Clarity required for replacement tenant?

Clarity required for replacement tenant?

0:01 AM, 9th August 2023, About 10 months ago 4

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Hello, we are the landlord of a student HMO. The tenancy has been signed for the upcoming year but one of the tenants has now decided to pull out.

They have found a replacement tenant but the agents are saying they can only charge them the £50 fee and want to charge us £42 for the cost of the works involved to process this replacement which (in their words) briefly includes referencing, issuing a new contract, surrender of the existing tenancy, right to rent checks, serving all of your mandatory documents and re-registering the deposit.

I have read the Tenant Fees Act 2019 and believe that you can charge them the full amount if I have understood it correctly.

From the 1 June 2019, the only payments that landlords or letting agents can charge to tenants in relation to new contracts are:
– payments associated with early termination of the tenancy, when requested by the tenant
– payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy.

It would be great to have some clarity of the wording and to see if I have understood it correctly.

Thanks for your help,

Suzanne


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Comments

Michael Freer

10:02 AM, 9th August 2023, About 10 months ago

Being rather blunt, why concern yourself with £42?

The tenants you have found a replacement for the one who pulled out, which is an indicator that they understand taking responsibility, which is great start.

Martin Thomas

10:27 AM, 9th August 2023, About 10 months ago

The same thing has happened to us on a number of occasions with our student lets. My reading of the Tenant Fees Act is that if additional costs are actually incurred because of the actions of the tenant, for example, the work necessary due to one student leaving, then those costs are chargeable to the student that is leaving. They should be deducted from the deposit. I don't believe you are restricted to the £50.

DPT

17:28 PM, 9th August 2023, About 10 months ago

Following a First Tier Tribumal ruling in 2021 that the £50 limit should apply for a change of tenant, it seems a strong possibility that a future case would find the same and would assume that the tenants request could be dealt with under s6 of schedule 1 of the Tenant Fees Act, not s7 as you might think. In other words, you agent is probably right to be cautious on this occasion.

DAMIEN RAFFERTY

20:32 PM, 9th August 2023, About 10 months ago

All part of being a student landlord.
Is it a HMO ?
It's a tax deductible expense

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