Early termination of a fixed one year tenancy agreement

by Readers Question

11:03 AM, 26th May 2014
About 7 years ago

Early termination of a fixed one year tenancy agreement

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Early termination of a fixed one year tenancy agreement

Following the non payment of rent due on the 1st May, my tenants have requested an early termination of their fixed one year tenancy as a result of family change of circumstances.

Their guarantor to the Agreement (their father) has now paid the o/s rent following an exchange of emails/telecons, in which I have reminded them of their contractual obligations under their Tenancy Agreement and agreed with them that we will release them from their obligations as and when we find a suitable new tenant for the property.(ie we will only agree to termination of their tenancy when a new tenant has been found and has signed up).

Until this date the existing tenants remain responsible for paying the rent and all other costs that are identified in the Agreement, including any shortfall in the letting fees still due to our agents.

I pointed out to the tenants that, while I couldn’t insist on this, it would greatly assist in the speedy re-marketing of the property if they decided to vacate the property themselves. I pointed out that if they chose to do this they would still be responsible for the rent until the date that we agreed as their tenancy termination date, at which point the matter of their deposit would be dealt with as per the T&C’s in the Tenancy Agreement.

They have now vacated the property and have not (so far) rejected any of the points I have made concerning their ongoing obligations. Can you advise me whether by vacating the property voluntarily they have made it more difficult for me to enforce the continuing payment of rent?”

Thanks

Henry cancel


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Comments

Robert FitzHerbert

16:04 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "Yvette Newbury " at "27/05/2014 - 14:35":

I quite agree Yvette and have and would never do this unless it has been agreed with the tenants as a specific deduction from the the deposit and only then if I know there is enough money left over to cover it after the deduction of other agreed items!

Robert FitzHerbert

16:11 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "MdeB " at "27/05/2014 - 10:21":

Like minds on this MdeB and with the exception of actually drawing up a deed (but using an exchange of emails to record their position under the contract), this in effect how this situation has been handled. I am now about to remind the tenants father (who is their guarantor on the contract) that the rent for June is due on the 1st of the month. His response will determine how this thing plays out until I finally relieve them of their contractual obligations once I have found and contracted with a new tenant!

Robert FitzHerbert

16:19 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "John MacAlevey" at "27/05/2014 - 12:03":

Yes, they returned the keys to my inventory clerk who met them at the property for the checkout. They had the property professionally cleaned and there are only a few minor issues which will need to be made as deductions from their deposit. I am considerably happier in this position having got them to voluntarily vacate the property (in the full knowledge of their ongoing contractual responsibilities), than to have them still insitu and still having to worry about rent payments and getting them to leave. At least we now have a clear run at remarketing the property without having tenants to mess things up!

Romain Garcin

17:05 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "Henry Roberts" at "27/05/2014 - 16:19":

If I understand: you asked them to leave, you had a check out inspection carried out and plan to propose deductions from their deposits based on that.
Based on that I suppose that you won't allow them at the property any more.

It's no longer muddying the waters as I suggested before. IMHO, if they so wished they would have a very good shot at claiming that their tenancy (and thus liability for rent, etc.) has ended by operation of law.

As said, it does not really matter that they move out as long as you treat the tenancy as continuing and thus you need to act with caution: Your actions tend to indicate that do not, IMHO.

Michael Barnes

17:20 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "Yvette Newbury " at "27/05/2014 - 14:35":

I was not suggesting that landlord pay tenant's bills, I was saying that if legally landlord is required to pay council tax before the end of the tenancy (which is the case if tenant vacates early during a statutory periodic tenancy), then that money can be claimed back if there is a suitable clause in the tenancy agreement..

In general, only pay what you are legally required to pay (unless you don't mind if you don't get the money back).

On re-reading it looks like you might have been replying to my other post.

I was suggesting (trying to suggest) that they pay up to the date they leave and then everything goes to landlord's name, and money is paid to cover up to two month's expenses and loss of rent. If you can't get a new tenant in two months, then something is wrong.

Michael Barnes

17:29 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "Romain " at "27/05/2014 - 17:05":

Thatr is why I would consider drawing up something in writing to clarify the position and understanding of both parties before anything actually happens.

In essence you want to help them but you do not want a financial loss. Therefore you negotiate on approach and get it written down and signed before you ask/tell them to vacate and return the keys.

Carol Thomas

17:47 PM, 27th May 2014
About 7 years ago

I would refer you all to the discussion headed "Council Tax and Periodic Tenancy".......

Robert FitzHerbert

17:55 PM, 27th May 2014
About 7 years ago

Reply to the comment left by "Romain " at "27/05/2014 - 17:05":

I specifically told that I was not able to request that they leave but I pointed out that the optimum way to rid them of their ongoing contractual obligations was for me to re-let the flat as quickly as possible and this would be best achieved if they were no longer in residence.
I am treating the tenancy as continuing as they signed up for a fixed term of a year and are not able to terminate the tenancy before this period has elapsed, without my express agreement. This I am entitled to give but always in accordance with certain conditions that may include the landlords reasonable costs in re-letting the property. (This wording is in the contract). As it was the tenants who gave the notice to terminate the tenancy I am also able to claim from them the reimbursement of the letting commission (plus VAT) from the time the date of early termination to the date when this contract was originally due to expire. The tenancy will not terminate until the property is re-let (again all as spelt out in their contract conditions).
From the time of non payment of May's rent, I have acted both with caution and with reasonableness, both by speaking to the tenants and then recording the events in writing to ensure complete clarity of their obligations by terminating early.

Romain Garcin

18:17 PM, 27th May 2014
About 7 years ago

Whether the tenancy is treated as continuing depends on the facts and actions of both parties, not the tenancy agreement or even express agreement.
If a check out inventory has been carried out, deductions to deposit proposed based on it, and, quite importantly, you will not let the tenant access the property anymore, I'm thinking that it is difficult to conclude that the tenancy is continuing.

Even drawing up a document or deed would not protect you if you did not act accordingly.

Now, your tenant may keep to his word, but if he decided to challenge that you would be vulnerable.

Hence the suggestion to always act with caution.
E.g. it would cost nothing to wait until the property is re-let before carrying out the check out, but it would help backing up a claim that you did not accept surrender by operation of law (which means by your actions).

All in all, you should act as if the tenant was still living at the property until you are happy to accept the surrender of the tenancy.

Robert FitzHerbert

9:10 AM, 7th June 2014
About 7 years ago

Many thanks to all who commented on this issue of mine. I am now pleased to report that the tenants did move out voluntarily and then carried out a checkout after they had cleaned and left the flat. They received their copy of the report but I told them that any costs arising would not be presented until the actual date of termination of their tenancy (which had been agreed as the day prior to the commencement of any new tenancy). The payment of rent has continued by the guarantor after a certain amount of chasing on my behalf and I have now got a satisfactory new tenant due to move in on the 21/06/14 from whom I will be receiving a higher rental as well! All in all, I seem to have covered most of the angles, however, in my view, the single most important factor in achieving such a satisfactory outcome has been the goodwill generated and maintained on both sides. As always in my dealings with tenants, I make the effort to listen and talk their problem through with them and try and be as reasonable and helpful as possible whilst always explaining the worst case scenario to them. Then I confirm this to them in writing, explaining how we can both best act to mitigate their costs.

I think the tactic is always to work toward the best outcome whilst anticipating the worst one and keep the 'legal hard talk' to a minimum until all else has failed!

I have to say that the response from my letting agent was derisory. They took 2 weeks to come back to me about the problem and then were more concerned about invoicing me for the outstanding balance of their letting fee than wanting to assist! Their advice was then ill informed and they proceeded to criticise all the action and tactics I had already used with the tenants, preferring instead to propose various inappropriate legal remedies. Again a sad reflection on the quality of people with the title of Lettings Manager that so many agents tend to employ.

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