I am inclined to Ok tenant leaving early before the break clause?

I am inclined to Ok tenant leaving early before the break clause?

16:22 PM, 10th May 2022, About 3 weeks ago 8

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I rent out an apartment. The initial contract started on February 13th 2021 and the fixed term was for twelve months. The tenant renewed for a further twelve months from Feb 13th 2022. The tenant is now in some difficulty financially and her mother has become unwell and they need to go and live with her too. She has requested that she wants to leave the property.

There is a break clause in the contract (standard, notice after 4 month, but not to expire before 6th month) but she wants to leave on July 12th instead of August 12th. (August 12th would be the end of the six months).

In any case, I am inclined to Ok her leaving early before the break clause. I am just a bit unclear as to the correct procedure to avoid any issues for myself.. Am I correct in saying

1) I need to agree the terms of the early tenancy surrender in writing with the tenant. There is no formal template for this. I will tell her it is okay to give notice now so that she can leave on July 12th. If I can find a tenant who wants to move in sooner than she may be able to move out earlier.

2) If I am not able to find a tenant, then is it reasonable that she should be liable for the rent until what would have been the termination if the break clause had been evoked, ie August 12th 2022?

3) Is it reasonable for me to say she will have to pay my costs for finding a new tenant? I will do it via Openrent so it is reasonable compared to a letting agent. This is what I would have done in any case whenever she moved out.

4) I understand a formal surrender of tenancy has to be signed by the existing tenant. Does this have to be done on the day she leaves the property? If so when do I get the new tenant to sign the contract? If the existing tenant does not move out then I’m in a pickle. I would assume the contract with the new tenant has to be signed after the existing tenant moves out and has signed the surrender of tenancy? Will a new tenant looking for a property, for example, provide a holding deposit and then wait one and half months to sign the contract?

Am I missing something here?

I appreciate any help as I am trying to get this done correctly.

Thank you

Raj



Comments

by Graham Bowcock

8:17 AM, 11th May 2022, About 2 weeks ago

Firstly, I think you are doing the right thing in letting the tenant go early. if the tenant is struggling, life could be difficult if you persevere with the contract as a matter of principle.

Secondly, you would be entitled to ask the tenant to meet any re-letting costs that you incur by letting them go before the end of the agreement. However, if the tenant has no money you may need to take a pragmatic view on this point.

Thirdly, you should have a surrender document setting out your agreement.

Finally, I would never sign up to a new agreement until I have the property back, just in case they don't move for some reason and you are committed to a new tenant moving in. Could be tricky.

by Judith Wordsworth

9:48 AM, 11th May 2022, About 2 weeks ago

I would draft a surrender document stating
(1) the original terms of the tenancy and
(2) that you agree to the tenant's request to terminate the tenancy as of xxxxxxxx and that they are released from the notice period clause.
(3) that the property will be left clean and tidy and all the tenant's possessions will be removed prior to the checkout inspection and return of the keys.

Personally I would not charge the 1 month till 12.8.22 in these circumstances nor charge re-letting costs. You get those knocked off your tax afterall.

by hpbennett

11:26 AM, 11th May 2022, About 2 weeks ago

I had a similar situation a year ago and took a pragmatic view and released the tenant. I relet the property almost immediately to a much better covenant. I agree with the comments above.

by Jessie Jones

12:59 PM, 11th May 2022, About 2 weeks ago

Don't ask the existing tenant to pay the costs of finding a new tenant. This would be a prohibited fee under the tenant fees act.

by Graham Bowcock

14:05 PM, 11th May 2022, About 2 weeks ago

Reply to the comment left by Jessie Jones at 11/05/2022 - 12:59
The guidance is clear that you can charge reasonable costs incurred in surrender:

f) payments associated with early termination of the tenancy, when requested
by the tenant;
If a tenant requests to leave before the end of their tenancy a landlord or agent is
entitled to charge an early termination fee, which must not exceed the loss they
have suffered in permitting the tenant to leave early. This would usually mean that
they must not charge any more than the rent they would have received before the
tenancy reaches its end. A landlord or agent should aim to agree to any reasonable
request to terminate the tenancy agreement early and should charge no more than
to cover any likely void period. A tenant could still be required to pay rent at
specified intervals as determined by their tenancy agreement until a replacement
tenant is found.

by Dylan Morris

14:58 PM, 11th May 2022, About 2 weeks ago

To end the tenancy download the surrender form on the NRLA website and get tenant to hand back the keys and sign (whilst inside the property) on the day she leaves. Tenancy ended. Simples.

by charles stevens

6:04 AM, 27th May 2022, About A day ago

I think letting the tenant go a month early is a nice thing but I wouldn't undo that by charging her everything else even if you are able to. Up to you of course.

Although ideally you could have a written surrender document but, if you are both in agreement and there are no ongoing monetary commitments, there is nothing to stop you both ending the AST by operation of law. The tenant vacates, gives you the keys, sends you an email confirming that they have given you the keys and wish to determine the tenancy today, you email back accepting the keys and the surrender of the AST. That is sufficient to end the AST but as i say, if you want other matters noted you need a formal surrender

by Crossed_Swords

20:19 PM, 27th May 2022, About 14 hours ago

Let them go, don't risk arrears or damage

It's a strong market, you'll find another tenant


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