Tenancy surrender - is this permissible ?

SK55607

I have a tenant who want to leave my property with several months left on the rental agreement (no break clause). My estate agent has recommended that the tenant simply be held to pay the rent until I find a new tenant and charged for my and the agents expenses. This is O.K. but my instinct tells me to charge the tenant 2-months rent plus the expenses and let them go. I am pretty sure I can find a new tenant in this timeframe and the tenant needs to leave the flat and does not want to be there. Is there anything stopping me doing this if the tenant agrees ? Do any of the laws that cam into effect last year or are existing prohibit mean from coming to this agreement with the tenant and putting it in a surrender contract (my agent will draw up the surrender contract) ?
Thanks in advance for any help I get !

wesleyad

You can agree anything you want. But you cant charge double rent so you may end up owing the tenant if you do option B.
Out of interest, how much is agent charging for drawing up "surrender contract". It's literally "I agree to surrender the contract on these terms" signed you.

newsgroupmonkey_

Depends on the local market. I was the tenant in this case, but knew the market was very  buoyant. It did help that we were living in a 3 bed semi for at least 10% less than the going market rate. There aren't many of those pop up as it is around my area, mostly 2 up 2 downs or flats.

As it turned out, we had to pay ~7 days rent after we moved out plus the reletting costs, so I would have been miffed if my LL was asking for 2 months. We paid our monthly rent as usual and were refunded the difference after the new tenants moved in.

Nothing wrong with asking for 2 months up front to let them move out now, but you should be giving them back the difference once a new tenant moves in (as happened with us)

Retired_Mortgage_Adviser

newsgroupmonkey_ s

Nothing wrong with asking for 2 months up front to let them move out now, but you should be giving them back the difference once a new tenant moves in (as happened with us)

That might have been the case a year ago, but after the TFA, this can be interpreted as a prohibited payment as it exceeds the landlord's actual loss at the point that it is charged. This can leave the LA/LL open to a fine.

Hence the LA suggesting what he did.

SK55607

Thanks everyone for the answers. Wesleyans - the estate agent has not given me a cost for drawing up the surrender contract so this will be the next thing I find out, thanks for the warning. From everybody else's comments I've assumed your comment about 'owing the tenant' means I'd be expected to hand back any difference in rent if I filled the flat earlier than 2-months. On a separate note I had a long let (with a guarantor), nearly 2 years and the tenant is going after 10-months. This means to my mind that guarantees etc. don't mean much in this instance, I'm expected just to let my flat out again - be reasonable and not expect anything more than my loss = the next tenant I should be looking for should have a very stable job, happy in the flat and being charged a reasonable rent ??? Do you think my interpretation is correct ?

Sensory

I'm on the opposite side, and I'm expected to pay all fees, charges and associated costs with re-letting the property, which is fair (and stipulated in my tenancy agreement). Your agent should not be charging you fees to draw up the Surrender Agreement, as it's related to the tenant requesting Early Surrender of the Tenancy. Ensuring you are not at a loss is the fairest outcome; expecting to make an increased profit when the existing tenant is already paying additional fees (to ensure you are not at a loss) would be unreasonable (and I believe potentially unlawful).

Apparently you're also not allowed to benefit from any rental increase from the new tenancy; the difference between the original rental and higher rental would be deducted from the original tenant's surrender fees. Equally, the original tenant would be responsible for reimbursing you for any shortfall in rent, should the rent of the new tenancy be lower than the original. This is the information Savills communicated to me.