It happens! Tenants find a property they want to buy, lose their job, get a job in another town or discover they have another child on the way. They request an early end to their tenancy. It sounds like a pain but at Belvoir we think that, if managed well it need not leave landlord or tenant disgruntled and can in fact be favourable to both.
The end date of a tenancy agreement is added to protect landlords and tenants:
- It provides security of tenure for the tenant. Unless they break the conditions of their tenancy, they know they have a home until the tenancy end date at a minimum.
- It provides security of rental income for the landlord. The tenant has an agreed tenancy end date, so you know when the search for new tenants needs to start and you can plan any required repairs/refurbishment if needed between tenants.
When a tenant in a fixed term contract asks to leave their tenancy early a landlord’s gut instinct can be to say no, but there is little genuine reason to refuse. Whilst being within a landlord’s rights to say no, why do this and risk souring the relationship with the tenant for the remainder of the term?
9 reasons why we consider it advisable to let a tenant leave early:
1. The tenant remains liable for rent and utility bills until a replacement tenant can be found or the end of their tenancy, whichever is sooner. For the landlord this can minimise the chance of a void period between tenancies plus you know your existing tenants will be motivated to accommodate viewings and point out the best features of your property if they are at home.
2. The tenant has to also pay the landlord ‘fair costs‘ which means covering the pro-rata costs that they would incur for the new tenancy such as the letting fee and the inventory.
3. Maintenance issues could increase with a disgruntled tenant and you could experience delays in paying your rent. Outgoings are on the rise but income to offset it is at risk.
4. If the tenant becomes difficult about allowing viewings during the remainder of their tenancy the chance of a void period between tenancies is increased which ultimately costs the landlord.
5. Forcing a tenant to stay put significantly increases the chance that they will leave the property early without consent. This is when arrangements get messy (as well as the house, possibly!). The tenant may leave owing rent, and we then have to implement processes to manage this from the deposit. A landlord could be out of pocket if there isn’t sufficient deposit bearing in mind that they also need to cover the cleaning and inventory checks needed to prepare for a new tenant.
6. Managed effectively, a void period might be eliminated almost entirely if the current tenant can move out and be replaced by a new tenant in a couple of days? Entirely possible if you use Belvoir to manage the situation effectively, and have your current tenant on board during viewings.
7. It’s most unlikely that your tenant will want to leave tomorrow. Most will give at least a month’s notice. That allows Belvoir time to find new tenants using their traditional marketing plus social media marketing methods.
8. We would start the process as early as possible to find a new tenant, process referencing then sign them up to a new tenancy agreement. It’s something the landlord would have to do anyway at the end of the tenancy so it’s just being implemented earlier than anticipated. Not really a big deal.
9. Early termination leaves an opportunity for Belvoir to work with the Landlord to review the rent charged. It may be a good time to increase the rent to the next set of tenants earlier than you had anticipated depending on the state of the market and any property improvements undertaken.
At Belvoir we have a tried and tested set of procedures to manage a request for early release from tenancy – including making sure the request comes from all parties so we don’t end up with a tenant turning up from overseas to find someone else in their living room!
