At the time of writing this, the UK is in the unprecedented situation of being in a lock-down due to the pandemic Covid-19, which has led to a massive increase in people working remotely from home. Obviously, during this time many landlords may choose to overlook any breaches in the Tenancy Agreements but as the situation continues, we turn our thoughts to the possibility that many companies may choose to continue homeworking AFTER the government restrictions are lifted.
Prior to the current situation, it was estimated that nearly one-quarter of us work from home in one way or another, with increased access to the internet, a reduction in the cost of home computers and technology and an increase in childcare costs being cited as just some of the reasons. But how does this affect you as a landlord if your tenants want to use your property for both business and residential purposes?
Most standard Assured Tenancy Agreements contain clauses that prohibit certain business uses which could find your tenant in breach of the agreement. In addition, certain business activities will need planning permission and may be subject to business rates. Whilst legally it is the tenant that is responsible for both these, it could be you, the landlord, who the authorities come after first as it is your property.
There may be some business uses that you are happy for your tenants to undertake from home, bookkeeping or admin work for example, or even childminding or tutoring and others that you would not accept such as sub-letting rooms or work that results in a lot of traffic, dust or noise. One good example of this is a freelance hairdresser or beautician where clients will be coming and going and parking may be an issue, or chemicals may be used for treatments.
A residential tenancy and a commercial tenancy are different in law, The Housing Act 1988 excludes business tenancies – and the Landlord and Tenant Act 1954 doesn’t apply to residential tenancies. It is however difficult for some to know which one applies to their tenants.
So, what should you do if your tenants want to work from your property?
Our advice is simple; talk to us. Let us know if you are happy for the proposed business to take place from your property and then we can work with you to ensure all the legal paperwork and registrations are in place. You should consider the cost of any planning permissions needed and decide if this is a cost you are happy to bear or if you will pass this on to your tenant.
And don’t forget that when that tenant leaves, you may have to pay to change it all back again for the next tenants.
That being said, the convenience for your tenant of being able to work from home, may lead to them staying in the property for longer and being a more desirable tenant as a result.
The current situation to one side, we advise that you think this through very carefully and the pros and cons are different in each case. If you would like to discuss this with us or you are worried that one of your tenants might be using the premises to run a business already call us on 01749 681356 or email us at firstname.lastname@example.org.