Are all BTLs at risk of this costly mess
Discussion
There are certain properties where the fixed rent cannot be altered and the incumbent has the right to remain for life, tho' I've never heard of one where the tenancy rights are heritable.
I have an associate who likes buying these. They're always very cheap and are best if the tenant is ancient or ill or both.
There are, of course, a couple of ways to induce many of these sitting tenants to move willingly and amicably.
I take it it's not hard to figure them out.
I have an associate who likes buying these. They're always very cheap and are best if the tenant is ancient or ill or both.
There are, of course, a couple of ways to induce many of these sitting tenants to move willingly and amicably.
I take it it's not hard to figure them out.
Edited by drainbrain on Saturday 12th August 15:16
drainbrain said:
There are certain properties where the fixed rent cannot be altered and the incumbent has the right to remain for life, tho' I've never heard of one where the tenancy rights are heritable.
I have an associate who likes buying these. They're always very cheap and are best if the tenant is ancient or ill or both.
There are, of course, a couple of ways to induce many of these sitting tenants to move willingly and amicably.
I take it it's not hard to figure them out.
Almost all Regulated Tenancies ARE heritable, they can be an utter nightmare hence the low price. The succession can be to spouse or even cohabitee, so in theory the ancient tenant's grandchild could move in and the Regulated Tenancy passes to them! I have an associate who likes buying these. They're always very cheap and are best if the tenant is ancient or ill or both.
There are, of course, a couple of ways to induce many of these sitting tenants to move willingly and amicably.
I take it it's not hard to figure them out.
Edited by drainbrain on Saturday 12th August 15:16
nikaiyo2 said:
Almost all Regulated Tenancies ARE heritable, they can be an utter nightmare hence the low price. The succession can be to spouse or even cohabitee, so in theory the ancient tenant's grandchild could move in and the Regulated Tenancy passes to them!
Regulated tenancies are only heritable in certain circumstances, one being that the erstwhile inheritor is already domiciled in the tenancy. As you say, It's generally only used for spouses and cohabitees, especially when the tenants are ancient as it is less likely that children are still living with them. Moving in just to take advantage of the reg.ten. laws might not be so easy to get away with.And regulated tenancies certainly may have rent altered via the local authority's Rent Office. But I am sure that there are SOME tenancies where the rent cannot be altered.
A couple of houses I've looked at buying for investment before have had a regulated tenant in place. f
k that!
It would take a lump sum well into the thousands probably to get them to give up their archaic agreement.
Thankfully not many of these tenancies left and anyone on an AST can be hoofed out with relative ease.
k that! It would take a lump sum well into the thousands probably to get them to give up their archaic agreement.
Thankfully not many of these tenancies left and anyone on an AST can be hoofed out with relative ease.
dazwalsh said:
A couple of houses I've looked at buying for investment before have had a regulated tenant in place. fk that!
It would take a lump sum well into the thousands probably to get them to give up their archaic agreement.
Paying them to pk that! It would take a lump sum well into the thousands probably to get them to give up their archaic agreement.
s off is one way. Applying to the rent office for a rent increase may lead you to want to keep them. Or pick the ones with ancient/ill occupants and wait for them to croak. Like land banking.BUT. By far the most common way if they are old and on benefits is to offer them a far better property.
Every one of these reg.tens. has only been maintained/upgraded by the tenant, not the landlord. So most of them are dilapidated dungeons even if sometimes reasonably preserved ones.
Doesn't take much to 'persuade' the tenant/their carer/relative to shift them into something far nicer/better/more modern.As the state's paying the rent it's no skin off their nose. And one thing YOU can be pretty certain of is that they're going to be long term - probably till they die.
Edited by drainbrain on Sunday 13th August 16:57
frisbee said:
Its a pretty specific case and very one sided reporting. I don't think they were doing badly out of it, £800 is reasonable rent on a £150k house, they would have been covering the mortgage.
They saw it as a safe way of speculating on the housing market, reliable tenant etc..
There must be more to the story - the tenants were surely paying more in rent that their mortgage payments had been?They saw it as a safe way of speculating on the housing market, reliable tenant etc..
TooMany2cvs said:
.... - buying the property and letting the vendor become a tenant, known as Sale and Rent Back (SARB) - is an FCA regulated activity, anyway, so basically illegal.
When did that become illegal and, more to the point, why? Assuming no sharp practice on the buyer's part I'd have thought that could be a very satisfactory arrangement for all concerned.
drainbrain said:
TooMany2cvs said:
.... - buying the property and letting the vendor become a tenant, known as Sale and Rent Back (SARB) - is an FCA regulated activity, anyway, so basically illegal.
When did that become illegal and, more to the point, why?https://www.theguardian.com/money/2012/feb/03/fsa-...
drainbrain said:
Assuming no sharp practice on the buyer's part I'd have thought that could be a very satisfactory arrangement for all concerned.
Mmm. While I agree entirely, it's that "assuming..." where the problems started. Sell your house for a reduced amount, go onto an AST, then 6mo later find yourself with notice...Well I wouldn't hesitate to agree to a seller taking the tenancy on a property I'd bought from them BMV in order to let it out. It'd be ideal to me - unless it was evident that they'd make crap tenants. And ideal to them too in the likelihood that it was a distressed sale.
fk the FCA.
f
k the FCA. drainbrain said:
Well I wouldn't hesitate to agree to a seller taking the tenancy on a property I'd bought from them BMV in order to let it out. It'd be ideal to me - unless it was evident that they'd make crap tenants. And ideal to them too in the likelihood that it was a distressed sale.
fk the FCA.
I'm not going to condemn that attitude.f
k the FCA. But it's as well to be aware of the legalities, though, right?
TooMany2cvs said:
I'm not going to condemn that attitude.
But it's as well to be aware of the legalities, though, right?
Most definitely and thanks for the awareness (not that I've any plans to trade in the SARB market).But it's as well to be aware of the legalities, though, right?
Can't imagine any effort to flex muscle over a 'clean' sarb deal would get them anywhere tho' other than ridiculed.
TooMany2cvs said:
drainbrain said:
TooMany2cvs said:
....But it's worth remembering that the entire deal - buying the property and letting the vendor become a tenant, known as Sale and Rent Back (SARB) - is an FCA regulated activity, anyway, so basically illegal.
When did that become illegal and, more to the point, why?https://www.theguardian.com/money/2012/feb/03/fsa-...
.
"David and Sheila Harding bought their friend and next door neighbour Colin Gregory's three-bedroom home nearly 20 years ago"
hyphen said:
TooMany2cvs said:
Definitely much more to it than meets the eye.
Doesn't appear so 
If you buy a house at below market, and verbally agree that the current owner can stay as long as he wants, then you may be screwed if you later want to sell.
Otherwise no issues.
Says the original buyers bought 20 years ago - be interesting to know what they paid when they bought in 1997? With interest rates then around 8%, £800/mth would have paid £100K mortgage.
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