Joint tenancy coming to an end - stay or go?

blunt_crayon

Hi all,

I was hoping for some advice on my current situation re renting.

I am living in a 3-bed house in south London with 2 other girls. We pay £650pcm each and when the tenancy comes to an end the agents have proposed putting the rent up 2% so £663pcm each (I negotiated this down from 5%).

I am happy in the house but it's very expensive for me, my take-home is about £1,400 a month so with bills it comes to over 50% of my income. The other girls earn more.

This evening I went to see a room in a friend's house which is nice enough and only £450pcm so would save me £200 a month. The room comes up at the same time as our tenancy expires so I'm seriously thinking about taking it. However I don't want to leave my housemates in the proverbial. We have already had a chat about next steps and I mentioned I was looking at this room. I think they would like to stay on for the short to medium term but could move elsewhere in a few months' time. We will of course discuss it before making any decisions but I think we have two options if I take the cheaper room:

1) They also decide to move out elsewhere and we all leave when the tenancy expires - easy enough, just all the general cleaning and inventory/signing out process to go through.

2) They decide to stay and find someone to fill the room - which could be easy in theory but may not be so straightforward in reality - and what I really need to know is who would be liable for the rent if I move out? The tenancy will expire at the end of the 12 months, in about 6 weeks time - so I think that means I'm not liable for it, is that right? But morally I couldn't let them pick up the bill and £650pcm is a lot of money to find if we have problems filling the room. Will they be unable to sign a new tenancy agreement until they find a third person? And how soon would they have to find someone, within the next 2 weeks, if the tenancy ends in 6? Umm I'm confused

Any advice much appreciated. Thanks.

ETA: the letting agents want to renew the contract for a further fixed term (12 months) when it expires in 6 weeks, not let it go periodic. But they did say a while ago they could extend it by 1 month to give us until end August to decide whether to proceed with the renewal, which could be an option if time is tight.

BitterAndTwisted

Of you do decide to take the other place and you're on a joint-tenancy you will need to give notice to the agent/landlord IN WRITING. This will then end the tenancy for all three of you. What the other two people decide to do is up to them and the landlord.

G_M

If you have a single contract bewteen th 3 of you ('joint and several') then you are ALL equally liable for the full £1950 rent.

If the other two do not leave at the end of the fixed term period, then the tenancy will not have ended (unless they have agreed and preferably also signed) a new tenancy agreement in their, but not your, names).

Since the tenancy has not ended, you would still be liable for rent (though in practice the LL is likely to chase the two remaining tenants for the full rent in the first instance - simply because it's easier).

Of course, if you each have a separate contract, it's easier. You just leave at the end of YOUR fixed term, and your liability ends.

Assuming the first scenario, and assuming you leave and the other two want to stay, it is important you get written agreeement from the landlord that the original tenancy is ending (thus your liability ends) and a new one is starting (either with the 2 remaining friends, or with a 3rd new person too).

blunt_crayon

G_M wrote: »

If you have a single contract bewteen th 3 of you ('joint and several') then you are ALL equally liable for the full £1950 rent.

If the other two do not leave at the end of the fixed term period, then the tenancy will not have ended (unless they have agreed and preferably also signed) a new tenancy agreement in their, but not your, names).

Since the tenancy has not ended, you would still be liable for rent (though in practice the LL is likely to chase the two remaining tenants for the full rent in the first instance - simply because it's easier).

So even if the tenancy is a fixed term ending 31 August, if the other 2 don't move out, somehow it continues? The letting agents have stated they won't let it go periodic, i.e. we would need to agree a new contract for the next 12 months. So if I have understood correctly - I either notify them by 31 July that we are all moving out or I notify them by 31 July that I am moving out and the other two are staying - but you seem to be saying that in this latter case I'd still be liable for rent after 31 August - even though the original 12 month tenancy has expired we're still tied in?

may_fair

blunt_crayon wrote: »

So even if the tenancy is a fixed term ending 31 August, if the other 2 don't move out, somehow it continues?

You and the other girls together comprise 'the Tenant'. If the tenant (i.e. all of you) does not vacate at the expiry of a fixed term AST, and no new contract is agreed, then a periodic tenancy arises automatically by law.

The letting agents have stated they won't let it go periodic, i.e. we would need to agree a new contract for the next 12 months

The LL/agent cannot force anyone to sign a new contract. If you don't, and you don't all vacate at fixed term expiry, a periodic tenancy will arise regardless of whether LL/agent likes it or not.

So if I have understood correctly - I either notify them by 31 July that we are all moving out or I notify them by 31 July that I am moving out and the other two are staying - but you seem to be saying that in this latter case I'd still be liable for rent after 31 August - even though the original 12 month tenancy has expired we're still tied in?

Option 1: All of you vacate on 31st July, thus ending the tenancy. There's no requirement to give notice.

Option 2: You alone vacate on 31st July, but this will not, in itself, end the tenancy (and your notice would have no effect). If the others don't move out, a periodic tenancy will arise (assuming no renewal or other contract is agreed). You all remain liable for rent until the tenancy ends. In a periodic joint tenancy, only one of the joint tenants need serve notice to end the whole tenancy, so you could give notice on or after 1st August. The tenancy would end at expiry of your notice (and the other girls would have to move out or come to an agreement with the LL).

Option 3: Come to a mutual agreement with the landlord, whereby he agrees to end the current tenancy, and signs a new contract with the girls who don't want to move out (plus perhaps another person to replace you). As G_M says, make sure everything is formalized in writing. The girls who stay put should be aware that the new tenancy would be completely separate from the current tenancy, so there should be a new check-in inventory conducted, new deposit protection etc.

blunt_crayon

A response from my letting agent:

I have a few questions about options/legalities relating to the end of our tenancy, as I have potentially found a room that is much more affordable for me.

1) If I was to decide to move out at the end of the contract but Hayley and Kate stay and find someone else for my room, would they need to create a new 12-month tenancy agreement or amend the ongoing contract – I recall you saying this cost £165?

If any of you are going to stay on then a new 12 month contract would be drawn up. At the moment he landlord bears the cost for arranging subsequent tenancies. The tenant replacement procedure is £165 + VAT.

2) How much would the 12-month renewal cost – my understanding is that this isn’t legally required but you implied in an earlier email that the landlord would want us to sign another fixed term?

As above.

3) I’m concerned about being left with a gap if we couldn’t find someone and how we would cover the rent for the empty room. Do you know what the room rental market is like at the moment, is it easy to find people?

You shouldn’t have any problem finding a tenant fro the room as long as you give yourself long enough to find someone (we usually begin marketing a flat 5 weeks before the availability date to give you some idea).

4) How quickly would we need to find someone else if they have to create a new tenancy agreement – by one month before the contract expires i.e. not very long?

The full rental will need to be paid whilst the tenancy continues. If you are going to move out and end the tenancy you need to give a minimum of 1 months notice to end the tenancy the day before the rent falls due. It will usually take us about 2 weeks to get the new tenant referenced and the paperwork signed.

5) What would happen if they weren’t able to find another tenant to replace me – would we all be liable for the rent?

Yes.

6) If we all decide to leave at the end of the contract, what are the exit costs?

The check out report is paid for by the tenants (approx £150), + cleaning costs.

7) What is the official end date of our tenancy? We moved in on 8 September 2010.

The term is due to expire after the 7th September – your move out date would be the 7th September.

blunt_crayon

Further conversation:

So what would happen if I decide to move out and give notice by 6 August which is 1 month before the end of the contract, but we hadn’t found a new tenant by then? Despite giving notice, I remain on the same tenancy (jointly and severally liable) – we don’t need to have found the third tenant by 6 August in order to create the new agreement?

If you give notice you do so as a group – otherwise the tenancy continues and you do a tenant replacement. If you do a tenant replacement the outgoing tenant is obviously liable for rent up until the replacement has passed references and a new tenancy agreement has been signed.

blunt_crayon

Does that all sound legit??

G_M

You need to understand the difference between you giving notice/moving out (as an individual), and the three of you giving notice/moving out.

If all three of you move out on/before 7 Sept, no notice is needed. The Fixed Term ends, you move out, the tenancy is over.

Similarly if a NEW contract is signed between your 2 friends and a n other with the agent, then NO notice is needed. Again, the Fixed Term ends and the 2 remaining tenants start a new contract (+ one if appropriate). However I imagine the agent would want time to credit check/reference the new tenant (2 weeks they say?) so this papaerwork needs to be done in good time.

The difficulty arises if you move out, the other 2 stay and NO new contract is signed, since then, as explained, the original contract continues and you remain liable.

So it all depends on the other two:
a) can they find a 3rd tenant in time to start a new tenancy on 8 Sept (thus ending your current tenancy)?
b) if not, will they be willing to sign a new contract on their own and take on the full rent between the 2 of them from 8 Sept (thus ending your current tenancy)?
c) if not, will they move out on/before 7 Sept with you thus ending the tenancy?

or will they just stay (perhaps hoping to find a new tenant in due course) leaving the existing tenancy running, and you equally liable for rent?

Re costs:
'At the moment he landlord bears the cost for arranging subsequent tenancies.' - so you should not have to pay for a new tenancy after 8th Sept
Check-out report £150 - is this in your contract or was it specified in writing at the start? If not, they cannot suddenly introduce it!
Cleaning - can only be charged if it's needed! So provided you clean the property to the same standard as when you moved in (as described in the original inventory), no cleaning charge can be made.

blunt_crayon

Thanks, this is really helpful.

They would not take the full rent on between two so it is as I thought that we would:

a) all have to move out (but good to know we aren't required to give notice, as that would have meant making a decision in the next 2 weeks - should I check my contract or is this the law?)

b) I'll have to take the risk that if I agree to take the new place but can't find someone else for my old room immediately, I'd have to pay both rents... as I would be liable until a new person is found... as I don't want to force them to move if they don't want to and can't ask them to pay the cost of my decision to move out.

Re costs it is specified in our contract that the landlord covers moving-in costs and we cover moving-out costs.

Hmm... so complicated... so much easier to stay, but so much money to be saved by moving!!

G_M

blunt_crayon wrote: »

Thanks, this is really helpful.

They would not take the full rent on between two so it is as I thought that we would:

a) all have to move out (but good to know we aren't required to give notice, as that would have meant making a decision in the next 2 weeks - should I check my contract or is this the law?)It's law. Sometimes poorly worded contracts have clauses requiring you give notice, but these clauses can NOT be enforced. Ignore them or the agent if he says different. It's a fixed term contract. It has a start date plus either a period (6 months?) and/or an end date (7 Sept). So that's when it ends. UNLESS (one + of) you stay in which case it automatically becomes a Periodic tenancy.

b) I'll have to take the risk that if I agree to take the new place but can't find someone else for my old room immediately, I'd have to pay both rents... as I would be liable until a new person is found... as I don't want to force them to move if they don't want to and can't ask them to pay the cost of my decision to move out.

Re costs it is specified in our contract that the landlord covers moving-in costs and we cover moving-out costs.Again, the contract must specify the amount - they cannot arbitarily introduce a fee otherwise they could say "Hmmm give us £2500 for check -out fee!"
Re cleaning, again, whatever the contract says they can only charge for cleaning as described in post above.

Hmm... so complicated... so much easier to stay, but so much money to be saved by moving!!

Good luck.