Here is a question to the blog clinic from Paul who is a tenant
I am about to sign an AST agreement in which the Landlord is said to be one of a couple who jointly own the house I will be renting.
a) can only one of the owners be the Landlord – and if so am I entitled to seek confirmation that the other owner has granted permission for his wife to act solely in this capacity?
b) the only reason I can think of why the owners might choose to do this is to avoid tax by declaring all the income as the Landlord’s- I am pretty sure that the man is a Highest Rate income tax payer, and the woman a Standard Rate or non income tax payer. Of course, if the man gifted his share of the house to his wife, I guess this would be a legitimate form of avoidance, but if they are joint owners, would they not be required to declare income from rent in proportion to the shares they own in the house? I do see that declaring only one owner as Landlord does not necessarily imply that the owners will not declare the income 50/50 to the taxman – but why else might they do it?
c) The house is mortgaged. Can (and should) I ask to see confirmation that the lenders are happy for the house to be let?
Checking your landlord is a good idea and something that all tenants should do.
To answer your specific questions:
a) It is quite common for one of joint landlords to be named on the tenancy paperwork.
You are generally entitled to assume that the co-landlord agrees with this. Or to put it another way, the landlord not named on the paperwork is not entitled to turn around and cancel your tenancy and evict you because their co-landlord did not tell them about the letting.
b) Its not your concern as the tenant to know or be told the reason why your landlords may want to do this. If you are right and they have done it for tax reasons, this is between them and the tax man and will have no impact on your tenancy.
Other than, I suppose, if they get caught out, the landlords getting into financial difficulties due to massive fines imposed on them by the tax authorities!
c This is a good idea. Tenants have few rights against mortgage companies repossessing properties from landlords who have failed to comply with their mortgage, other than to delay the process by two months.
You also need to be confident that the landlord will be paying his mortgage as mortgage arrears is the main reason why tenants get evicted by their landlords mortgage company.
Here are some other things you can do:
- Check out the property at the Land Registry and make sure that there are no further mortgages or charges which might indicate that your landlords are in financial difficulties
- Check out the landlords on social media sites such as facebook, LinkedIn and twitter, and
- Do a Google search against their names – you never know what you may find!
You could also pay for credit referencing, although you will need the landlords’ permission for this and it is not something often done by tenants.
Ben Reeve Lewis wrote a post on checking your landlord online here which has some good advice – make sure you read the comments also as there is some excellent guidance there.
You can also read about some of the scams around in this section of my Landlord Law site.