Rental flat dilemma

[ClawsandEffect]

(name changed for privacy).

I own a rental flat which I'm using for income. It has always had 2 tenants in it, sharing. To begin with, there were 2 friends sharing, but then 1 moved out. The tenant that is left has been there so long, she doesn't actually have a tenancy agreement and I didn't ever take a deposit from her. Her rent is low, although I have put it up a little. She's really nice, reliable and we have a nice, friendly relationship. I genuinely don't want to take the p*ss.

There have been other tenants come and go. The existing tenant, understandably prefers to live with another woman. However, this time round, I'm struggling to find another woman that wants to take on a shared tenancy. I've never really had to work at it before, but this time, it's all single men.

If my tenant ever moves out, I'm going to put the flat out to an agency. Managing it is a lot of work and I also work fulltime. The rent I could charge would be 3 or 4 times what my tenant pays.

This is the issue. The tenant doesn't pay enough to meet my expenses for the flat. She also doesn't really want to live alone, because the area the flat is in isn't a great area. A 2nd tenant keeps the main overheads covered and gives me a little profit. BUT I can't find another woman for her to share with and I'm not sure what to do now.

The flat needs quite a bit of work doing to it. If I pass the flat on to a letting agency, the increased rent will pay for the work to be done. But I feel bad for my tenant. But equally, this situation can't go on indefinitely. I'm starting to consider offering to let her rent a room in my house instead. It won't be ideal for either of us, but I don't want to leave her in the sh*t.

Any suggestions (other than the abuse I'm destined to get as a landlord!).

Talk to her. Perhaps she knows someone.
Perhaps she'd be prepared to pay the market rate for rent for the whole flat rather than lose her home.

The rent I could charge would be 3 or 4 times what my tenant pays.

except you absolutely couldn't. Not unless you evict your tenant and start a whole new contract with someone new.

There are laws about how much you can put rent up. You cannot suddenly charge a sitting tenant (even on a rolling month to month contract) 3-4 times more than they have always paid as it would be deemed an unreasonable increase.

While there is no defined 'legal limit' your tenant has to approve and agree to your informal requested increase or else you have to go to court to be given legal permission to increase. This amount has to be deemed 'reasonable' and 'fair' by a judge. A standard reasonable annual increase is usually deemed to be around 5% so nowhere near a 300-400% increase.

1. You're assuming I'm the usual bastard landlord. I'm not. I want what is good for her. We are friends. There isn't any need for me to try get heavy with her about it. She's a good person who isn't going to abuse my trust.

2. We will work together on this. She doesn't actually want to live there alone because it isn't a great area and I think she's a bit worried about it.

3. IF she moves out, the rent will be 3 or 4 times what she pays. I'm never going to want to charge her this much. Her last increase was £15 a month.

However, the fact is, this situation is unsustainable. She and I will sit together at some point (we both work really long hours and it's hard to coordinate) and work out what to do.

I just wondered if anyone had any alternative suggestions that I haven't come up with.

She should really have been responsible for covering the full rent when the last tenant moved out, and responsible for finding another tenant if she wanted to go back to paying half the rent again. You're renting out the whole flat, not individual rooms. Or if you are renting it out as individual rooms then she unfortunately has no say in who you rent the other room to, and can't dictate if it's a name or a woman.

I know you're trying to be nice, but you need to see this is a business.

I'm not 'assuming' anything... you said something, I directly quoted and informed you of the law around what you said.

You're going to get screwed as well with all these updates you are going to have to do by 2030 if your property is below par. You have my sympathy as a landlord.

Well, hopefully she'll have moved out by then. And if not, I'll be able to give her like 6 months notice or something. If the rent goes up, the updates will be affordable. The alternative would be to sell the flat, but I'd hoped to keep it as income for when I'm older.

Yes @confusedlots, I know you're right. But I honestly don't want to be one of those landlords. And she's a really nice person. Doesn't take the p1ss or take advantage. When the boiler broke she understood I was trying to sort it (couldn't find an engineer for a couple of weeks). It's her home.

Have you tried to find someone on the Mon-Fri websites? Local hospital? OpenRent?

OP didn't say she was thinking of upping the current tenant's rent by that much in any shape or form.

Sounds like OP is more than reasonable as a landlord. Too much so in fact.

I know mumsnet hates landlords, and they’re all evil etc. but you are too much the other way. You presumably don’t own a rental property to be a one person charity. Your tenant hasn’t paid a deposit, and is paying 1/3 or 1/4 of market rent?

It’s entirely inappropriate for a landlord to ask a tenant what should happen about the landlords financial plans going forward.

Ultimately, if the tenant is not even covering the costs of the flat, and is paying such a small amount of rent, she doesn’t really have the right to a)dictate whether someone else lives there too or b) dictate who they are.

You’ll probably find you’re in a bad position having no contract and no deposit in a protected scheme etc

This is wrong. You can increase rent outside the fixed term by as much as you choose unless there is a mechanism in the tenancy agreement that states how rises are to occur in which case that should be followed.

The tenant always has the option of going to a property tribunal. If the rent is the market rent the tenant will lose.

If the tenant does not agree to an increase, and there is nothing in the agreement re increases, you serve a s13 giving one month notice of the new rent and the new rent becomes due.

I wish people would not post crap about this it's misleading and stupid.

It's good that you are being a kind and reasonable landlord, but equally you're not taking your responsibilities as a landlord seriously. She doesn't have a tenancy agreement? You never took a deposit? Have you done things like a gas safety certificate, testing smoke alarms regularly etc? You admit it needs repairs. Maybe you'd be better off selling it if you don't want to do the work and manage it correctly.

Op has already indicated the tenant is on a rolling contract which is absolutely fine. It isnt necessary to have a written agreement either, although desirable for both parties. And if there is no deposit that is fine. It isn't mandatory to take a deposit but if one is taken it must be put in a prescribed scheme and the PI issued within one month.

No you can REQUEST to put up rent, you cannot just extort it.

No tribunal is going to put up the rent 400%, show me one case anywhere where this has occurred. It's a wildly unreasonable increase and the tenant absolutely would not lose that case.

You are right you shouldn't post misleading a stupid crap.

I made not one single comment on the OP personally or as a landlord.

She said 'I could' (not that she necessarily 'would' but that it was a possible 'option') and I pointed out that in fact she couldn't just do that so its not a viable option.

@housethatbuiltme oh dear. Perhaps you would be so kind as to advise where and in which legislation the increase in rent is restricted . . ..

It's actually governed by s13 of the 1988 Housing Act.

She said she could if her tenant left.

For those who like their information to be legally correct, unlike the very rude @housethatbuiltme Shelter are usually correct.

https://england.shelter.org.uk/professional_resources/legal/costs_of_renting/rents_and_rent_increases/statutory_rules_for_rent_increases_for_assured_tenants#section-13-notice-of-rent-increase

She said she could charge that if the tenant left! To other people…. you just jumped to your own conclusions without reading the post properly.

@ClawsandEffect sorry landlord myself/ why have you never just let the flat out as one unit so a single person pays the same rent as a couple or a family?? why multiple leases?? more importantly, why has the flat not been kept up to a decent living standard?????

You made a big mistake renting it as two individual rooms instead of as a whole flat. She'd find someone she wanted to live with quick enough if she was paying rent on the whole flat.

I'd give her notice, renovate and then sell or rent as one unit at market rates.

This.

You say she’d prefer to live with someone, but if you let the situation go on, leaving you short, I’m sure your tenant would be there indefinitely. She knows she’s on a fabulous deal.

Time to put you and your bank balance first and evict her.

She doesn't have an agreement because she was the lodger of the first tenant that had the flat (he asked permission for this and interviewed her with me there). By the time he left, she'd been there so long, and was clearly so reliable I didn't see the need for a tenancy or a deposit. Yes to the other requirements.

It needs work done on damp in one area (an area off the kitchen that doesn't affect the use of the flat). I've had the roof redone and taken a chimney off (leaking). It isn't that I've done nothing, it's that I can't afford the other things which need doing.

My first choice would be that she moves out. But I'm not making someone homeless. Taking her as my lodger would be the best of a bad job.

Why don't you ask your tenant if she wants to buy it? Maybe the years of below-market rent have enabled her to save for a deposit.

This is kindly meant Op, but if you charge the market rent, or just below, you would afford to keep up the maintenance.

I perfectly understand not wanting to make a person homeless, I was in a similar position, however you do need to make a profit.