Reply To: Lease agreement for supported accommodation



Following on from the above concerning the lease agreement. The landlord has stated that from the six flats that they lease from the superior landlord, they only rent 5 out to tenants and the other is rented to the care provider who pays a separate rental charge for the use of the flat as a “staff flat” the staff support the clients 24 hours a day 7 days a week from flat 3.

My first question to the landlord is, who does the care provider pay rent to? but I am expecting them to say it’s to them. Secondly, I will need to ask where that income is then reflected in any expenditure they are declaring in their unaudited accounts and financial statement and what, if any, impacts it has to the calculation of the core rent because I cannot see that it does, other than to double count.

The lease is let to us on a 5-year commercial lease set at £35,400. The core rent that has been set therefore covers the full cost of the lease plus surplus for the Charity. IE 5 X £163.77 X 52 = £42,580 allowing a surplus of £7,180.20 per annum.

I understand the above calculation provided gives £163.77 x 5 tenants = £818.85 x 52 weeks = £42,580.00 – lease cost of £35,400.00 (lease for 6 flats) = £7180.20 surplus profit.

Other than the above questions, i.e., why are the 5 tenants being charged for the sixth flat, which already generates its own rental liability and is paid by the care provider. I need to understand the surplus profit being generated, as the landlord is a charity who should be a not for profit, and am I justified in querying this further. Even though the landlord states that their rents are reasonable and below the average in our area.

What does everyone else think?

thanks for reading and any comments, always appreciated.

kind regards