HMO and flat-share tenant swaps warning issued

Tenant swaps may become one of the less glamorous, but increasingly problematic, bit of how the Renters’ Rights Act changes how tenancies operate, mydeposits has warned.

The deposit protection provider says letting agents and landlords are likely to face more cases where one tenant leaves a shared home and another moves in while the same tenancy continues.

The issue is expected to be most common in shared homes, including HMOs and flatshares, where changes in occupancy already happen more often.

It says that 4.7 million households rent privately in the UK, with a significant proportion living in shared accommodation.

Carry out thorough check-outs

Under fixed-term tenancies, there is a natural end point which allows agents and landlords to carry out check-outs, agree the condition of the property and begin a new check-in.

However, the move to periodic tenancies removes that built-in break.

As a result, agents may have to manage changes in occupancy during tenancies that continue without a fixed end date.

Tim Frome, the platform’s head of government schemes, said: “The removal of fixed terms changes the rhythm of tenancy management.

“Agents are used to working with a clear endpoint where responsibility is agreed and documented.

“Without that, the focus shifts to how those responsibilities are managed as tenants come and go.”

Tenant change is a reset

Tenant swaps create a practical choice for agents, mydeposits says, and one option is to treat each change as a reset.

That means carrying out a full check-out for the outgoing tenant and a fresh check-in for the person moving in.

That gives a clearer paper trail, but it adds cost, time and administration.

The alternative is to rely on the original inventory and tenancy documents.

While that may be simpler, mydeposits says it leaves agents needing to prove that the incoming tenant has accepted the existing record of the property’s condition.

Tenants must accept check-in report

Mr Frome explains: “It is not enough for a check-in report to exist.

“Incoming tenants must have access to it, understand it and explicitly agree to it.

“Without that, there is a real risk that responsibility becomes blurred, which can lead to disputes further down the line.”

The platform also warns that shared households may see more disputes where tenants disagree about when damage occurred, or who should pay for it.

Without a formal end point, issues previously dealt with at check-out may arise during the tenancy instead.

Make a deposit deduction

Clear evidence at each change of occupier will therefore become more important, particularly where a landlord later seeks to make a deposit deduction.

Mr Frome said: “Disputes are not always just between landlord and tenant.

“In shared households, disagreements between tenants themselves are not uncommon.

“As tenant swaps become more frequent, so too does the likelihood of these situations arising, particularly if processes are not clearly followed.”