SMF - Just Installed!

Tenant quit with room paid up front

Started by cindyp, April 30, 2024, 05:29:17 PM

Previous topic - Next topic

cindyp

My longstanding tenant of 5 years gave me 1 day's notice to quit because I would not allow her to sublet her room in order to fund a 2 month trip abroad.  My reasons were sound - it invalidates my landlord insurance and a subletter isn't a legal tenant so I can't evict them. 

We are just 6 weeks into a new 6 month AST with a new flatmate (T2) sharing with T1.  It's not an HMO, it's just 2 tenants with their own bedrooms and the rest of the flat is shared. I'm pissed off because the 6 month AST should have meant guaranteed rent for the next 6 months but now I'm having to find a new tenant and repeat with all the tedious tenancy deposit scheme paperwork which I just did 6 weeks ago for the tenancy that T1 has just quit.  I know legally I could chase T1 for her share of the rent under the 6 month AST but we are also in the midst of moving from spain back to the UK so it's a hassle I can well do without. 

T1 pays her rent in advance so her rent has been paid already up til the end of May.

She will not be returning to the the flat (her choice, I would have been OK for her to return)

I now need to find a new flatmate for T2  who is now responsible for paying all the bills in the interim and therefore she would like to have a new flatmate pretty pronto.

My question is, As T1 has paid upfront til the end of May but has given me notice to quit, (which I have accepted and has told me she is leaving the flat on 3 May) can I rent legally out her room from now onwards (which means T2 can then share the bills with the new tenant) or do I have to wait until the end of May because theoretically the room still 'belongs' to T1? 

Riptide

Or there is the 3rd option where you don't get double bubble and the remaining tenant gets to share the bills. When a new tenant is found ask original tenant if you can mutually terminate and refund them.

Hippogriff

If you're asking whether it's OK to have rent paid to you twice for the same 'rented thing', then it would be a "no".

jpkeates

Is it a joint tenancy or are both tenants on their own agreement?

cindyp

Quote from: Hippogriff on May 01, 2024, 07:31:24 AMIf you're asking whether it's OK to have rent paid to you twice for the same 'rented thing', then it would be a "no".

I thought this was probably the case but thank you for clarifying. 


DPT

You could tell T1 that you won't release her from the tenancy and keep the advance payment until the fixed term ends. That way you don't need to find another tenant, although it would mean T2 having to pay all the bills.

cindyp

An update..

T2 has found someone that she would like to share with, although I don't think she has known him for long, she met him recently as a friend of a friend.  Having said that she hadn't met the flatmate who had left for more than a couple of times before they committed to sharing with eachother. Apparently he really liked the flat and they got on really well.


I would prefer to give Tenants the choice of who they share with so provided the guy she has in mind passes the security and financial vetting, I'm willing to give it a go.

However, I'm reluctant to do another 6 month AST in case they don't get on and I'm back to square 1 again. 

Can I put say, a 3 month break clause into a 6 month AST or is that not valid, given that an AST should be unbreakable for the whole term?

I know that if things don't work, I could just allow the tenants to leave  by way of a surrender agreement as it's already been proved to me that I can't stop tenants from leaving anyway without notice if they choose to do so.





 

cindyp

Quote from: DPT link=msg=38076 date
=1714822411
You could tell T1 that you won't release her from the tenancy and keep the advance payment until the fixed term ends. That way you don't need to find another tenant, although it would mean T2 having to pay all the bills.

I've only got 1 month's deposit, and that doesn't cover the 6 month term.  She'd already paid one month in advance up til end May but I possibly can claim on it if I don't get a new tenant after the end of May. 

I haven't given her a surrender notice or anything in writing agreeing to allow her to leave.  I just told her on the phone that I can't stop her leaving.

cindyp

I read this on the Lexis Nexis site...

"Joint assured shorthold tenancy
Where two joint tenants hold an assured shorthold tenancy (AST) together, the joint tenancy continues until such time as it is validly terminated.

Therefore, if one of the joint tenants leaves the property, they remain a joint tenant. No implied sole AST arises in favour of the remaining tenant"

Anyone know if this is definitely the case?   Because our household insurance requires a 6 month AST to be in place for the insurance to be valid.  I was worried that T1 leaving has meant that the 6 month AST is no longer valid.

So where does that leave me with a new tenant joining?  Do I have to issue a new 6 month AST in names of the new tenant and T2?  Or is there any way of legally replacing T1 with new tenant in the original AST agreement and refund T1 deposit less any costs to me and register new tenants deposit as usual?  If new tenant replaces old,  can I assume the agreement is until the orignal 6 month AST runs its term and then go over to periodic tenancy?
.


cindyp

Oh and the cherry on the cake is that T1 left and took the keys to the flat with her 'by mistake' and she's away for 2 months.  She did message and apologise but that means that I now need to change the locks...


jpkeates

#10
Quote from: cindyp on May 05, 2024, 01:13:01 PMAnyone know if this is definitely the case?   Because our household insurance requires a 6 month AST to be in place for the insurance to be valid.  I was worried that T1 leaving has meant that the 6 month AST is no longer valid.
The second person not being there doesn't change anything and that text you quoted is correct.

If your insurance really requires you to have a six month AST in place to be valid, you need to change insurers. That's either a misunderstanding or too prescriptive.

QuoteSo where does that leave me with a new tenant joining?  Do I have to issue a new 6 month AST in names of the new tenant and T2?  Or is there any way of legally replacing T1 with new tenant in the original AST agreement and refund T1 deposit less any costs to me and register new tenants deposit as usual?
You can't just issue a new AST to replace the previous one, the existing one needs to be brought to an end.
If the existing other tenant has moved out and is never coming back, the loose end matters less, of course.  You can assign the tenancy to the new tenant, but that really requires the co-operation of the exiting tenants. Or you can agree to the surrender of the existing tenancy, but, again, that requires the cooperation of the existing tenants.

QuoteIf new tenant replaces old,  can I assume the agreement is until the original 6 month AST runs its term and then go over to periodic tenancy?
That depends on how you assign the tenancy. But a periodic tenancy doesn't seem to meet your insurer's needs.

HandyMan

Quote from: jpkeates on May 06, 2024, 11:59:59 AMBut a periodic tenancy doesn't seem to meet your insurer's needs.

That must be a misunderstanding of what the insurance policy says. Doesn't make sense otherwise.

@cindyp, please could you quote exactly what the policy says please?



cindyp

it says:

J105 - Extended Conditions for Let Properties
Let Property Condition
It is a condition precedent to Our liability that:
• the insured property is NOT occupied by Asylum Seekers
• the tenancy agreement is directly between the Landlord and Tenant(s)
there is a minimum 6 month short hold tenancy agreement in place
Failure to comply with these conditions may invalidate cover in the event of a claim.

cindyp

It's just got even worse.

The tenant that was remaining (who was 3 weeks into the new 6 month AST) had someone lined up to flatshare with her and I'd just started doing his financial screening.  He's on the ball, and asked us if we have any plans to sell the property in the next 6 months or so because he's looking for stability.  We didn't want to lie so we said  we are not planning to sell before the end of 2024.

I think that T2 will now give her notice (because the AST has ended due to T1 leaving) and we'll now have to look for tenants who want a short contract... 

FFS! 

Re the periodic tenancy after the 6 month AST I will have to clarify that with our insurers... 








cindyp

I can't easily change insurers.  The property had historic subsidence when we bought it - vendors didn't declare that... it was in the mid 80s.  (although we had it underpinned 10+ years ago with a 25 year guarantee.)   We had to get quite specialist insurers and last year the premium was increased by 40%!     It's located in London SE4 which is a clay basin and a loss assessor told us that the whole of SE4 is subject to premium loading because of that.  There hasn't been any more movement to the house anyway.   It looks like a Victorian house but its actually 2 purpose built maisonettes and we own the whole property and the freehold.

jpkeates

The first tenancy hasn't ended (based on anything you've posted).

That insurance term means you can't have a statutory periodic tenancy (because that's a series of one month terms). I'm pretty sure that that's not what they intend, but it's what it says.

If post 13 has a typo and you do plan to sell the property shortly, you probably can't reliably let it to anyone if you plan to sell it with vacant possession.

HandyMan

Quote from: jpkeates on May 07, 2024, 03:52:46 PMI'm pretty sure that that's not what they intend, but it's what it says.

Agreed. It's badly drafted.

What, I'm sure they intended is that you have a minimum 6 month AST initially but of course it's not a problem it that continues to be extended to 7 months, 8 months, 9 months... by being periodic.

Tell them that their policy doesn't make sense and ask them to confirm in writing what is really acceptable.

cindyp

thanks Handyman, I will bring this to the insurance company's attention and see if I can get a clear definition.


I spoke to my tenant and her prospective sharer and they still want to go ahead.  However, going forward I'd like to have Tenancy Agreements that work for everyone. 

I looked into things and it seems that I don't have to do a joint tenancy at all, even for a 6 month AST.
According to this NRLA article it is possible to do individual AST agreements for each tenant.   Which means that if one tenant leaves then the other isn't responsible for paying the outgoing tenant's rent for the rest of the term, which always seemed really unfair to me.

it would mean that a landlord can pursue an individual tenant who doesn't pay the rent for example,  without the other  tenant being liable for their rent.  This seems fairer all round.  There doesn't seem to be a minimum amount of tenant sharers so it seems I could take on 2 new tenants with both having their own AST Agreement.

it makes it easier to deal with deposits etc too.  In my current case, my tenants were joint tenants so when T1 left it meant that if I had a dispute with T1 then T2 would also be 'jointly and severally liable'.   I just don't want to make an innocent party liable for something they haven't done.


Anyone got any views on any downsides to this?

https://www.nrla.org.uk/resources/creating-your-tenancy/assured-shorthold-tenancy-agreements-for-individual-rooms









jpkeates

You haven't ended the joint tenancy yet, so this discussion is a bit academic.

If you have two separate tenancies, you, not the tenants, are liable for the council tax (so you need to build that into the rent).

Separate tenancy agreements do mean that an "innocent party" isn't liable for "something they haven't done". It does mean that if someone kicks the front door in or breaks the over, you won't know who's responsible unless they own up.

Both arrangements have plusses and minuses.