Updated: Oct 29, 2020
Guaranteed Rent or Rent to Rent, as it is also known, is when a property owner or landlord agrees to allow the renter to sublet the property.
An individual or a company (an agent) will take on the property for a period of time from the landlord or owner and agrees to pay a fixed rate to the landlord. The individual or company (rental agent) then sublets the property to a tenant. This can be done legally provided the correct agreements are in place.
What are the benefits?
With guaranteed rent, regardless of whether or not the tenant living in the property pays rent or if the property is vacant, you still get paid!
The rental agent would be responsible for the following:
Payment of the rent to the landlord or owner in accordance with the agreed upon date regardless of whether or not there are tenants in the property
Finding a tenant
Payment of the utilities and council tax
Maintenance and repairs to any damage caused to the property as the renter is responsible for ensuring that the property is returned to the landlord or owner in the same condition as when they took it
Other benefits of using the guaranteed rental scheme include:
The landlord will not be charged any management or commission fees by the renter or rental agent
The landlord will have a fixed income and costs for the duration of the lease agreement
The lease period can be set to be for a period of 1 year up to 5 years, securing a set income for the landlord or owner for the duration of the rental period
There are no breaks in rent
No late or missed payments
The property owner or landlord will not have to deal with any tenant queries or issues
The landlord or owner of the property will have peace of mind knowing that their monthly income is secure and will be consistent for a set period of time and their property will be managed and maintained
No need to chase tenants for rent or to deal with any property maintenance and other issues that may arise
0% Commission - Rent paid on time every month - No rent voids - Property Maintenance
What fine print should you consider?
An agreement must be drafted and signed between the landlord and the renter (agent), the agreement will be of a commercial nature
There should be clear and definite terms and conditions with a start date and end date
The agreement should outline the responsibilities of the renter in terms of the management of the property
A Redress Scheme
A Redress Scheme is a scheme that allows consumers to escalate any complaints they may have against a member of the scheme. This is to resolve or settle complaints from consumers that have not been addressed by the member in question and the consumers have as a result suffered a loss.
In the case of a Guaranteed Rent scheme, the renter is providing a service to both the tenant and the landlord, thereby making them consumers.
Should an issue arise from either consumer (the renter or landlord) and the renter (being the service provider) fails to address or resolve the issue, then the consumer may escalate the concerns to an independent body.
The renter ultimately acts as the middle man between the tenant and the landlord and undertakes to handle the letting of the property in a correct and professional manner.
This would give both the landlord and tenant peace of mind, knowing that an industry expert is handling their affairs.
It is important that the renters join a redress scheme so as to ensure they have complied with all aspects of renting and managing properties.
Aston Pearl is part of this Redress Scheme and hence certified to offer Guaranteed Rent.