Tenancy Agreement Advice

KJB87

Hi all,

Am looking for some advice from a fellow landlord, hopefully someone on here can lend a hand.

We are reluctant landlords (had to let property out to relocate for work due to not being able to sell as tied into our mortgage product) and let our property out from 1st March this year. We were lucky enough that our neighbours who were renting wanted a bigger place and so we let to them without having to find and pay any letting agent fees, we did of course put an agreement (12 months) in place so everyone knew where they stood.

Fast forward several months and they want out of the agreement early, and say they want to move around September/October time. We have a clause in the agreement:-

"If you give me notice that you are going to leave the property before this agreement has ended, you must pay my reasonable costs for re-letting the property as well as paying the cost of your rent until a new tenant moves in."

We have decided to sell the property and are starting to arrange getting it on the market (as our tied mortgage product ends in 2 months), but both myself and my partner have differing views on the above clause.

Will the clause still ensure the current tenants pay rent until we either sell or the agreement ends next March as we are not re-letting but selling? Partner says yes, I'm not so sure so thought I'd check for other views to get some more clarification.

Apologies for the long post, I didn't realise I was going on so much.

Thanks in advance for any opinions.

Planner

The clause would sill allow the tenant to give notice to leave.

The clause would not allow you to claim re-letting fees as you arent re-letting.

The clause would not allow you to claim rent until a new tenant moves in as there will never be a new tenant because you are selling.

KJB87

Thanks Planner, that was exactly what I thought.

In your opinion, obviously if we end up re-letting we will have to use an agent who charge a fee for finding a new tenant. Would this charge be seen as a reasonable cost for re-letting and as such charge the current tenant for it?

Thanks again...

tbs624

KJB87 wrote:

Will the clause still ensure the current tenants pay rent until we either sell or the agreement ends next March as we are not re-letting but selling? Partner says yes, I'm not so sure so thought I'd check for other views to get some more clarification.

So, are you saying that you will now hold your Ts to their full fixed term purely because you would rather sell than re-let, despite having a clause that gives them hope that they *can* go early if they pay the fees as outlined in the clause?

You perhaps also need to bear in mind that the Ts have exclusive occupation and may decide not to permit viewings by potential buyers.

DVardysShadow

KJB87 wrote: »

Hi all,

Am looking for some advice from a fellow landlord, hopefully someone on here can lend a hand.

We are reluctant landlords (had to let property out to relocate for work due to not being able to sell as tied into our mortgage product) and let our property out from 1st March this year. We were lucky enough that our neighbours who were renting wanted a bigger place and so we let to them without having to find and pay any letting agent fees, we did of course put an agreement (12 months) in place so everyone knew where they stood.

Fast forward several months and they want out of the agreement early, and say they want to move around September/October time. We have a clause in the agreement:-

"If you give me notice that you are going to leave the property before this agreement has ended, you must pay my reasonable costs for re-letting the property as well as paying the cost of your rent until a new tenant moves in."

We have decided to sell the property and are starting to arrange getting it on the market (as our tied mortgage product ends in 2 months), but both myself and my partner have differing views on the above clause.

Will the clause still ensure the current tenants pay rent until we either sell or the agreement ends next March as we are not re-letting but selling? Partner says yes, I'm not so sure so thought I'd check for other views to get some more clarification.

Apologies for the long post, I didn't realise I was going on so much.

Thanks in advance for any opinions.

As others have said, if you are not going to make an honest and genuine attempt to let the property, you are not entitled to claim on the clause in question. Looking at what is happening, it looks to me that the tenants are actually doing you a big favour by covering your property until the mortgage deal runs out and then moving on.

The time of year is perhaps not the best for selling if you leave it until they have gone to actually go on the market, but then if you look for another set of tenants to cover you over the winter, it could be mid November until you find them, meaning you can't put it on the market until mid May - you will be late for the spring.

Your best bet is to offer to let the clause drop in exchange for your tenants' fullest co-operation in selling the house and go on the market maybe 6 weeks before their notice comes into effect. This will get you on the market for the autumn, when you will expect some activity. You do need to think about minimizing the impact of viewings on the tenants - agreeing times and not dropping in on them with short or no notice.

The downside is that it can be difficult to sell with tenants in place - but you and the Agent can always make the point that it is the tenants who have given notice. And if the tenants are there for viewings and back this up, it will not look to be such a problem to potential buyers as it would if you were selling having given notice to reluctant tenants.

Jowo_2

Did you knock up some amateur agreement on the back of a napkin or did you use a proper AST?