Assigning a Joint Fixed Term AST?

Assigning a Joint Fixed Term AST?

9:45 AM, 16th November 2015, About 6 years ago 23

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My house is let to four people who jointly signed a 12 month fixed term AST last June. One of them now wishes to leave and will find a suitable replacement tenant – subject to references being checked by my agent. bad idea

The agent wants to tear up the existing contract and make a new 12 month fixed term AST. This seems a bad move to me as it delays the next rent review by 6 months and, if the tenancy is not renewed, means that I shall be looking for new tenants at the most difficult time of the year.

Is there any reason that the departing tenant cannot assign the existing tenancy to the incoming tenant?

The Agreement says that it cannot be assigned without my permission, so that’s not a problem.

Many thanks

Chris



Comments

by Silver Flier

7:13 AM, 19th November 2015, About 6 years ago

Thank you all very much for your quick and detailed responses, it's clearly not as simple a matter as I had thought.

Summarising, the main points which you have made are:

The legal perspective is that the tenants (A,B,C,D) are regarded as one party to the agreement, and so one of them cannot assign the agreement - although all of them could e.g. A,B,C,D could assign it to B,C,D,E.

The departing tenant should bear the cost of a new agreement - my agent has already confirmed this.

The new agreement can be for any duration - so it could be limited to the remainder of the existing tenancy.

The deposit and inventory are important - in my case the inventory was done when they moved in 2.5 years ago. The departing and incoming tenants will need to check and agree what deductions from the deposit might be due now – if they can’t then they need to pay for a new inventory to be done.

If the deposit is held in the name of the departing tenant that needs to be changed.

A new tenancy now will attract all the legal changes from the 1st October, which the current tenancy is not subject to. It’s important to get the tenants written acceptance to receive notices by e-mail.

Other points:
I wouldn't want the remaining tenants to think that I was taking advantage of the situation to increase the rent 7 months earlier than they expected - I want them to extend again next year.

Many thanks again for all your thoughts.

by Puzzler

11:55 AM, 21st November 2015, About 6 years ago

Reply to the comment left by "Romain Garcin" at "16/11/2015 - 13:20":

According to my agent, if one gives notice then they do so on behalf of all.

by Paul Shears

12:41 PM, 21st November 2015, About 6 years ago

Well I have an identical situation but perhaps I have been getting it wrong for the last six years. This is what I do:
1. I have a verbal and written (Contract) agreement that the rent will only rise once a year or as long as I have continuous occupation. There is a jointly and severally liable clause.
2. The existing tenants find a new housemate by advertising on the internet at a cost of about £20 to them. I am kept informed, meet one or more of the applicants for the vacancy after my tenants have shortlisted them. I prefer two men and two women over 25 years old, in secure employment for 12 months and with an upper age limit set by my tenants - the older the better as far as I am concerned but it absolutely must work socially. Nobody wants to come home to stress!
3. I do due diligence on the proposed tenant agreed between myself and the remaining tenants.
4. I draw up a new contract to run to whatever the current term is.
All I need to do is to change the name of the outgoing tenant for that of incoming tenant and the relevant dates.
The end of tenancy contract date remains as on the current contract being superseded by the proposed contract. .
This has been as little as a month in the past.
After this a new contract is issued with the new rent for a 12 month period with a six month break clause.
Everyone, including myself signs the new contract with signatures witnessed.
This is not a problem although my tenants lead different lives, one might be away and the new tenant may not be geographically close. However this can usually be done within a week.
5. I get the outgoing tenant to agree with the incoming tenant what any compromise on the deposit is required between them. The incoming tenant then pays the outgoing tenant (Via myself if necessary).
6. Once I have confirmation that the deposit transfer has happened, (Yes I know that their is a risk here but I choose to rely on my own judgement and be responsible for the consequences), I contact "MyDeposits" and inform them. This used to be a simple phone call but has now become by far the biggest time consuming bureaucratic pain in the whole process.
The "MyDeposits" people then tell me where to get the latest paperwork that they require to change their records (Deed of assignment). This is by far the biggest pain as I need to get the signatures of all parties on the form and all the addresses of all parties. I need to be quick here as the outgoing tenant may be moving abroad or even have actually left but still be paying their rent.
I have never had any comment from if the lead tenant leaves.

I charge nothing for this and it takes me about two hours work.
Result: Continuous income for six years, no advertising cost, no agency fees, painless and seamless replacement of outgoing tenant by incoming tenant. A first class relationship is maintained between myself and my tenants.

by Colin McNulty

3:47 AM, 22nd March 2017, About 5 years ago

Sorry to resurrect an old thread but it seemed the easiest way to ask a related question:

Can you use this Assignment process to add a new tenant to an AST?

I understand that in law Joint Tenants are considered a single tenant unit if you will, so it seems to me that the existing single mum tenant, tenant A, who wants to move in the father of her child, tenant B, would have to sign a Deed of Assignment giving herself as both the leaving tenant A, and coming back in as a joint tenant A and B.

Does that sound legit? I don't want to grant a new 6 month AST for the obvious reasons that if it all goes wrong with the new man in the house, I want to be able to get them out ASAP.

by Neil Patterson

8:03 AM, 22nd March 2017, About 5 years ago

Tessa said earlier that a new AST does not have to be for 6 months but could be for the remaining term. If it all goes wrong I am not sure how a new tenancy makes anything worse?

by Ian Narbeth

12:08 PM, 22nd March 2017, About 5 years ago

Reply to the comment left by "Colin McNulty" at "22/03/2017 - 03:47":

Tessa was talking about an individual tenant assigning his or her beneficial interest to another person. This is not a good idea.
However, if a lease is granted to A, B, C and D it can be assigned by A, B, C and D to A, B, C and E.The tenancy is the same so agents should not be entitled to fresh commission.

If a deposit has been given with all tenants chipping in then it will be best NOT to interfere with it. Let Tenant E pay Tenant D what the latter has contributed on the basis that when the deposit is returned E will receive the appropriate share. The matter is complicated if Tenant D is the lead tenant with the DPS. A substitution would be required. Call the DPS for advice.

BTW Colin, what are you doing posting on lease assignments in the middle of the night. Hope it cured your insomnia 🙂

by Colin McNulty

6:26 AM, 23rd March 2017, About 5 years ago

Hi Neil, yes I understand that an AST doesn't have to be for 6 months, however AIUI even if the AST is say 3 months, the statutory protection over not issuing a S21 notice for the first 4 months still applies, so it's a relatively meaningless act to issue a 3 month AST.

Hi Ian, it looks like you answered the original question, which was posed back in 2015. You make the statement that assignment is not a good idea, but didn't say why? What were your thoughts on my particular situation, where there is only a single tenant who wants to add her partner to the tenancy?

BTW Ian, I'm typically awake at 3/4am sadly. I've had a lay in today, I was only up at 5:30am!

by Ian Narbeth

10:10 AM, 23rd March 2017, About 5 years ago

Reply to the comment left by "Colin McNulty" at "23/03/2017 - 06:26":

If one tenant purports to assign his or her interest, the legal estate in the tenancy remains vested in the original tenants including the outgoing tenant. The incoming "tenant" may not in law be liable to the landlord. Thus the outgoing tenant remains jointly and severally liable for the rent and other tenancy obligations. This is not what that person will expect or want. From the landlord's point of view what is the status of the incoming "tenant"? This is not at all clear and the last thing a landlord wants is an expensive trip to court to settle an obscure point of law.

by Colin McNulty

11:08 AM, 23rd March 2017, About 5 years ago

I'm astonished by what you're saying Ian, as I understand this to be almost a daily occurrence across the country, as students come and go in HMOs. The last thing anyone wants is to create a new tenancy with a new 6 month period when a student leaves and is replaced.

What you seem to be saying is that the "assignment" if fact does absolutely nothing. Has a tenancy assignment really never been tested in court?

by Ian Narbeth

11:58 AM, 23rd March 2017, About 5 years ago

Reply to the comment left by "Colin McNulty" at "23/03/2017 - 11:08":

No what I am saying is that if A, B, C and D are tenants and D on his own assigns to E, there is a problem. The easy solution is for A, B, C and D to assign the whole tenancy to A, B, C and E with the landlord's agreement.


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