have signed it.

How can I enforce them to sign it. Or do I issue an even shorter contract 3 months to satisfy the former two T's who wish to leave earlier. I have a deposit from them but it is not protected yet as no contract and the shared contract states the combined deposit (the previous written agreement states nothing relating to deposit) 3rd T only came a couple of days ago. If a deposit is taken and there is no contract does it still need to be protected?

This is a mess as you can see, I am having language difficulties with these T's as they seem to think they will become trapped by signing a contract and seem happy to stay on with written agreement we had 4 months ago, stating they will stay a minimum of 6 months. We have agreed to talk, but still not sure whether they will sign to a contract or not? Any thoughts on best way to go about this?

jeffrey
10-02-2010, 19:10 PM
But why did you knowingly/willingly create such a mess in the first place? Doing everything properly would have avoided it!

ch1
10-02-2010, 19:12 PM
Thank you.

At the time only 2 T's were found who wanted to move in, I should have waited till all 3 were found.

Thanks for your input.

jeffrey
10-02-2010, 19:21 PM
I have a house that I let on shared contract between 3 people. About 4 months ago 2 tenants that moved in a so we just a written agreement with them agreeing to stay a minimum of 6 months incase a 3rd tenant was not found. Recently, a 3rd tenant (that they suggested -a work colleague) has moved in, so I drew up a new contract and Inventory.

At that stage, what happened to Agreement1 as far as you and they decided?


The previous 2 are relunctant to sign it. Nobody has signed it yet. They are worried they may have to stay longer. As they are from outside UK they will be returning back to their countried as soon as their work contract ends mid May, so do not want to stay any longer. The 3rd tenant wants to stay 2 weeks longer than the original 2, which is no problem as the contract can run periodic. I have issued a 4 months contract for them all, but none of them have signed it. How can I enforce them to sign it?
You cannot force anyone to sign anything.


Or do I issue an even shorter contract 3 months to satisfy the former two T's who wish to leave earlier.
Again, don't make even more of a mess.


I have a deposit from them but it is not protected yet as no contract and the shared contract states the combined deposit (the previous written agreement states nothing relating to deposit) 3rd T only came a couple of days ago. If a deposit is taken and there is no contract does it still need to be protected?

There is a contract, whether oral or written, and you have screwed-up by failing to protect the deposit. Do it at once.


This is a mess as you can see.
Yes, I had noticed something of the sort.

Preston
10-02-2010, 19:21 PM
It is possible to create a periodic assured shorthold tenancy with a right for the tenant to give notice whenever they wish, even before the expiry of six months.

ch1
10-02-2010, 20:18 PM
At that stage, what happened to Agreement1 as far as you and they decided?

The written short agreement with first 2T's was they will rent for a minimum of 6 months if 3rd T is not found. The 6 months ends next month. I had always told them the property was 3 persons and would have a shared contract which they didn't seem to mind.

They found me the 3rd T just now, so I drew up a contract immediately, but there is some apprehension with original 2 wanting to sign it as they do not wish to stay after mid May.






Again, don't make even more of a mess.
There is a contract, whether oral or written, and you have screwed-up by failing to protect the deposit. Do it at once.




I have only just received a deposit from 3rd tenant who just moved in- who has no written agreement or contract of any kind, so to protect everyones deposit do they all need a contract? or will a deposit with no written agreement do? I have a contract prepared that states the sum of all 3 T's combined deposit, as the aim from the start was for it to be a shared tenancy agreement between 3 people, the original 2 T's were informed of this.

If the original 2 T do not wish to sign a tenancy agreement for 3 or 4 months, then what about the 3rd tenant? I need something in writing for this T?

I guess I have 2 options 1) leave current agreement as it is with 2 T's or
2) explain them the new contract and if they understand they are not being tied down into renting any longer than the originally wished, they may be fine with this. Actual prob is with 1 T s/he has been difficult from starts eg repairs/viewings wants them done, then only when s/he is there? which doesn't always work.
3) Issue a written agreement for 3rd T -as nothing in place

All they are worried about is getting their deposits before the day they leave. As they leave UK so once protected I'd have to request it before they actually left if DPS takes 10 working days to repay into bank accounts only -as they close they bank accounts too! I had this prob. with my last T's also from other countries leaving the UK -asked DPS and they said if T doesnt mind get deposit paid into my bank account which I did and then returned back in cash in full to T's ..looks like once protected all 3 deposits I'd have to do the same. These T's are actually not worried about deposit going to DPS and happy for me to keep it but I know that is not correct and was waiting for 3rd tenant to issue the shared contract.

Snorkerz
10-02-2010, 22:10 PM
Can I clarify, you are intending to issue a joint tenancy to 3 people who don't know each other? Presumably with joint and several liability?

Can I also clarify if the property complies with the (non-licenceable) HMO regulations? I am not 100% sure on this but if it doesn't, I suspect you would never be able to serve a s21 notice on them if you needed to.

ch1
11-02-2010, 05:00 AM
Can I clarify, you are intending to issue a joint tenancy to 3 people who don't know each other? Presumably with joint and several liability?

Can I also clarify if the property complies with the (non-licenceable) HMO regulations? I am not 100% sure on this but if it doesn't, I suspect you would never be able to serve a s21 notice on them if you needed to.


The 3 people do know each other, it's just that 2 moved in at start and their friend moved in just now.

I checked this out with my local council, who informed me it was not a HMO property. Also under this shared tenancy the T is responsible for council tax (however students, foreign language teachers etc are exempt). I will check again if any criteria has changed within the last 1-2 years?


I actually bought this property from a Letting agent who used to rent it out in exactly the same manner as I am doing i.e to use a joint shared tenancy, where T's usually students are liable to pay a joint rent (it may be per room basis. I have rented it out before using such a joint contract, except on this occassion 3 T's were not found at the beginning and they were keen to move in and I was keen to get T's i.e some rent, hence this situation.

It's just the 3rd T I am concerned about -as they have nothing in writing.

Bel
11-02-2010, 07:12 AM
What you should have done either :

Issue separate AST to each occupier of room so they can make their own arrangements and you can re-let as necessary

Issue joint AST at full 3 person rent to two people. Allow them to take 1 lodger who pays rent to tenants. They must evict lodger before they leave though.

If you have accepted rent or deposit from the 3rd tenant he is probably your tenant, and not their lodger.

Snorkerz
11-02-2010, 07:37 AM
I checked this out with my local council, who informed me it was not a HMO property.It is a HMO - probably not a licencable HMO (hence the councils disinterest), but definately a HMO.


source (http://www.derby.gov.uk/Housing/Housing+Standards/03HousesinMOandLicensing.htm) Under Section 254, an HMO is a property let to 2 or more ‘households’ that share kitchen and/or bathroom facilities. Household in this context means a person or persons of the same family or other prescribed relationship, such as carer. Two person house or flat shares are excluded, so if you rent or let property with three or more tenants who form two or more households, it is an HMO. Therefore, most students lets, professionals sharing, buildings containing bed-sits or non-self contained flats or indeed any other dwelling with three or more unrelated tenants sharing facilities is likely to be an HMO.


Also under this shared tenancy the T is responsible for council tax .

Yes, that is perfectly legit if you are using a single tenancy agreement for the whole property - not if you issue individual ASTs.

I'm not meaning to be critical, just want to make sure you don't end up in any sort of major trouble. These tenants may not know their rights due to their overseas status, but a 'professional tenant' (ie one who makes money out of being a tenant) could cause you considerable difficulties.

ch1
11-02-2010, 08:12 AM
It is a HMO - probably not a licencable HMO (hence the councils disinterest), but definately a HMO.





Yes, that is perfectly legit if you are using a single tenancy agreement for the whole property - not if you issue individual ASTs.

Yes, it is only a single joint tenancy between T's.


I'm not meaning to be critical, just want to make sure you don't end up in any sort of major trouble. These tenants may not know their rights due to their overseas status, but a 'professional tenant' (ie one who makes money out of being a tenant) could cause you considerable difficulties. Thank you, you are right. Fortunately so far all my T's whether students or from overseas teaching type's have been fine. Their only worries have been to get deposit back before they leave as they tend to close UK bank accounts i.e the method by which the DPS return deposits.

I'm thinking whether to return all T's deposits, I don't envisage any probs. and it seems because 2 T's moved in first and 3rd T (who all know each other) later the fact that i want to issue a new shared tenancy contract between all T's now i.e from current date if all ok i could retain deposit and protect asap as only just received it from last T. If all T's not in agreement to a new shared tenancy return all deposits and do what? As last T has no written agreement -when I went to property to meet this new T he was already there with all luggage! I thought I would just be meeting him to check rent/ etc ok and then get the contract ready with all T's approval.

I think I just followed on from what the Letting agent was doing for years with this property i.e letting it as a joint shared single tenancy agreement between all T's -so LL is not responsible for council tax. Its mainly been students on these kind of tenancies or foreign teaching workers who are exempt from Council tax under the Council lists of people who are exempt.

jeffrey
11-02-2010, 10:21 AM
Also under this shared tenancy the T is responsible for council tax.


Yes, that is perfectly legit if you are using a single tenancy agreement for the whole property - not if you issue individual ASTs.
1. That's not so. L and T can, in the Letting Agreement, make any arrangements they like re who is liable for C/Tax.
2. What L and T cannot do, however, is bind the Local Authority to those arrangements; statute law decides to whom the bill wil be addressed.
3. If the addressee is the 'wrong' party, according to the Letting Agreement, the addressee:
a. still has to pay the Local Authority; but
b. has a right of recourse against the other party.

Snorkerz
11-02-2010, 12:53 PM
1. That's not so. L and T can, in the Letting Agreement, make any arrangements they like re who is liable for C/Tax.
2. What L and T cannot do, however, is bind the Local Authority to those arrangements; statute law decides to whom the bill wil be addressed.
3. If the addressee is the 'wrong' party, according to the Letting Agreement, the addressee:
a. still has to pay the Local Authority; but
b. has a right of recourse against the other party.I have seen this before Jeffrey. How does the authority decide who is liable in such a case? Surely, LL simply notifies that the residents are XXX from such and such a date and the authority makes the necessary entries in it's books.
I'm not saying you are wrong - just asking the Q as I don't know.

jeffrey
11-02-2010, 13:09 PM
How does the authority decide who is liable in such a case?
Start with Local Government Finance Act 1992- s.6 and s.8- re liability to C/Tax. See http://www.statutelaw.gov.uk/content.aspx?LegType=Act+(UK+Public+General)&title=local&Year=1992&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&parentActiveTextDocId=1972422&ActiveTextDocId=1972434&filesize=25118