Property Licence or Tenancy

[sam1942]

We are in the process of buying a property in the UK. The seller asked if we would let him stay in the property for a period of 3 months after the purchase was complete so that he could carry out renovations on the house he is buying. At the time this was agreed, the estate agent said that a short-let tenancy agreement would be appropriate and we proceeded with the purchase on that basis. The seller's solicitor thinks that is unnecessary and we could adapt clause 5.2.2 of Standard Condition of Sale by changing the word 'buyer' to 'seller'. Both the tenancy agreement and the licence seem to impose liabilities or risks that we did not expect and we're not sure, at this late stage, what is best.

Thanks Sam

[boxtops]

There is dup post in wrong category so Op has reposted correctly here - here is the other one http://www.theanswerb.../Question1056243.html

[chrissa1]

You are a very kind person boxtops.

[sam1942]

Yes Baldric had pointed out it was in the wrong area. So, since I couldn't see an easier way I re-entered it here.

Thanks Sam

[Postdog]

not being funny, but what does YOUR solicitor say?

[sam1942]

Thanks Postdog. I can see where you are coming from.

Unfortunately we were directed to a conveyancer who won't/can't give an opinion and when I approached a couple of solicitors they didn't want to know.

I know it seems to be a tricky one now but at the time we thought we were doing someone a good turn.

Sam

[themas]

What advice did your conveyancer give you about this? Or did you agree without consulting him? Are you actually committed yet - in other words, have you signed anything which constitutes a contract obliging you to do this? If so, did your conveyancer either draft it or approve it? Because you shouldn't have been asked to sign any commitment without the way in which the commitment was to be carried out being a part of it.

What I'm getting at here is that, if your conveyancer has been involved he has a duty of care to you & if he fails in that duty & you lose out as a result then you could make a claim against him. Thus - if he doesn't know the right way to deal with this - he should find out himself from a solicitor (at his own cost) & advise you accordingly.

If you are not yet committed you can presumably change your mind & say NO.

[sam1942]

Thanks themas for your reply and in response to your very valid points.

Unfortunately we agreed to the proposal by the estate agent, who also have a letting section - believing that we were being helpful to the Seller. That was before engaging the conveyancer who had previously acted well on behalf of another family member. Throughout, the conveyancer has distanced themselves from it, so I'm afraid we don't feel we have any comeback on them.

Since posting this query, we have found this website <http://www.landlordzone.co.uk/blog/legal-bri
efing/license-or-lease>
which says that a House of Lords ruling back in 1985 makes it clear that even if the words in documents referred to a Licence, a sole occupancy would in fact be a Tenancy.

So it looks like a Tenancy Agreement is needed.

Sam

[themas]

I agree - if you are going ahead with this then you definitely need a tenancy agreement. And be very very careful what wording is in it - don't just accept the standard wording from the agent's letting section unless you are totally sure it covers everything. (It is quite common for agents to charge the landlord for preparing the tenancy agreement. Given the circumstances here, you might want to make them get the tenant to pay for it.)

You must agree a proper market rent, get a deposit at the outset of the tenancy (which must be put in one of the deposit protection schemes) & agree the term. To protect yourself you should also give a Section 21 notice to terminate the tenancy at the end of the fixed term as soon as it starts. This means you can take Court action to get the tenant out without delay if he doesn't go at the end of the fixed term.

Another very important thing is to do a full and detailed inventory of the condition of the property on the day the tenancy starts - taking photos of any damage. This must be agreed with the tenant. On the day the tenancy ends another detailed inventory is needed, & any damage etc. caused during the tenancy (other than fair wear & tear which, should be minimal for such a short term) results in a deduction from the deposit. If I were you, I would not rely on the agent to do these inventories.

[sam1942]

Many thanks themas for your further advice.

We'll certainly take all of those points on board.

[themas]

A couple more points, in case you haven't thought of them:

1. Make sure you have the house insured.

2. What type of mortgage have you got? If it is a normal owner occupier mortgage then you may have a problem with your mortgage lender as a result of letting the house out, because buy to let mortgages are usually different.