Landlords who want to go down the rent-to-rent route – by which someone lets a property, but then sub-lets it at a profit – are being urged to check with their lenders that the practice will be allowed.
The warning follows our story last week on the rent-to-rent phenomenon – which drew, to put it mildly, a mixed reaction.
Some lenders, including The Mortgage Works, will not allow sub-letting, although BM Solutions does permit it.
There are also concerns that a standard Assured Shorthold Tenancy Agreement is not the right document for a rent-to-rent arrangement, while concerns have also been raised about the situation regarding tenancy deposits.
At the weekend, the Sunday Times ran a story under the headline “Tenants hit by new rent rip-off scandal”.
The story drew attention to an agency called Unida Place, run by one of the chief exponents of rent-to-rent, Daniel Burton. Unida Place gets some unusually bad reviews on the Allagents rating website.
http://www.allagents.co.uk/unida-place/
The Sunday Times story:
http://tinyurl.com/ltj68q3
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Comments
Giving a licence doesn't make it a licence, it is still an AST. It is what it is, and calling it a licence doesn't make it one, so the tenants have full protection from eviction under the 1988 Housing Act, its that they are duped into believing otherwise.
I agree with this article and also the comment from Industry Observer. I'm not sure whether I can post links here but I have recently produced a detailed report on the contract issues. To find it just search Google for "Rent2Rent Contracts"
Almost all R2R schemes are at best dodgy, and at worst simply illegal.
Wrong tenancy agreements, no capacity to let anyway, against lender consent , no LL knowledge of the arrangement, no agent knowledge of the arrangement, unauthorised sub-letting, R2R operator unable to get vacant possession against occupiers because no mandatory possession available to them
to name but a few!!!