How guaranteed rent arrangement should be set up?

The agent should provide you with a commercial lease agreement and NOT an assured shorthold tenancy (AST) as the agent is not going to live in the property. Work+Travel agency will then become the landlord for the sub tenant(s) and will be responsible for the service of any notices and dealing with any breaches of the tenancy agreement. The commercial lease will generally be from 3 to 5 years and should make it clear that landlord are entitled to a guaranteed rent from the Work+Travel agency on a specified date, that the agent has the right to rent out the property, and make it clear who is responsible for repairs as well as how the lease will end.

There must be an early termination clause with the agent in case circumstances change and landlord need property back. Be aware that some agents who allow early termination may look for compensation as a result of costs involved for the unexpired term of the agreement. By entering into this type of agreement the agent landlord effectively becomes the landlord of the property or the rooms in the property that are to be let out to tenants. The agent will be managing the property and the tenants will deal with the agent directly.

Benefits to the landlord

• •Guaranteed start date of contract

• •Guaranteed rent for the length of the tenancy

• •No missed rent payments or late payments

• •No empty void periods

• •No tenant queries or management issues

• •Same day rent payments

• •Maintenance work instructed and carried out, with the internal condition of the property guaranteed (subject to fair wear and tear and usually limited to the amount of the security deposit)

Points for the landlord to consider

If you are thinking of instructing an agent to take over managing your property be sure you do the following:

•If you have a buy to let mortgage then check with your lender that you are allowed to enter into this type of arrangement

•You should also be aware that the statutory responsibilities of you as the owner cannot be transferred to the agents. Examples include gas safety, health and safety, electrical checks etc; however the agent can carry these out on your behalf

•Make sure your landlord insurance allows you to enter into this type of arrangement.

• Do agency have valid Professional Indemnity insurance?

• Will you be paid the agreed rent, even if there are void periods?

• What happens if you need your property back before the end of the agreed term?