HMO tenants changing from one flat to another and the bond implications
I am selling a property. We have a buyer but he is still sorting out his funding for the property and we have been waiting 3 weeks so far for this funding to be confirmed. I have not sold a HMO before and dont know how long it generally takes in comparison to a residential property. Do you have any ideas if it takes much longer? The agent has put a sold sign up already!
The issue is that two good tenants, not related in 2 different flats have contacted me as they want to move to a different flat in this particular HMO. They have AST's and I have held their bonds prior to the new regulations. Their tenancies run out officially in July this year.
Tenant 1 - in a small flat his children visit and he wants the bigger flat which is now empty. Good tenant, pays on time. I have his Bond under the old scheme not the new set up. If I have to give him a new tenancy agreement then how do I stand with holding his 'old' bond. Does the new agreement mean that I will have to join a scheme for the bond? Technically I have held his bond for 18 months under his existing contract.
His rent will be more expensive in the new flat. He had a small rent increase in January and therefore I cant increase his rent for his existing flat until the end of the year. Does this mean that he doesnt have to pay more for the new flat if he moves (think I know the answer really but need to check it with you)
My issue is that I do not want to join a scheme now as I am selling my properties and will not be letting for a while.
Also, I do not want to be in a difficult position legally whereby I owe the tenant money because his bond is not in a scheme because of this move and ignorance on my part. Do you advise that I tell the tenant that he will have to wait until the property has a new owner and he can arrange to move under the new owners terms so that I play safe?
The buyer that we have now obviously may not get the funding and then it could take until later in the year to complete the sale so I am only trying to be fair to the tenant with his wishes but do not want to put myself into a difficult situation.
Single girl who wants the more self contained flat that this guy is in at the moment. Her rent will remain the same as the new flat costs the same as her existing flat. Her contract runs out in July but she wants to stay until next March as her job has been extended until then. I have had her bond for one year.
Same issue as above with her - ie new flat therefore presumably a new contract instead of a rolling on contract which she will have from July. The bond issue same as above is my concern. Her rent went up in January and under the terms of her existing contract I cant increase it on her existing flat until the end of the year.
I look forward to hearing from you.
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