Here is a question to the blog clinic fast track from Alex (not his real name) who is a landlord:
My question concerns a mismanaged trust in the northeast which relates to one terraced unimproved 1930s dwelling.
I want to know, please, the best method of reaching an agreement with a longstanding registered tenant who is elderly but well informed about recent legislation.
Is it feasible to agree to a surrender of the protected tenancy (by deed?) at an agreed (low) sum reflecting the poor state of repair and for original design reasons uneconomic to comply with safety requirements with a simultaneous transfer of the freehold to the tenant subject to he not making formal claim or dispute.
I am assuming a market in the investment does not exist and that inspections and other compliance is impractical for reasons of distance, Covid 19 and low return on efforts.
My solicitor is not proving to be much assistance.
The trust property was inherited and it is more important to act quickly to avoid liabilities, rather than release capital.
I am assuming that this is a tenant who has been in occupation since before 15 January 1989 and who therefore has a protected tenancy under the Rent Act 1977.
These tenants are in a very strong position as they have long term security of tenure and there are very few grounds which can be used to evict them.
They have also recently acquired new rights under the Fitness for Human Habitation legislation which I suspect may be the reason why you wish to transfer this property to the tenant.
It is possible, in that it is not illegal, for a transfer of title to be agreed as you suggest. However ‘agreed’ is the critical word.
Your tenant may not be willing to agree. He may not want to own the freehold – perhaps for the very same reason that you want to get rid of it – because he doesn’t want to be responsible for the upkeep. This is quite common with protected tenants.
In which case, there is not much you can do. If your tenant does not want to take ownership of the property then you cannot force him to.
The only thing I can think of is to sell the property on to someone else. There are companies which will buy up properties where landlords such as yourself are in difficulties. The problem is how to find them!
My service does not involve buying and selling property so I am not in a position to help you find a suitable buyer. But here are some suggestions
- You may want to try posting on Property Tribes as they have a lot of landlords there who may be able to recommend a suitable company.
- It sounds as if your solicitor does not know of anyone, but maybe there is a local Landlords Association in your area which could help you find a buyer? Or a local branch of the National Residential Landlords Association.
- You could also try searching on the internet. I have just done a search with ‘I want to sell my tenanted property” and found two companies who say they will buy tenanted properties from landlords.
Note that any company willing to buy the property will almost certainly be looking for a ‘below market value’ purchase, so the sale price will inevitably be pretty low, but you say you are not concerned about realising capital.
Hopefully, those suggestions may help. Also if anyone reading this post knows of a suitable company who could take the property of Alex’s hands, maybe you could post a comment below.