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Expired tenancy - 8 years rolling contract!!


shaz20

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Hi everyone. 

I am new to this forum. Hello to everyone and thank you for all the great resources. I am looking for some advice from more experienced investors. 

My wife purchased a property in 2011. She found a tenant privately. The tenancy agreement was for 6 months. within a few months my wife felt the tenant was very demanding and constantly hassling her. So she decided to have a letting agent take over. The tenant refused to sign a new tenancy agreement with the letting agent. So since early 2012 the tenant has been on a rolling contract. 

The original rent was £900. This has only been increased once in the last 9 years to £950. After the "management fees" my wife is left with around £870. 

In my opinion the letting agent has not been doing his job properly. The property is in a very popular location and comparable properties rent for £1200-1300. It is a 4 bedroom property in a very popular location, with all the fundamentals and I believe it would have no problems finding a new tenant. 

Due to the fact that the tenant has been there for 9 years, has always made payment on time and has taken very good care of the property I wouldn't want to look for a new tenant. There is a big gulf between £950 and £1200. Due to the longevity of the tenant we would happily accept £1100. I would also be inclined to renew the tenancy on a minimum 12 month contract, which offers both parties security. 

I have the following questions: 

1. Are there any restrictions on the percentage we can increase the rent by? 

2. If we are unable to reach an agreement with the tenant, Can the tenant decide to dig their heels in and prolong the process?

3. Would you increase the rent? by what extent? 

4. Would you continue with the same letting agent? find a new letting agent? Self manage? (I self manage my own property and have a good range of trades contacts)

Any advice would be much appreciated? 

Thanks 

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Unfortunately you have created a situation whereby the tenant has got used to paying below market rent. As the tenant looks after the property I would be inclined to raise the rent to market rate over a number of years, perhaps by £50 per month each year. There is no need for a new tenancy and quite frankly I don't think you should be rocking the boat too hard - good tenants are worth their weight in gold.'sThe rent is low because of your wife inattention (sorry) so its not the tenant's fault. Presumeably you have not spent much on refurbishment in 9 years so really you haven't lost out that much.

The tenant can refuse to accept the increase and ask for an independent valuation, which you might win, but you risk ruining your relationship so it is much better to raise the rent in stages until you are where you want to be. Perhaps the first rise comes with a note about rent having fallen behind and due to ongoing costs some catching up is required. Certainly a void of any length of time would eat up any gain in rent rise so is to be avoided and if your tenant stopped paying the rent eviction is very tricky right now, so you need to tread lightly.

If the agent manages everything else there is no need for a change - just instruct them each year about the rent increase you require, with at least 6 weeks notice.

Be wary of Zoopla figures, they are not always accurate.

Good luck :) 

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  • 1 month later...

You ought to check that the letting agency has also protected the deposit for the whole duration of the tenancy (assuming the tenant paid one).

If that deposit is not protected, you could be taken to court and for that length of time, it could be a really hefty compensation bill.

https://tenantangels.co.uk/ handled a claim for me a while back, but they are incredibly unbiased and really only set out to balance the playing field. I'm sure they could give you advice from a landlords point of view also. Don't be put off by the fact they represent the tenant, as there are more good landlords out there than bad, and the same can be said for tenants.

 

Shame you can't lump all the bad tenants with the bad landlords and let everyone else live in harmony!

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