Potential pitfalls for Surrey landlords
PUBLISHED: 16:04 24 October 2017
Renting out property can be lucrative but it is important for landlords to be aware of potential pitfalls and ensure that they are up to date on the current legislation, explains Tanya Pinto, from the property litigation team at Charles Russell Speechlys LLP in Guildford.
Airbnb Sub Lets
An increasing number of cases in court involving landlords and lessees relate to Airbnb rentals. On the face of it, Airbnb lets may seem to be a good idea. The property can be let as a whole, or you can rent out a single room which is generally unused. It is a simple way to earn additional income and, with over 1000 properties in Surrey currently listed on Airbnb, it is proving to be a popular option for Surrey landlords and lessees.
Most landlords and lessees do not enter into Airbnb lets with a view to breaching the terms of their lease or to annoy their neighbours. In fact it is likely that a large number of them do not even consider their lease or other potential problems. This is a key, yet common, error.
Anyone considering letting out a flat or apartment needs to consult their lease to ensure that subletting is permitted and, if it is, to find out if there are any restrictive clauses relating to subletting.
Check the Facts
If you wish to let your property, either by way of an Airbnb property or pursuant to an Assured Shorthold Tenancy Agreement, you should consider:
• The terms of your lease
• Whether such a let is permitted under your mortgage terms and conditions
• Whether you require additional insurances
The importance of these tips should not be underestimated. Home owners letting an entire property run the risk of invalidating the terms of their mortgage - in a worst-case scenario this could result in a lender asking for full repayment. Tenants who sublet without telling their landlord risk eviction or having to pay compensation. The risks for the landlord are serious too - and it’s also worth noting that buildings insurance could be invalidated if the landlord/lessee is not permitted to sublet.
Proposed New Law: Abandonment of property by a Tenant
If you are a landlord, not only is it critical to be aware of the terms of your lease, but you also need to be aware of changes in property legislation. One change due to come into force relates to the abandonment of property by a tenant.
Historically, landlords of private dwellings rent out their properties on Assured Shorthold Tenancies. If the tenant disappears, landlords have needed to exercise caution when seeking to re-possess a property - a landlord can’t just force access and change the locks without being at risk of committing the offence of unlawful eviction.
In circumstances where there was any doubt as to whether a tenant had abandoned a property, the safest course of action was to serve Notice and issue possession proceedings to obtain a court possession order. This, of course, takes time and money.
However, when Part 3 of the Housing and Planning Act 2016 comes into force, landlords in this situation will have a process they can follow without incurring costs by issuing court proceedings.
The New Process
Where a landlord suspects that a property has been abandoned they must serve three warning notices on the tenant prior to ending the tenancy.
1) The landlord must first serve a warning notice on the tenant explaining that the landlord believes the property to have been abandoned and that the landlord intends to bring the tenancy to an end if the tenant, named occupier or deposit payer does not respond in writing within eight weeks confirming that the property has not been abandoned.
2) Two further notices must then be served at prescribed times.
3) If no written response is received, the landlord can bring the tenancy to an end at the end of the eight week period referred to in the warning notices. If you are a landlord, not only is it critical to be aware of the terms of your lease, but you also need to be aware of changes in property legislation.
A tenant can make an application to court for an order reinstating the tenancy if they have good reason for having failed to respond to the warning notices and so it is in the Landlord’s interests to make every effort to contact the tenant.
This is good news for landlords as it presents an alternative to court proceedings where the property has been abandoned and allows property to be re-let more quickly.
Charles Russell Speechlys LLP in Guildford has one of the largest end-to-end property teams in the South East. With a team of over 40 people, they are renowned for covering all aspects of commercial and residential property law, from construction and property dispute resolution to commercial real estate, landed estates and agriculture, as well as property finance work. For further information, please visit www.charlesrussellspeechlys.com.
Tanya Pinto is a qualified paralegal at Charles Russell Speechlys LLP in Guildford. For more information contact Tanya by email on firstname.lastname@example.org or telephone 01483 252575.