A nervous disposition
The 2012 London Olympics are only a few months away, but letting agents continue their push for Olympic lets. They are anticipating a lot of last minute interest from visitors who are unable to find hotel accommodation. In addition, there is an increasing amount of publicity by companies promoting year-round “home from home” holiday lets.
Renting out your home, either with you moving out completely or simply letting out a room or two in your house to a lodger, is described as “recession-busting” both for holiday makers who have to pay significantly less than if they were to stay in a hotel, and for homeowners who are able to top-up their income by putting their home to use.
Before being drawn into what seems like a lucrative opportunity, you need to be aware of the legal implications of short-term lettings:-
You should check your buildings insurance policy to check whether temporary lettings are covered. At the very least, you may need to notify your insurer. If you do not, you may well not be insured. Some insurers are offering separate coverage for Olympic lets.
Similarly you should contact your mortgage company. Again, different lenders are taking different stances in short-term lettings. Some require simply to be notified with a nominal letting fee to be paid, some require more formal steps to be taken. If you do nothing, you may well be in breach of the terms of your mortgage.
If you property is a leasehold property, you will need to check the terms of your lease to see if short lettings are permitted. There may be a covenant in your lease completely prohibiting them. If short-term lettings are permitted, you may well need landlord’s prior written consent.
There are other practical implications of letting your house out. You can choose to use letting agents. They will vet prospective occupiers, provide formal terms of occupation including a security deposit against damage and also offer insurance. In exchange you will need to sign up on their terms and conditions which you need to read carefully and expect to pay commission of 15%-20%. Alternatively, if you wish to cut out the middle man, you need to consider what security checks you have to put into place, make provision for a security deposit and consider how to guarantee payment. Finally, as the property will be residential premises, if the occupiers do not leave at the end of the letting, you will have to go to court to recover possession. Although the occupiers would have no rights of occupation, it is a criminal offence to evict someone from residential premises unless it is done by way of court order.
There have been some (mainly unsubstantiated) scare stories that landlords have been holding back properties in order to cash in on the high rental level of Olympic lets, alternatively seeking to force their tenants to move out for the Olympic period. A lot of letting agents however, consider that the practical implications of holding back normal rental property for such short-term lettings - even with the anticipated premiums - are simply not worth it. It does however remain an attractive option for people who want to take advantage of the income potential from their own homes.
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