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!).

You say you don't know what to do now.

It's quite simple - you rent it to whoever can pay the rent. If that's a man, then that's how it is. Your current tenant doesn't have a say in it.

At the moment I'd just like to make enough to redecorate and sort the damp problem out.

Ask her if she would like to rent the whole flat, I would rather do that than share with a man I don't know. If she can't afford to rent the whole flat on her own she needs to help find someone to share with, accept the person you find or move somewhere else. You should have done this when her friend moved out.

I lived in a rented property for 15 years. My landlord put the rent up a little bit every year. It’s better to do this than not put the rent up for years and hit the tenant with a massive increase. Have a look at how much the rent is for similar properties in your area, it wouldn't be wrong to match that or perhaps offer a discount if she is your friend. Your friend must be aware she is paying a lot less than she should and that this can't continue. If she doesn't meet your costs you lose the property and she's homeless anyway.

I think that you are correct to try to get a time you can sit with her but I might view it as a chance to talk through options for finding someone. Possibilities would be
she leads on finding someone
you consider males but she is involved in selection
she opts to pay more, not as an increase but as paying for a greater proportion of the flat
you use one room as Airbnb

I think I'd tell her the current situation is financially unsustainable and that you want to let the flat as a single unit through a letting agent. Get an agent round to do a valuation and offer it to her on a new lease for the whole flat (it's up to her if she wants to let out the extra room).

If she can't afford it, and you like her enough to live with her, then offer her a room in your house. If she doesn't like that option either then she needs to find somewhere else.

I'm currently a tenant and have been a landlord so I see it from both sides but you need to cover your costs.

OP you say you have this flat for income... but you're not getting any as it doesn't cover your expenses. You're not a charity and it doesn't make you an awful person to expect to get a decent rent for your flat.

This woman must know what an amazing deal she's getting and it's really not for you to subsidise her lifestyle. It isn't really a wonder she's such an amazing tenant and lovely person to you when she's got it this good.

Talk to her and explain you need x amount each month and either she pays it or accepts she may have to share with somebody of the opposite sex.

And just to add... unless you were considering a lodger anyway, I think offering her to live with you is a bit bizarre... she's not a friend or family.

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.

Oh dear. This is a mess. I have no idea what kind of tenancy this now is in law, but I'd be worried that it may not be covered by the 1988 housing act.

You need legal advice about your options of getting her to leave. As a first step, contact Shelter, but ultimately you may need to engage a solicitor.

OP has explicitly stated she doesn't actually have a tenancy agreement and I didn't ever take a deposit from her.

If things turn sour between the two of them, it’s definitely a problem to not have a contract or a deposit held against potential damage etc.

The tenant has an agreement it just isn't written and it isn't a legal requirement for a written agreement. The terms of the agreement are evidenced by conduct over the period along with standard terms that are implied. Neither is it a legal requirement for a deposit to be taken.

Some might consider it foolish not to have an agreement in writing or a deposit but that's a different matter. Lots of landlords don't bother with a deposit now because they don't like the statutory framework around the scheme. It's often easier to evidence damage in court on the small claim track and get monies to cover damage and debt that way, and often fairer I might add.

If the tenancy was agreed after March 1997 it is undoubtedly an Assured Shorthold Tenancy by default. If granted before, it is more than likely an Assured Tenancy.

Assuming the former, @PrincessofWells - can she simply issue a Section 21 notice to end the tenancy?

Providing she serves the How to Rent booklet current at the time the tenancy started, had an EPC at the commencement of the tenancy, or has a new one issued at the time or before the s21 is issued and has a gas safety certificate - yes, it will be valid.

She can serve one anyway but would not be able to rely on it in possession proceedings as the s21 would be invalid.

But don't forget a s21 doesn't end a tenancy, only the court or tenant can do so.

She wouldn't cause problems if I wanted her to move out. Her reasonableness is precisely why I won't sh*t on her.

I don't really want to rent a room in my house out but I do have the space. And I suppose the income would come in handy.

The best option would be for her to find her own person to share with but she doesn't know anyone.

I'm going to give it another 4 weeks or so and after that, we'll have to have the talk.

If you had posted in say Landlordzone forums they would have crucified you, you know. 1) no contract- that really makes you a hostage to fortune, a change in your tenant’s circumstances or attitude and you can be in a whole heap of trouble if she stops paying rent and refuses to move out 2) you have accepted a situation because it lets you off the hook when it comes to doing repairs and maintenance. I get that you’re busy, I’m a landlord myself and it can be a real pain. I understand she doesn’t want a male flatmate foisted on her. Eventually a female one will be found. For Gods sake get them both to sign a proper tenancy contract and gradually increase the rent and make the necessary improvements.

@TheGander I'm sure. I'm not a proper landlord. Not sure if that's good or bad.

Once she leaves, it's going with a letting agent so I can pay for someone else to manage it.

I am a landlord so I can offer you advice from this perspective. What you need to understand that being a landlord is purely ‘business’ and not ‘personal’ - I would not be offering a room in my own home for anyone.

You need to be upfront with your tenant and tell them that the current arrangements are no longer viable.

You want to approach this in the best way possible and ‘not’ abruptly as there is no tenancy agreement in place this could cause some issues.

As you need to do work to the property; I’d be giving the tenant 3 months notice to leave so that they find somewhere else and then you can get in, get the work done and re-let it out at higher price.

If property is in a ‘poor condition’ then some letting agents will not manage the property as this could hamper their reputation.

Get it managed and ask them to sort out a second tenant. And put the rent up to cover your costs

This is really helpful @user1494050295!

I'm not sure a letting agent will take on a tenancy for one person in a shared tenancy BUT going to the agent for a chat will definitely offer a perspective for me.

To the others who are imagining the flat as a slum, it really isn't. It looked very good when I went round last week (sorting out behind tenant that had just moved out). But I know there is work to be done and it's playing on my mind.

Thank you! Mumsnet to the rescue.

Tell her to find a female tenant to take on half the flat.

@KievLoverTwo this would be the ideal, but all applications so far (and not many to be honest, I've always been inundated with applications before) have been men.