Early Surrender costs? is this standard or 'mates rates'?

23rdspiral

I'm a landlord who has just had notice that the tenant wants to Surrender Early, 3 months into a 1yr contract. They have offered to pay 70% of my costs. I thought that the tenant would be asked to pay 100% of costs in this instance?
The tenant is related to the Letting Agent... so I was wondering if this is standard or 'mates rates'?


From reading this forum i understand that costs usually charged to the vacating tenant include:
* re-advertising
* letting agent fees
* legal fees for new contract
* Inventory clerk fee for new tenancy


I've been a landlord due to circumstance for several years, always using a letting agent to manage the property and have not had this issue come up before. I wouldn't want to make them stay somewhere they are not happy. But equally I do not wish to be out of pocket. If they'd approached me asking for a 3 month rental I would not have agreed in the first instance.

Cissi

You absolutely have a right to ask for 100% of your costs back - and until a new tenant is found, the current one has to continue to pay rent - unless of course you have agreed to the early surrender?

Make your position clear to the agent and tenant, in writing. Not sure where you stand if the LA is fully managing the property on your behalf and they have made a deal with this particular tenant, but I'd have thought they are obliged to follow your instructions - hopefully someone else knows more!

sandsni

TBH, you would be entitled to charge them the full rent for the full contract period, so you're being very reasonable even allowing early surrender in return for 100% of your costs for reletting and not adding on rent for any void period.

G_M

You employ the agent.
You decide what you want.
You instruct the agent, in writing.
The agent does what you tell them.

OK - now that is understood, what is the current status of your instruction to the agent? If
1) the agent has been delegated (by you) full decision-making in the management of the letting, via your contract and
2) has made an agreement with the tenant
then there's nothing you can do

If 1) above is true, but not (yet) 2), then you can change your instruction - do it fast, and in writing.

If you have budgeted for new tenants every 12months, and suddenly it is every 3 months, you will be grossly out of pocket.

So it is reasonable to make ALL your costs a condition of agreement to 'Early Surrender'. Only you know what your costs will be (will you advertise yourself? at what cost? Will you pay the agent for tenant-find?.....), so work them out, put them in writing and instruct the agent to propose them to the tenant.

The tenant can either
* accept
* stay 9 more months or
* leave and be sued

Kynthia

As G_M states, you are entitled to 12 months rent from this tenant and you don't have to let them leave. However sensibly you don't want to force a tenant to stay if they really want to go as it can cause problems. So be flexible but don't be out of pocket, it's a business and you have a contract.

Make sure you really understand what your costs will be. Your agent might charge you more than just tenant find fees but may also charge you other fees for the ending of the original tenancy. Ask them for all the costs you will incur. Then you can make a choice, charge your teanant a surrender fee, get them to sign a surrender deed after they move out and give you the money. Then find a new tenant through the agent. This has the advantage of allowing the tenant to plan for a set cost to surrender and could mean you'll end up in profit if you find another tenant quickly. However it does risk you being out of pocket if the fee is too small and you don't find a tenant quickly. Otherwise ask the tenant to pay all your fees and state they'll have to continue paying rent until the next tenant moves in. This can be uncertain and does cause conflict if a new tenant pulls out last minute even though the original tenant has moved out.

[Deleted User]

It may well be that this is just the LA forwarding on what the tenant has said rather than an agreement that the LA has made with the tenant. Clarify this.

I'd regard it as what the tenant wants.., which is different to what you need to avoid losses.

Calculate the losses fully as advised above and make a counter proposal.

fragmast3r

i was a tennant, and 3 months into a 12 month conract we found a house to buy, LL asked us to ay 100% of costs and pay rent until tennant ready to move in , so im agreeing with above, they should pay you 100% to readvertise and rent until the day new ones move in, only fair.