Shelter do it again!

by Readers Question

14:10 PM, 5th October 2019
About 2 weeks ago

Shelter do it again!

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Shelter do it again!

Shelter do it again! Screw the vast majority of decent tenants that is, by their support for the Tenant Fees Act.

It is now not possible for a landlord to agree to a surrender of a tenancy without either:
a) breaking the law, or
b) being out of pocket

So no landlord in his right mind will agree to early termination of the tenancy of a decent tenant. Of course the bad tenants will be unaffected because they already cost the landlord.

This comes from the wording of paragraph 7(2) of Schedule 1 to the act, which says:

But if the amount of the payment exceeds the loss suffered by the landlord as a result of the termination of the tenancy, the amount of the excess is a prohibited payment“.

It is impossible to know at the time of negotiating and agreeing the surrender the exact loss to the landlord (e.g. a new tenant may be found in a week or it may take 2 months), and so it is extremely unlikely that the exact loss will be agreed upon. That leads to the conclusion that either a) or b) above applies.

Yes, it would be possible to bill the tenant later, but the idea of a surrender (and the wording of the accompanying deed, which is required by law) is that from the moment of surrender the LL and T have no further obligation to each other. And is any LL going to trust the T to pay the X hundred pound because it took a month to find a new tenant?

So there we have it. Thanks to Shelter (and others) no landlord who understands the law will now agree to the early surrender of a tenancy by a decent tenant.

Michael



Comments

Hardworking Landlord

9:20 AM, 7th October 2019
About 2 weeks ago

I have had this situation a couple of times and only agreed the release of the tenancy at the same point of the new contract being signed and deposit paid. At this point I had view of the full costs and had them agreed by the exiting tenant. So I think I had it covered? Keen to know if I missed something though. Oh and careful with using the word surrender - Has this not be banned!

Ian Narbeth

10:01 AM, 7th October 2019
About 2 weeks ago

I accept that the Tenant Fees Act 2019 (TFA) is a minefield for landlords but section 1(7) says:
"For the purposes of this section, a landlord does not require a relevant person
to make a payment, enter into a contract or make a loan if the landlord gives
the person the option of doing any of those things as an alternative to
complying with another requirement imposed by the landlord"
Section 1(8) says that:
(8) Subsection (7) does not apply if—
(a) the other requirement is prohibited by this section or section 2 (ignoring
subsection (7) or section 2(6)), or
(b) it would be unreasonable to expect a relevant person to comply with
the other requirement.
It is fair to say to a tenant. You can either pay rent until the end of your tenancy or you have two options:
(a) pay me £[say two weeks' rent] and leave on X date and I will take the risk of reletting within two weeks; or
(b) pay my reasonable costs for re-marketing the property and surrender your tenancy immediately before the new tenant moves in and pay rent up to that date.
What is not clear is whether (a) is a one way bet for the tenant by which I mean if the landlord secures a new tenant within the two weeks, the landlord may have to repay any "profit" to the tenant or risk falling foul of the TFA. If that profit is in fact caught by paragraph 7(2) of Schedule 1 to the Act then there is no point offering a tenant option (a).

Chris Daniel

21:23 PM, 7th October 2019
About 2 weeks ago

One of my tenants ( uninitiated in the finer points of the Tenant Fee Ban ) recently asked to keep a pet and offered an additional deposit.
I had to decline, pointing out the cap on deposits by the Government.
The only way I could agree, was if the tenants agreed to a rent increase.
Actually, not a bad option for them, as they'll be paying the extra over monthly increments.
But as for Government vote-chasing campaigns and Brokenballs saying they've saved tenants money, its like Dumb and dumber !

steve p

16:48 PM, 8th October 2019
About A week ago

Reply to the comment left by Chris Daniel at 07/10/2019 - 21:23
Yeah ive had the same issue, I always ask for one months rent plus £100 for the deposit. I dont like to ask for just a months rent as lots of tenants seem to assume this is the last months rent and so many try to say at the end of the tenancy "Well you have my deposit which is a months rent so you can keep that and I wont pay the last month". This obviously leaves nothing for any damages.

This is all fine but for a pet I have usually asked for £100 extra per pet, add this on and it takes it over the 5 weeks deposit limit so I am having to ask for additional rent for pets instead. I guess you could argue it as a win as its less money a tenant has to find at the start of the tenancy but as my tenants usually stay on average 3-4 years+ in the long run it will cost them a lot more..


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