Here is a question to the blog clinic from Salvina:
My mother has been renting out a 2 bedroom flat, in Hackney, above a restaurant to our sitting tenant (no contract) since 1985. He gives my mother as I call it ‘micky mouse money for the flat’.
We would like to pay him out. Legally what is the minimum we can pay him out.
We have had enough, of his complaints and poor rent he gives us.
Please help.
There isn’t a fixed amount that a tenant has GOT to accept to leave in these circumstances. It is a matter of agreement. If the tenant will not agree to accept what you offer, then he does not have to. Even if what you offer is a huge sum of money.
So far as I am aware there is only one way to get rid of a sitting tenant who is unwilling to reach agreement, and that is to provide suitable alternative accommodation. But this just moves the problem to another property as the alternative accommodation has to be on similar terms – ie be another protected tenancy.
I had a case where we did this once, but my client had to buy a new property and then we had to issue proceedings for possession on the basis that the tenant had unreasonably refused to accept it. Eventually he decided to move rather than continue defending the claim, but it was an expensive business.
You could maybe say to the tenant that you will be buying another flat to move him to and offer him the money instead so he can go and choose his own. However he may prefer to call your bluff and just stay in the property and and see what you do.
You cannot force a sitting tenant to agree to anything. All you can do is create a situation where it is more attractive for them to accept your offer than stay.
I once negotiated a £20,000 buy out for a protected tenant of 1 room in 1994.
I believe Nearly Legal negotiated £250,000 once. Protected tenancies are becoming rarer animals by the day.
On the subject of the minsicule rent, the landlord is alowed to raise the rent, albeit within the framework of a registered rent
Other issue to consider is how long is it likely to go on i.e. how old is this tenant, plus whether there is a spouse or occupying child that can inherit and take over the tenancy on the death of your tenant, albeit as an Assured tenancy if it is the child inheriting.
At least then the rent can be raised using a 13(2)notice
Sorry meant to add Tessa is right there is no formula or compunction but as a starting point what would an agent estimate the vacant possession sale value as compared to the sitting tenant value? Which brings us back to the tenant’s age and whether or not the existing tenancy can be willed to anyone – all factors that have an impact.