Landlords: What can you do if a tenant wants to leave during a fixed term tenancy?
A tenant requesting to leave before the end of the tenancy can cause unexpected stress. In this article we will share some suggestions of what can be done in this situation.
After marketing your property for rent and going through the process of viewings, applications, references, getting the property ready and clean you can finally rest easy, knowing that you've chosen a great tenant for your home and they are happy and settling in. You have signed a 12-month contract with them, so you know you won't have to go through this process again for at least 12 months and can relax a little.
Until you hear from your tenant out of the blue. Something's come up, and now they want to move out long before the contract expires.
What should you do?
Do you have to go through the whole process again?
It can also be a terrible blow financially- there may have been a void period to account for and then the fees to set the new tenancy up so you may feel you have barely got the property back to a break-even point before going through the process all over again.
So, what should you do? Do you have to allow the tenant to leave early? If yes, what is the point of a fixed contract in the first place?
We will explore the options available to you to help you decide the next steps that are right for you, your property and your tenant.
- You could refuse - Contractually your tenant has agreed to pay the rent for the full term. This can be every month, as the contract states, or they could buy themselves out of the contract by paying the amount owed in one go. The flat refusal could however cause tension and they may choose to leave anyway then stop paying rent. You would have the burden of pursuing them through the court for the monies owed.
- You could agree - A contract can be ended by mutual agreement, so if you agree, the tenancy can be terminated at any time. Of course, if you simply agree to end the contract, you'll be at a disadvantage, with relet fees to pay, so it might be a good idea to negotiate a deal with the tenant.
- Negotiate a fair, early termination - Perhaps you can come to an agreement whereby the tenant gives notice and then pays all or a proportion of the renewal costs, as permitted under the tenant fees act and the rent until a new tenant moves in to the property. This enables you to find a replacement tenant without incurring unnecessary charges as a result of their decision to break the contract early and they are removed from the liability of the contract as requested.
- Re-assign the agreement - On very rare occasions, you could re-assign the agreement. This means the tenant has found someone else to rent the property in their place. Not the same as a sub-let because the outgoing tenant wouldn't want to continue responsibility for the property and the new tenant, but if they had a friend that could move into the property in their place, the contract could effectively be swapped over. There would still need to be acceptable references and a new tenancy agreement. Still, it would allow your tenant to leave early, and you are in the same position, simply with a different person living in the property.
- Sub-let until the end of tenancy - This is more common with sharers and student properties but the outgoing tenant could find someone else to move in but the original tenant would remain liable for the rent and terms of the contract. They would ultimately be responsible for ensuring the rent is paid on time each month until the end of tenancy (they can collect it from the subletee) and the property is well maintained as there would be no transfer of deposit liability or names on the contract.
It can be hard to hear that you have to deal with this situation, particularly when you thought everything was fine and wouldn't have to think about it again for at least a year. But, sometimes, life gets in the way of the best-laid plans, and your tenant has to leave. There are ways to deal with it so that no one loses out; you're not left without the income you are owed, and your tenant isn't forced to pay for a property they can't live in.
A bit of practical problem-solving and negotiation and a mutually fair agreement to terminate the agreement not leaving you out of pocket and giving the tenants the outcome they desire. The support of an agent to assist with the negotiations and facilitate the process can be hugely beneficial. Of the hundreds of tenancies we manage at Sandersons UK, changes in tenant circumstances can be inevitable from job relocations to relationship changes, family matters arising etc. We are experienced in managing the early termination process should it arise.
Get in touch with our team of experts today for more information on what you can do with your tenants and rental properties in this scenario.
