Buying to let.

[Khandro]

What are the pitfalls of buying a property to let in the UK, and who pays the community charge, the owner or the tenant? Please.

[sandyRoe]

Credit is tight now. A buyer might need to find a 30% deposit. The rental income would hardly meet the interest payments of the loan. Tenants might not pay their rent. They could also do a lot of damage to the property leaving the landlord with expensive repair bills.
The tenant pays the community charge, I think.

[Khandro]

Thanks, I wouldn't need a mortgage, could buy outright. Isn't a returnable deposit by the tenant the norm?

[Buenchico]

The occupier of property normally has to pay the council tax. However the owner has to pay if the occupancy is only temporary (e.g. 'holiday lets') or the property is classified as a 'house in multiple occupation' (HMO). The definition of an HMO is vague; see here:
http://www.landlordzone.co.uk/HMOs1.htm

(There are also a few other situations where the owner has to pay the Council Tax but they're unlikely to be relevant to you. For example, the owner is liable if all of the occupants of the house are under 18, if the house is occupied solely by asylum seekers or if the property is classified as a care home, hospital, hostel or women's refuge).

Pifalls?
Tenant who wreck the place and then disappear. Tenants who don't pay their rent and who prove difficult to evict. Periods without any tenant (and hence no income from the property). Failing to ensure that all of the relevant regulations are complied with (e.g. annual gas safety inspections). etc, etc!

Chris

[redcrx]

the leaseholder would pay the management fee if thats what you mean by comminity charge. Its the owner that would benefit from building works and maintenance on the property.

[Buenchico]

Deposits must, by law, be paid into an approved scheme (or the landlord can retain it but pay an insurance policy instead). See here:
http://www.direct.gov...g/Tenancies/DG_189120

[Buenchico]

The Community Charge hasn't existed since 1993, when it was replaced by Council Tax.

[nungate]

We live in a privately rented house and we pay the community charge not the landlord - it's just the same as any other household bill. If you are planning to let you will have to decide on unfurnished or furnished (ours is unfurnished) and we did pay a deposit which will be returned at the end of our let - assuming we haven't damaged the property. The landlord is liable for all repairs and so on, but there is landlord insurance available these days to cover such costs.

[tamborine]

If the tenant doesn't meet service charges (gas/electric/water) the owner becomes liable; its for the owner to chase tenants for debts.

Hold back returnable deposits till debts are cleared.

[ChuckFickens]

"If the tenant doesn't meet service charges (gas/electric/water) the owner becomes liable; its for the owner to chase tenants for debts."

Eh? how can that be possible!

So if I change my gas supplier to supplierA and then fail to pay the bill how does the owner of this property suddenly become liable for a debt they have never entered into a contract over?

[boxtops]

is the Community charge still levied in Scotland?

[tamborine]

I've just settled the gas debt from my previous tenant and was served with bailiffs. The tenant has gone awol

[tamborine]

chuck, the service is used from landlords property - that's what the gas lot told me.

[ChuckFickens]

With respect then, you have been foolish, the debt should not have been your responsibility.

The utility bills should have been registered to the tenants name in the first place, the bailiffs shouldn't even know who you where, and even if you were silly enough not to register the bills in the tenants name then a proper tenancy agreement would be enough to prove that you were not in occupancy when the bill was incurred and it was therefore not your responsibility.

I suggest you seriously look into the terms and methods you are using to let properties.

[tamborine]

My tenant informed the Gas company I was the owner.

[Buenchico]

Tamborine:
If you signed the contract for supply with the gas company, and then told the tenant that they were responsible for paying the bills, the gas company were correct in expecting you to pay. (They can't take responsibility for arrangements which exist between you and someone else).

However if the tenant signed the contract for supply then you're not responsible for paying the unpaid bills.

[tamborine]

Tenants make their own arrangements for the services as contracted. Bailiffs on me were the gas company's final decision.

I've never had a gas contract on said property as have never occupied it.

[ChuckFickens]

Those bailiffs couldn't have believed their luck! you paid a bill you never had a contract on?

(regardless of the fact that nobody ever has a contract with a bailiff, which they don't like when you point that out to them)

You caved in too easily, the bill wasn't your responsibility.

Anyhow, this is off topic, apologies to Khandro.

[Buenchico]

For Tamborine (with apologies to Khandro):

Bailiffs can't act unless
(a) a court has issued a CCJ against you ; AND
(b) you've defaulted on the terms of that CCJ ; AND
(c) the court has then issued a warrant of enforcement.

Since no court would issue a CCJ against someone who had never entered into a contract for services, I fail to see how bailiffs can have threatened to act. (Some debt collection firms are also bailiffs but that doesn't give them bailiffs' powers without the necessary court orders).

[Khandro]

Thanks for the response. For community charge i must mean council tax, and it sounds like who pays varies. I am thinking of buying a UK property that I might want to live in myself sometime in the future, and in the meantime gain some income from. I asked for pitfalls, and you gave them! it does sound fraught with danger. What would be the most sensible way to minimise this?