Joint tenancy obligations for lad that has had to quit?

Joint tenancy obligations for lad that has had to quit?

9:46 AM, 8th December 2021, About a month ago 26

Text Size

The Basic scenario is: HMO joint tenancy, five tenants. On a fixed element for first 12 months. Then break clause kicks in at one-month notice upon renewal of the next contract due July 22.

One poor lad (tenant) has had to quit university for his mental health, and he’s one of the joint parties. My understanding is that he (we? Including the agent) has two options.
1) Find an alternative tenant
2) Continue to pay the difference for the sake of the other tenants.

Needless to say, option 1 is the best and always open for the sake of the tenants. However, is he legally obliged to continue to pay the remaining the 7 months’ rent (I think so legally)?

What happens if he refuses?

Can hardly blame him if he goes down this route, it’s a lot of money, and I’m sure his guarantor won’t want to do this?

Would the onus be on the remaining tenants to pursue him for the outstanding rent, or myself as landlord and or the agent?

I had his mum on the phone in bits at the prospect of him paying £400 a month until July for nothing, effectively. I’ve sought legal advice from my conveyance, of course. Just wanted to test the water with you guys for insights of maybe the best ways to proceed.

I feel bad, and I am asking if this was your child, how would you play it?
Thx

Lloyd



Comments

by Ian Narbeth

10:23 AM, 8th December 2021, About a month ago

If your tenancy is properly drafted the tenants will be "jointly and severally" liable. If not, it becomes your problem.

Assuming the tenants are so liable it means you can pursue each and every one of them for the entire rent. The fact that the individual tenants paid their "share" of the rent is irrelevant. You can recover the full rent from the remaining four.

I recommend you explain the legal position to your tenants and their guarantors and explain that it is their problem. If you are feeling generous you can offer that if they can find another person to replace the lad then you are prepared to "novate" the tenancy so that A, B, C, D and E become A, B, C, D and F. You will need to renew the guarantees as well. However, it will be almost impossible for you to recover the costs involved in dealing with the paperwork as the Tenant Fees Act will almost certainly catch you out if you try to charge more than £50.

by Lloyd

11:31 AM, 8th December 2021, About a month ago

Reply to the comment left by Ian Narbeth at 08/12/2021 - 10:23
Thanks Ian that's very helpful. i was thinking of charging £50 to release him from the contract. then the balance falls squarely on the other tenants. this would motivate them to find another tenant to take up the slack. then the kid in question is free to go. thx again. 🙂

by Ian Narbeth

11:52 AM, 8th December 2021, About a month ago

Lloyd, don't formally release him. If you do it might get messy legally. The other tenants would still, potentially, have a right to claim from him so your "release" may not work.
If you start varying/cancelling obligations you need proper legal advice. Otherwise you could find you inadvertently release the guarantors. Even if you are legally in the clear, if you give the tenants or the guarantors any excuse to argue that they are released they may take it and you will have to spend thousands of pounds on advice. Leave this to the tenants to sort out among themselves.

by Yvonne Francis

11:56 AM, 8th December 2021, About a month ago

I have had this problem over the forty years of renting to students. Ian has explained this situation brilliantly. As long as your lease is jointly and severally liable, and I don't see how a shared tenancy unless special terms are in the lease can not be.

In fact I had this situation in September this year, so the tenants found a suitable tenant. I renewed the lease, the guarantees, and even renewed the deposit protection. All went well. It was a lot of work for me but as I'm self managing it was all done for free but well worth it for peace of mind. There was a gap of four weeks but the leaving tenant had paid the rent, but out of appreciation of this I reimbursed her and took the loss.

You also say after twelve months fixed tenancy the tenancy rolls on with only one month notice. I have tenants stay on, although in my case some go and others join them. I therefore put them on another fixed term tenancy for twelve months. I don't know what sort of tenants you have but if it's students, and it looks as if the one in question is, then I myself could only cope with twelve months fixed tenancies, although I know the law in Scotland is disastrously different.

I can't see how releasing this tenant for £50 helps. When Ian mentioned £50 I think he meant it for the work to renew the lease? You should, as Ian advised, inform your tenants and as soon as they realise the implications, they will find a new tenant or even you yourself help find an acceptable one to all parties. That's always worked for me.

I hope you sort this out soon as I know it can be a worrying situation for everyone, and can become as you are finding it, an emotional experience.

by Seething Landlord

12:00 PM, 8th December 2021, About a month ago

Reply to the comment left by Lloyd at 08/12/2021 - 11:31
I think you will find that you do not have the power to release the tenant from the contract let alone to charge him £50 for doing so. The most that you could do would be to agree not to pursue him for any unpaid rent or other obligations that might arise after his vacating the premises but that would not prevent the other tenants doing so.
Only the four remaining tenants would be in a position to release him from paying his share of the overall rent.

by Ian Narbeth

12:06 PM, 8th December 2021, About a month ago

Reply to the comment left by Seething Landlord at 08/12/2021 - 12:00
Seething Landlord
That's not correct. If the landlord and the other four tenants all release him, he will be released. The four remaining tenants on their own cannot release him. The landlord could still pursue the departing lad for some or all the rent. The four could agree to indemnify him but why would they?

by Martin Thomas

12:33 PM, 8th December 2021, About a month ago

Agree with Ian Narbeth's comments (good advice as usual) but as I see it, you should be able to charge the following under the Tenant Fees Act.
1. £50 to create a new contract when a tenant wants to leave a "joint and several" tenancy.
2 £30 as my costs (time and motor expenses) to travel to the property to meet the new replacement tenant and sign the contract with all the tenants.
3. Reprotecting the deposit - with MyDeposits Custodial, there is a great deal of information that has to be recorded and that takes time. If you employed someone to do that, the cost would easily be £40. If I do it can I charge that amount?
The Tenant Fees Act on the GOV website states the following as claimable;
* 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
As I see it, the costs I have described are "reasonable incurred".

by Simon M

12:45 PM, 8th December 2021, About a month ago

I've seen this as both parent and landlord. Students are more likely to drop out at the end of the first term than any other.

Parents must sign the guarantor's agreement without reading or thinking - it's naive because a student landlord's business model must rely on it.

The current group of students will have already formed a friendship group. They're unlikely to find a new tenant themselves - or be friendly towards a strange new tenant you find - without an overriding reason. So all tenants and guarantors must understand they're equally liable to motivate them to find a new tenant (the best outcome) or pay from their own resources.

There could be other reasons for leaving so I wouldn't feel too sorry for the one who dropped out. They'll need to get a job and perhaps mum will let them live at home rent-free. Lesson learned for both of them.

by Lloyd

13:14 PM, 8th December 2021, About a month ago

Reply to the comment left by Yvonne Francis at 08/12/2021 - 11:56
Thanks Yvonne. yes i was thinking of recharging the cost of redrafting the contract not a fee as such. thx for your perspective. and yes, Ian explained this brilliantly.

by Seething Landlord

13:15 PM, 8th December 2021, About a month ago

Reply to the comment left by Ian Narbeth at 08/12/2021 - 12:06
Sorry, but I think you might have misunderstood my comment. The points were:
1 - the landlord could not unilaterally (i.e. without the agreement of the remaining tenants) release one of the tenants from the contract (this is what I understood Lloyd to be proposing)
2 - he could enter into a separate agreement with the departing tenant to not pursue him for any future unpaid rent or damage etc. (but why would he?)
3 - Only the four remaining tenants would be in a position to release the departing tenant from paying his share of the overall rent i.e. as between themselves.

What is incorrect about this?

1 2 3

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER