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View Full Version : Letting to friends, Minimum rent required to validate Agreement?



mingernick
28-09-2011, 20:37 PM
I would like to let / allow my property to be occupied by some friends of mine. I am not looking to charge any rent from them, but I feel that it may be a good idea to have an Assured Short Term agreement between us just in case. I was wondering... Is there a minimum amount of rent required to validate an Assured Short Term Agreement?

Snorkerz
28-09-2011, 20:47 PM
In greater London £1000 pa, elsewhere £250 pa.
1988 Housing Act, Sch 1(3A)(b)

jjlandlord
28-09-2011, 20:53 PM
In greater London £1000 pa, elsewhere £250 pa.
1988 Housing Act, Sch 1(3A)(b)

Let's say the rent in below the minimum, what sort of tenancy would it be?
There could be advantages for a landlord to have a common law tenancy (no protection of deposit, possibility of notice to quit).

Snorkerz
28-09-2011, 21:13 PM
It would be, as you describe it, a common law tenancy.

I can't see any advantage being worth setting a rent so low anywhere in the country.

jjlandlord
28-09-2011, 21:22 PM
I can't see any advantage being worth setting a rent so low anywhere in the country.

Well, OP seems keen on having the rent high enough on purpose in order to reach the threshold.
So my point is that if he is happy with a rent that low there may be no advantage in having an AST.

Snorkerz
28-09-2011, 21:35 PM
Fair enough - I thought you had had a 'cunning plan'. I agree that mingernick's desire for it to be an AST - which is primarily tenant protection - is questionable. Maybe he'll come back and explain that desire ;)

ram
29-09-2011, 08:58 AM
The sure fire way to lose friends is to give them something for nothing.

You need to charge as a monthly retainer, at least the combined council tax
gas, water and electric costs ( Don't tell them how you came to this figure )

As once your friends know you want no money for staying in comfort
in your house, and no money for the wear and tear of your house, you will find
they may not want to pay for any water, gas and electric.

Who is going to pay for the water, gas and electric.. YOU ?
Can you trust them to put the utilites in their name ?

Gut feeling -- Dont do it without receiving rent, half the going rate
would cover your expences.

R.a.M.

Snorkerz
30-09-2011, 16:03 PM
If you let a property at below market rent, then the tenancy agreement has to be witnessed & executed as a deed.

section 54(2) of the Law of Property Act 1925
(2)Nothing in the foregoing provisions of this Part of this Act shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years (whether or not the lessee is given power to extend the term) at the best rent which can be reasonably obtained without taking a fine.

ram
30-09-2011, 17:57 PM
If you let a property at below market rent, then the tenancy agreement has to be witnessed & executed as a deed.

section 54(2) of the Law of Property Act 1925
at the best rent which can be reasonably obtained

However, my mortgage, if i still had the house i am quoting as an example,
would today be £ 200 per month including endowment, so I would only want
300 a month for a 3 bedroom semi detached house ( only put 2000 down )
to cover mortgage and a bit of profit, (when house prices were the "real" low
price, ( not todays overpriced )
so to cover mortgage and a bit of profit, does the law say I MUST
overprice my rent, from £ 300 to say £ 700 ?

Sounds stupid. No wonder no one can afford todays rents ! and people
have to share to be able to afford.

R.a.M.

Snorkerz
30-09-2011, 18:35 PM
However, my mortgage, if i still had the house i am quoting as an example,
would today be £ 200 per month including endowment, so I would only want
300 a month for a 3 bedroom semi detached house ( only put 2000 down )
to cover mortgage and a bit of profit, (when house prices were the "real" low
price, ( not todays overpriced )
so to cover mortgage and a bit of profit, does the law say I MUST
overprice my rent, from £ 300 to say £ 700 ?

Sounds stupid. No wonder no one can afford todays rents ! and people
have to share to be able to afford.

R.a.M.No, you can rent it at £300 - just has to be executed as a deed.

ram
30-09-2011, 20:26 PM
No, you can rent it at £300 - just has to be executed as a deed.

Thanks, ( Now,, it makes sense )