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Start of a Tenancy (Wales) | Sub-letting/Assigning Tenancies (Wales) | Wales

Can my student tenants sub-let to friend as a lodger, who can’t provide guarantor?

29 Dec 2020 | 1 comment

Hi Adrian,

I have a group of 3 student prospective tenants who have put a holding deposit down on one of my properties. One of the tenants is from Asia, currently living in Brunei on placement, and we now find cannot give us a suitable guarantor (over 25 and UK property owner). We’ve asked the parents of the other 2 tenants if they would act as guarantor but they won’t. The tenant can’t pay the year’s rent in advance either.

I’ve recommended that the 2 sign an AST for the house, and the international student applies to the university for a guarantor, but they don’t open applications until 25/1/21. I need to sign them up now as the holding deposit time runs out in a couple of days (or extend by mutual consent but I don’t want it to drag on too long and me miss the student letting season!)

Should the international student be successful with the university guarantor, then I am happy to re-sign a new contract with the 3 of them on.

If the university won’t provide one, can he be a lodger for the other 2 instead? What rights would he have and would there be a possession issue if he failed to move out at the end of the 12 months fixed term but the other 2 did? (I always serve s21s but this wouldn’t apply to lodgers? Am I right?) Is the lodger agreement between the tenants or is there anything I’d need to sign?

Hope you can point me in the right direction. They seem a really nice group and I’m trying to do everything I can to sign them up, but I’m not going to expose the other tenants and guarantors, and ourselves, in the case that he takes off mid-tenancy leaving us all with the liability – as with no UK residence or UK Guarantor we’d be stuffed!

Thanks as always!

 

 

 

Answer

1 Comment

  1. guildy

    You are right to be concerned.

    The problem as you suggest is if the lodger remains after the others have left. How do you get possession?

    If they are a true lodger, in theory it should be relatively straightforward as they will have little protection.

    However, we don’t believe that would be the reality here. The reality is that making them a lodger could be seen as a sham and in fact they are a tenant by another name. This is evidenced by the actions taken up to now (taking a holding deposit, negotiating a tenancy etc.)

    The court would likely find that they are in fact a tenant and not a lodger in which case all the usual rules would apply. But, you’d be in a worse position because accelerated possession wouldn’t be available (no written agreement with their name on it).

    Although an assured shorthold tenancy offers the tenants a lot of protection, at least as landlords we know where we are with an AST and the procedure needed. For a case like this it would be very difficult to know what the correct procedure would be to get them out if it all went wrong.

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