Do these terms protect the landlord?

[NewToRenting]

Dh accepted an overseas assignment a few yars ago, and we rented out our flat in the UK. The UK rental is managed by an estate agent, who take care of any repairs, renovations, rent collection, marketing, finding new tenants etc.

Our previous tenants just gave notice, and a senior employee in the estate agent company wants to rent the flat for his daughter, on the understanding that he will pay the rent but she will live in it. We asked for both father and daughter to be on the lease, but they have come back saying "Miss <daughter> will be tenant and Mr <father> will be guarantor".

Does this protect me as a landlord sufficiently? I am hoping someone here understands the legality of this much better than I do.

I would say there's a massive conflict of interest here. You will be paying the company to protect your interests but the tenant and guarantor are both associated with the company.

How can they act in your best interest if the tenant is not sticking to the terms of the agreement in this situation??

Do you want the daughter of the agent as your tenant?

I wouldn’t. What happens if she is a nightmare and you are relying on them to deal with her?

No, that doesn’t protect you. If he is paying the rent he needs to be on the lease, not a guarantor. You cannot have the person on the lease not be the one paying the rent.

I suspect it is being doing this way because she wouldn’t pass affordability checks or has CCJs.

I would simply say no on the basis that it is a conflict of interest.

excuse random underlining

Sorry, I should have said, the way to do this to protect you is to have him rent it in his name and have her added as a permitted occupier. She still should have criminal background etc checks.

A guarantor is a nightmare to chase down for funds. Make him responsible for the entire lease.

Even so. Don’t do it.

Thank you, I will say no, though I suspect then they will offer to put the father name on the lease.

I suspect you’ll find they have “difficulty” finding a new tenant when you say no.

Are you locked into a contract with them?

No not locked into a contract until we have a tenant sourced by them in the property. I can probably advertise the property with more than one estate agent, is that what you meant? Good idea!

It's still a conflict of interest. He can hardly do condition inspections on himself, can he? And how will they keep rent reviews and rises competitive if it's him or her living there? They won't, is the answer. They will lie about how much rents in the area have increased.

I would be going elsewhere - they’ve shown a real lack of professionalism in even suggesting it.

There is not a chance they would put that proposal to a LL for a random potential tenant.

I was thinking similar. I didn’t realise they aren’t already the managing agent.

They have shown really poor form.

Oh sorry for creating confusion. They are indeed the managing estate agents, and have been for many years. But since "their" tenants are in the process of leaving, right now I am not really contracted to them alone, IYSWIM.

In the past, we have been marketing the property solely through them, in exchange for a reduced management fee. But we can choose to market with other agents and pay a higher fee. Which is what I plan to do now.

No, it is correct that his daughter would be the tenant and he the guarantor. That is standard for all young adults, students whose parents give them the money to pay the rent. He can’t be the tenant if he’s not living there, so it is wrong to say he should be a tenant on the lease and her a permitted occupier.

Him being guarantor DOES protect you as a LL. You will get your rent income no problem.

His daughter being tenant ALSO protects you as she has to pass the usual tenant checks. You would not be protected if she is downgraded to a permitted occupier as there are NO background checks for that.

There is a bit of a conflict of interest IF the estate agents do their own property inspections. I would request that they use a 3rd party to carry out property inspections. Many estate agents already do this as a standard business practice so it’s not hard for them to set this up.

I'd just drop the current agents, and market with a different company on a new, sole agent, basis.

There is so much conflict of interest with the agency basically checking, inventoring, and paying themselves. One plus point for them: they were upfront about who the girl was.

It’s actually super common to have relatives of employees lease through the same estate agent. It’s not at all unprofessional or poor form and totally in compliance with ARLA.

The estate agents simply don’t have the property manager be her dad or work directly for her dad and use a 3rd party for all property inspections (which includes the move-in inventory and move-out inventory).

They probably are planning to do this to mitigate all conflict of interest issues. I’d just mention it to them.

A young person with a parent guarantor is not unusual

HOWEVER

Could you be confident that your agent will act properly on your behalf should you be in a position of wanting/needing to evict this particular tenant? That is the issue for me (also a landlord with managed properties) in this scenario.

Almost all estate agents also use 3rd party companies to carry out all the tenant and guarantor background checks so you wouldn’t even have to worry about them faking an affordability check pass or right to rent pass because the estate agents won’t be doing it themselves.

Really, most posters have no knowledge as to how the process works when using a professional estate agents and how it’s been evolved to eliminate conflict of interest issues.

Sounds a bit like when my children rented flats as students.

They were the tenant as lived there. But my husband were the Guarantor and actually paid the rent. Nothing unusual in that.

It shouldn’t be a problem tbh. The dad, if he’s senior, is likely ARLA certified and isn’t going to risk his professional certification by not following the law if say the OP wanted to issue a section 21. In addition, his daughter is more likely to know her responsibilities as a tenant than a random member of the public and keep the flat in good condition. Finally, as he’s paying her rent, even if she say loses her job OP will still get her rent. She’s a lower risk tenant tbh.

In terms of rent, a guarantor is 100% liable for the rent if the tenant fails to pay, but you mat have to take the guarantor to court to enforce this. However a guarantor is a reasonable protection from a tenant's failure to pay rent and theur nane doesn't need to be on the lease for that protection to be valid legally. If course it's only enforcable if the guarantor actually has sufficient income and/or capital to pay the tenants rent as well as their own housing costs. An agent would normally do affordability checks on a guarantor to check that they would be able to cough up if required. Who is responsible for those checks if the agent is themselves the guarantor?

If any othrt unrelated tenant failed to pay rent, you would be able to rely on your agent to advise you and act on your behalf where necessary because that is part of the service you are paying them for with their agency fees.

Likewise if a dispute arises because of some difficulty caused by the tenant e.g. if they break something and then insist it's your responsibility to repair/replace it but actually you think that the tenant should bear the financial cost - then your agent is supposed to be there for you to act in your interests.

You will not get any such services from your agent when the tenant is the agents daughter. The agent will prioritise the needs of and act in the best interests of their own child rather than prioritising and acting in the best interests of you the property owner.

If you agree to this, it should be on the basis of paying a heavily reduced agency fee deductions from the rent paid as you cannot rely on them to act in your interests. They can obviously still do basic things like organising the gas boiler safety check, but if maintenance is needed aren't they likely to railroad you into a more expensive option with a nicer result, for the benefit of their child, rather than the cheapest safe/robust option?

I'm a LL and I wouldn't have an issue with this. If her Dad is her guarantor and is paying the rent it will be paid on time.

The only issue I'd have with this is the agency managing the 'demands' of the tenant, with whom there is a conflict of interest. What if she decides she would like e.g. an upgraded fridge freezer or oven, or says the carpet'needs replacing' etc. Normally the agency would rule whether this was true and acceptable, but are more likely to just accept the girl's word for it?