Early release of agreement on sold property?
I’m about to sell a house which is still tenanted. We have Exchanged and Complete in three weeks.
Out of the blue, my tenant has said he has to move because of his job, two months before the end of his tenancy agreement. (There are three months left to run.)
He would like me to grant him a release which will enable him to have his deposit returned so that he can use it on the next rental. I’m happy to do this (if I am allowed, in the circumstances.) Of course, by the time he actually leaves, the new owner/landlord might not be too keen on his departure two months early, and refuse to return his deposit.
He has been a great tenant for three yeas, and I would like to help. Is there any way I can arrange the early return of his deposit, before the sale completes?
Many thanks
James
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Member Since February 2011 - Comments: 3453 - Articles: 286
9:21 AM, 20th October 2017, About 9 years ago
Hi James,
Maybe have a chat with the purchasers as this could be more convenient for them especially if they were planning on doing any work to the property.
Member Since October 2016 - Comments: 81
10:22 AM, 20th October 2017, About 9 years ago
James – just a thought: does this improve the value of your property? Should the sale price stand?
Member Since November 2016 - Comments: 227
11:16 AM, 20th October 2017, About 9 years ago
I’m sure a tenancy can be ended early buy mutual agreement.
Just get it in writing and you should be fine.
As said, the buyer may have been planning to give the tenant notice anyway, even if they said othrewise.
Member Since July 2013 - Comments: 61
6:00 PM, 20th October 2017, About 8 years ago
We have exchanged, so no chance of changing the price. Also, I’m sure the buyer was attracted to the house because of the tenant, and the fact that he would have a 10% p.a. gross profit. Basically, can I agree to end the tenancy before the agreed date, even though, by the time the tenant actually moves out, I will no longer be the owner?
Member Since September 2013 - Comments: 120
11:35 PM, 20th October 2017, About 8 years ago
It seems to me you are splitting hairs over this, 3 months is not worth breaking into a sweat over for any of the parties involved, speak to your purchaser and I am sure he won’t bat an eyelid whatever arrangement you come to with the now ex-tenant (as far as you are concerned). People get too pedantic over what are actually trifling matters,
Member Since July 2013 - Comments: 61
8:19 AM, 21st October 2017, About 8 years ago
Michael, Couldn’t agree more. But if the new purchaser refuses to break the agreement a month or two before the end, I assume he could claim the deposit in lieu of rent. Not a trifling matter for the tenant, who now has no deposit for his next home. I am hoping to prevent this in a clear manner. The point is, can I allow the tenant to leave early even when I will no longer be the landlord? Can I set up anything in favour of the tenant before the actual Completion of sale? Will a letter from me allowing a change of agreement be sufficient?
Member Since August 2014 - Comments: 336
8:49 AM, 21st October 2017, About 8 years ago
Legally, the tenant is obliged to continue the tenancy unless you agree otherwise. It would appear that you are not in a position to agree otherwise as you have exchanged contracts. The purchaser is entitled to expect the property in precisely the terms they have entered into at the point of exchange.
The only way out of your predicament is by talking to both parties involved and seeing what they can agree to. It would be foolhardy to make unilateral decisions yourself.
It’s the two of them who need to agree a solution. By all means you can act as the go-between, but get all of their responses in writing. You don’t want to loose the sale or get sued over two month’s rent and a deposit; it just isn’t worth it.