Frequently Asked Questions - Landlords
Q:.I have a prospective tenant who wants to go into the property immediately and sort out the formalities later. Should I go ahead?
A. This is not a good idea. It can be tempting but experience has shown that you are likely to cause yourself problems in the long run. Once the tenant is in there is no incentive on him to conclude any legal formalities. There will be no proper obligations on the tenant and you may find you have given the tenant more rights than you intended or would like. In most circumstances, a good solicitor will be able to draft the relevant documentation speedily to enable a tenant to take up occupation at an early date.
Q. How can I make sure that I can obtain possession at the end of the Lease if I need to?
A: The only method that is guaranteed is to have a lease which is what is known as "contracted out" of the Landlord and Tenant Act 1954 Part II. This excludes the right of the tenant to have a new lease at the end of the initial one or from being entitled to compensation at the end of the lease. There are certain formalities which must be strictly observed.
Q. Can I or should I charge VAT on the rent?
A: This depends on the type of building and whether or not the relevant tax election has been made in respect of it. There can be advantages in a landlord being able to charge VAT but this is a complicated area and it is recommended that specialist tax advice be obtained not only on this question but also on other taxation issues relating to the property.
Q. If I think that the tenant has broken the terms of the Lease should I still accept rent from them?
A: No, not without first taking legal advice. You may otherwise prejudice your position.
Q. My prospective tenant wants to negotiate a Lease giving them a right to end it early. Is this a good idea?
A: This depends on what you feel is right for you and other commercial considerations such as market forces. However, if you agree in principle then it is probably better that the right to terminate the lease can only be exercised after a certain interval rather than be on a rolling basis. Consider making the entitlement to terminate early a mutual one so that you can also end the lease early if you want. Also making the tenant's right conditional upon paying all rent and other monies due up to the termination date and even possibly paying you some money by way of compensation for the fact that you will have to re-let the property early.
Q. If the tenant is in arrears with rent, what is the quickest way of getting payment?
A: Each case needs to be looked at on its own merits and the usual remedies such as issuing proceedings or serving bankruptcy or winding up demands may be appropriate but one method which is often very effective which should be considered is what is known as levying distress. In plain English this means instructing certified bailiffs to attend at the property to seize the tenant's goods unless they pay the arrears. The Courts are not terribly happy about this old fashioned self-help remedy and it has been suggested that it might infringe the Human Rights Act. However, for the moment on a very practical level it can often be extremely effective but do take legal advice before proceeding.
The Above information is necessarily of a general nature and should not be relied upon without appropriate advice in the circumstances of any given case. It is also subject to the disclaimer on the Home Page of this site.