Changing Tenants under a Periodic Tenancy

by Readers Question

12:47 PM, 21st December 2015
About 3 years ago

Changing Tenants under a Periodic Tenancy

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Changing Tenants under a Periodic Tenancy

I have a 3 bed property which was rented under an initial 12 months AST to 3 friends. One of the friends now needs to depart to London with his job.friend

The 2 remaining tenants have found a suitable substitute sharer, and asked me to remove the departing tenant, and replace him with the new sharer.

My inclination is to end the existing periodic tenancy, and replace it with a new AST however, the existing tenants have asked me to keep the existing periodic tenancy, and just swap over the names.

A) Is this possible?
B) What needs to be done to ensure its legal?

Any advice would be welcomed.
Cheers,
Jim



Comments

Neil Patterson

12:48 PM, 21st December 2015
About 3 years ago

I would normally say New deposit New AST, but others may have better ideas.

Stephen Smith

10:21 AM, 22nd December 2015
About 3 years ago

The initial AST agreement is with the three tenants. If one leaves he would have to be released from his obligations under the AST. The other two would still be obligated.

If another assumes the leavers place, what would be the position if the other two originals left and the third new tenant decided to move two additional sharers in? You would no contracts with any of them!

What about the deposit?

New AST is the way forward.

Barbara Gwyer

14:46 PM, 22nd December 2015
About 3 years ago

I have had this several times with sharers.
Where they are good tenants, what I do is allow the remaining tenants to find a new tenant with the proviso that the new tenant passes the NLA full reference check. So long as they do, I amend the AST with the new name and change the name on the deposit with MyDeposits (they have a form for doing this).
However, I do make the remaining tenants aware that they are jointly and severally liable for the full rent until the end of the tenancy so the outgoing tenant must pay rent until the new tenant takes over.
On moving in day, the new tenant and the outgoing tenant go through the inventory to ensure that there is nothing that should be chargeable to the outgoing tenant, and then the new tenant pays their deposit over me and I pay the outgoing tenant less deductions. I also charge the new tenant an admin fee to cover the costs of the reference check, changing the name on the deposit certificate and preparing the new AST
I prefer to let the existing tenants find their new housemate because, at the end of the day, they are the ones who are going to have to live with them - not me!

matchmade

17:42 PM, 22nd December 2015
About 3 years ago

Use a Deed of Assignment form and append this to the original AST. This releases the existing tenant from their obligations under the AST and assigns those obligations to the new tenant, with the approval of the landlord. All three parties need to sign and a witness' signature would be useful. Obviously details such as how the old tenant receives their deposit back, how you handle inventory-checking and deductions from the deposit, any increase in the rent, and so on would be part of the agreement.

Barbara - MyDeposits must have changed their procedures, because the central reason I stopped using them and switched to DPS was because they were hopeless with tenant substitutions like the scenario described here: they used to insist that a whole new AST was needed, with repayment of deposit, new deposits taken etc. Thus understandably irritated the existing tenants, who did not want to have to commit to a new six-month AST when they had already "earnt" the flexibility of a periodic tenancy.

Jim Fox

5:26 AM, 23rd December 2015
About 3 years ago

Thanks for your feedback, comments and assistance, in particular those from Tony Atkins, whose advice seems to offer a solution which is simple, and the most agreeable option for myself and the tenants.

Romain Garcin

10:45 AM, 23rd December 2015
About 3 years ago

If the tenancy is assigned, I would think that there should be no need to deal with the deposit or inventory: The tenancy continues, the existing inventory stands, and the landlord continues to hold the deposit.
Any agreement on these issues should be between the tenants.

You could also enter into a new AST, periodic from day one. But in that case you would indeed have to deal with the deposit, inventory, etc.

Barbara Gwyer

11:37 AM, 23rd December 2015
About 3 years ago

My understanding when I talked to MyDeposits on this (albeit a while ago) is that the deposit certificate must have the names of all interested parties. If you assign the AST and don't put the name of the new tenant on the deposit certificate when and if they have paid a deposit to you, then surely you are in breech? Plus to me it isn't fair if you don't check the inventory and make sure that the new tenant is not going to become financially liable for damages which were down to the outgoing tenant

matchmade

11:58 AM, 23rd December 2015
About 3 years ago

I agree with Barbara: my understanding was that the names on the deposit certificate had to reflect the actual current tenants, not the ones on the original AST, notwithstanding any arrangements re. assigning the tenancy. MyDeposits said the deposits had to be repaid to the bank accounts of the persons named on the deposit certificate, not an assignee, and they especially objected if the departing tenant was the Lead Tenant who is meant to be responsible for handling the distribution of pooled deposits when they are repaid. DPS were far more relaxed about changes to names on a houseshare deposit, which is why I switched to them.

I also agree re. getting a new inventory done and settling up on repairs with the existing tenants when someone moves out. In my experience it's dangerous to leave the tenants to sort this out on their own: the departing tenant can be very blasé and seek to evade her responsibilities, thinking she can get away with dealing one to one with the landlord to secure her share of the deposit. It works better if the landlord plays the authority figure and says "this is how it's going to be", i.e. we will have a house meeting and thrash out responsibility for any repairs now, before the new person moves in, so the houseshare starts with a blank slate that is fair to everyone.

Stephen Smith

12:20 PM, 23rd December 2015
About 3 years ago

My understanding is that an Assured Shorthold Tenancy has to have a minimum of 6 months for the term and thereafter it can go periodic.

The DPS will not take a deposit for a periodic, it has to be for a term of 6 months minimum and then you elect to have it held as a periodic tenancy.

I agree with the comments regarding changing of names on the deposit records and the inventory checks. Bottom line is that when the tenancy is finished the tenants are responsible for the damage there nay be. As a LL you are not concerned about the division of liability. Jointly or several liability.

Romain Garcin

13:40 PM, 23rd December 2015
About 3 years ago

An assignment by the tenant is exactly the same as an assignment by the landlord when the property is sold. The tenancy is not finished and the new tenant takes on all the rights and liabilities.

Regarding deposit schemes, if they want that the names of the individual tenants be amended then fine, but there is nothing to do.

If the landlord wants to get involved in a check out inspection and deposit deductions then he might as well not go for assignment but grant a new tenancy instead.
Indeed, the paperwork for a grant is quite simpler than for an assignment.

An AST does not have to be for a fixed term.

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