Ending an AST agreement before the end of the fixed term

markojanicki

Hi there, I hope you would be able to give me advice in this matter.

4 of us rented together a house, signing the Assured Shorthold Tenancy agreement for a fixed period of 1 year.
However, after some time, for private reasons we thought it would be good if we could end the agreement earlier, precisely after 6 months.
We have found another 4 persons interested to move in exactly on the day we are leaving, so the property will not be empty for a single day.
I spoke both to LA and LL, and they both said they are fine with it.
They have passed all the references and checks requested by the LL and LA. They have to pay to the LA for these checks, naturally, and we agreed to split the costs between us (old and new tenants).
However, I have been informed by the LA today that they are in process of making the surrender agreement which we should sign next week. I thought it is to be done as assignment. What is the difference here? When I asked them if there will be any penalties from our side, they were unable to tell me.
What I would like to ask is: can they actually request any penalties from us, provided that we ourselves found new tenants, that the LL has no damage or loss of rent. I am a bit worried because we have a) paid
the deposit; b) paid part of the rent ahead. We did find the new tenants precisely for the reason to avoid any penalisation etc. The agreement in this regards says only the following: "the tenants must repay the LL's expenses for re-letting the property and for any loss of rent if the tenancy is brought to an early end."
Marko

jamie11

A surrender agreement will free you from any possibility of being chased in the future. The agents seem to be starting a new agreement with the new tenants. That is good from your point of view.

Benji

I agree with Jamie11.

The only real difference is that with an assignment, they take over your tenancy, and with a surrender your tenancy comes to an end and they will start a new one.

For deposit purposes a surrender is far tidier.

G_M

As for charges/fees, since you are asking the LL to release you ealy he can ask you to pay any associated costs. So if the letting agent charges for drawing u the surrender document it would seem fair to charge you (a reasonable amount). After all, if the LL held you to your original tenancy there would be no surrendor document required.

In many similar cases the LL also charges rent between tenants (if there is a gap) and advertising /vetting costs etc. But as you found the replacement tenants and have sorted the vetting costs, this should not apply.

markojanicki

Thank you all for your quick and reassuring replies.
When you write: "So if the letting agent charges for drawing u the surrender document it would seem fair to charge you (a reasonable amount)."
I agree that they should be paid for the extra work they do because of this, and that we should be liable to pay this (not the LL or new tenants).
Can you just roughly indicate what do you think is a reasonable amount for such a case (drawing a surrender document), so that when they come with a figure I know if its is too much or reasonable?

Benji

Well this is a template for a deed of surrender that you could use directly with the landlord http://www.landlordzone.co.uk/forums/showthread.php?28080-Surrender-of-lease-deed-or-letter&p=209236#post209236

G_M

LL could simply draft a letter.

If he asks his agent to do it...... £15?

markojanicki

I have been reassured with your answers, however it looks like that the agency is eager to get some extra money for nothing!

I can't call it other way than blackmailing.

They tried first to not give me any information, assuring me everything is fine... finally yesterday they gave me the surrender deed and said the fees would be: 117 per person for reference check for new tenants, 95 for new tenancy agreement, 60 for deposit name changeover. They urged me to sign the deed and pay the fees before the reference process is done. I declined, saying that I wanted to do it at the same moment when new tenants come to sign new agreement.

Today I got a call from them, saying that LL had changed her mind, that she wanted new tenants to stay not just for the rest of the period of the initial contract (6 months), but for a whole year (so additional 6 months) and that I therefore have to pay the LL's fee to the agency for letting the property for 6 months, which is another 1000 pounds!!! The other option is that I have to stay for the whole tenancy period and cannot even ask for name change (assignment). Immediately I got in touch with the LL and she said she didn't know any of these - the only things she knows is that the agency called her the day before and told her that the new tenants are not going to work (I note that to me they said that reference is still in process and that they actually want them, but not for 6 months only, but for a year)...

I am totally confused, the only thing I know is that the agency is trying to get some extra money using our situation and the fact that we disclosed them everything, and that they were using the last 10 days to get us into position where they think we cannot but accept their blackmailing.

Please advise what I should do. The contract only says that the tenant must repay LL's expenses for re-letting the property and for any loss of rent if the tenancy is brought to an end earlier than the period of the agreement - not that I have to pay her expenses for letting it for another 6 months after my agreement is finished - especially since she told me she didn't ask for that.

G_M wrote: »

LL could simply draft a letter.

If he asks his agent to do it...... £15?

jjlandlord

markojanicki wrote: »

They urged me to sign the deed and pay the fees before the reference process is done. I declined, saying that I wanted to do it at the same moment when new tenants come to sign new agreement.

What do you care about new tenants signing a new agreement?

Once the Deed of Surrender is executed, your tenancy, and thus your liability will end (obviously you should carefully read and agree to the terms on the deed).
The referencing fees they were asking for were cheap in comparison to you staying stuck with the tenancy.

markojanicki

Thanks you, could you please clarify what you mean? They want us to pay total of 1625 pounds for surrendering the contract. Yes, it is less than staying with the flat, but are they in right to demand so much? And it is still perhaps not the end, because who guarantees that they will not come with something new if I agree to this? And if I sign the deed of surrender, how can I be sure they would pay me back the advanced rent I have paid (not deposit) in amount of about 40% of the rent until the end of the tenancy.
Do you think hiring a solicitor would be a good idea in this case or it's another money-wasting move?

jjlandlord wrote: »

What do you care about new tenants signing a new agreement?

Once the Deed of Surrender is executed, your tenancy, and thus your liability will end (obviously you should carefully read and agree to the terms on the deed).
The referencing fees they were asking for were cheap in comparison to you staying stuck with the tenancy.

jjlandlord

markojanicki wrote: »

They want us to pay total of 1625 pounds for surrendering the contract. Yes, it is less than staying with the flat, but are they in right to demand so much?

Yes. They can demand whatever they wish and it is up to you to consider whether it is worth it. You are bound for the whole of the term...

markojanicki wrote: »

And if I sign the deed of surrender, how can I be sure they would pay me back the advanced rent I have paid (not deposit) in amount of about 40% of the rent until the end of the tenancy.

When did you pay that?
What is the arrangement regarding the allocation of that rent in advance to actual rent periods?