Tricky conversation with tenant - advice needed please!

[Beakyok]

I know there are quite a few landlords on MN and I’m hoping some of you can advise me on a difficult conversation I need to have with a tenant.

A bit of background info…the house is let after I moved overseas with my husband. We are back in the country and I manage the property myself. I know we are fortunate to have it as the extra income means I can work part-time. However, the last couple of years have been financially and mentally draining with it. A tenant moved out just before the first lockdown…to cut a long story short…due to ongoing repairs, decoration etc the house was empty for a year whilst I was on maternity leave - no money! A new tenant moved in April 2021…she paid 6 months up front but didn’t stay beyond the 6 months AST agreement. A new tenant moved in Oct 2021…there was a lot of interest and I could have let it several times but chose this tenant on the condition she signed for a year.

All good, except this week the tenant has written saying they are giving me 2 months notice and want to end the AST agreement early due to noisy neighbours (news to me) and that they are unhappy with the area.

I know I can’t make someone stay or continue to pay the rent but I’m so fed up! Specifically because of the expense each time of finding a new tenant - a month’s rent each time to the estate agents plus my time of showing round the tenants etc, not easy with two young children whilst working. In the past year that means 2 months worth of rent has gone to the agents.

I will be meeting the tenant to discuss this further. I feel that they should pay the equivalent of a month’s rent extra to cover the agency costs. How do I put this to the tenant without them saying that I would have to pay that cost anyway in another 6 months - which technically I would do. I’ve never had a tenant cut short the AST. What do people advise please? Tia

Charging tenants fees to let a property has now been prohibited. Yes, it’s frustrating but it’s your cost as a landlord to shoulder - and I say this as a fellow landlord. If you can’t afford fees and void losses, you can’t afford to be a landlord and need to sell up.

Is there a break clause in the contract?

Why do you have to use an agent? I manage my flat myself. I advertise on FB, take people round to view, do the checks, decide on the lucky tenant and take the deposit and upfront rent. It's quicker, no waiting around for the agents, and I'm in control. My current tenant has been in residence for eleven years with no problems.

Is there truth in what she says about noisy neighbours? Were any of the other neighbours there before you moved away who you could ask? This might keep happening, meaning you either need to cut your losses and sell, or take on a battle via the council.

Does the tenancy agreement have the length of the tenancy specified? It should detail the tenants financial obligations for breaking the agreement early.

No that isn’t reasonable and I don’t think it’s legal.

I assumed your post would be about how you can address the anti social neighbours issue. this sounds like a pattern and potentially a real ongoing problem given the short lease times on your tenants…

What does the tenancy agreement say? If it's not in the agreement then no, you can't charge them.
It's not the tenant's job to pay your fees for you. It's a business.

I second looking at your contract to see what it says about leaving before the lease period is up.

I don't understand why you're using an estate agent and yet doing the viewings yourself? If you're doing the viewings anyway, why not manage the property yourself, and advertise yourself for tenants online with Openrent? This gets your advert onto all the main selling pages- Rightmove Zoopla etc.
Open rent are very good on the whole, and very reasonably priced. They can also do the referencing for you once you have found a suitable tenant, and the contracts and the other essential paperwork.
When advertising my properties I always state in the advert what sort of income they need to be accepted as a tenant, as I often find people apply but it's clear that they would struggle to pay the rent on their income. I check that they meet that requirement fairly quickly once they reply to the advert, otherwise it is a waste of their time and mine.
You'd benefit from belonging to one of the landlord's associations to keep up to date with all the requirements.

@Blossom64265

Does the tenancy agreement have the length of the tenancy specified? It should detail the tenants financial obligations for breaking the agreement early.

This. If she has a 12 month contract, she can't just leave part way through. She needs to come to an agreement with you. You could make her stay until the end of the contract if you wanted to. But you could be reasonable and say that she has to show prospective tenants around and that she can move out when you have found a new tenant.

You can advertise with the likes of Upad so that you don't have to pay an agent.

• if she has a 12 month contract, she can't just leave part way through, unless the contract allows her to.

Are they not required to remain (or pay rent till October) if the term of the lease was a year?

They’ve signed a year’s AST in October 21 - it would be very unusual if there was a break clause at 4 months. So they can’t just ‘cut it short’ and move as that’s the entire point of the AST term. What does the contract say?

If there is no break clause - or not yet - then you can hold them to the contract and require them to pay rent until the term is up.

You may decide not to do this if there’s a new tenant found quickly.

But you can’t charge them randomly for letting fees.

You need to find out quickly about noisy nuisance neighbours.

I had a tenant leave last year, half way through an 18 month contract. All managed by the agent, who took their fees for finding a new tenant out of their deposit. Tenant still called me screaming about not getting back their deposit, but at the end of the day, them breaking the contract caused me additional fees as I had to find and pay for getting new tenants. I can't advice on any finer points here as the agency manages the deposit, but I got a refund for the half the fees.

To more fully address your actual question- look at the contract, it's likely that it's in your favour and she needs to stay for the year.
However, in your circumstances, I would be saying to her that you are happy to release her from her obligations as soon as you can find a new suitable tenant.
Then you can advertise and work in partnership with her to relet the place.
At least you'd be assured that she'd let prospective tenants see the property and hopefully have it looking as good as possible She would continue to be responsible for the rent until the moving in day of the new tenant.

The standard thing if a tenant wants to leave before their lease expires, is they are responsible for rent and utilities until a new tenant is in situ.

Tenants sign contracts and are…contracted. They can’t just randomly give notice outside if the terms with zero financial implication.

A tenancy which has gone periodic usually requires just 1 months notice from tenant and 2 from Landlord. Within a 6 month tenancy, you normally give notice by Month 4 to stop the contract continuing. Contracts automatically continue as periodic if notice isn’t given by either side.

If you’re with an agent and paying their fees, they should be advising you on all this.

If being a LL isn’t for you….and void periods, hassle with tenants, giving notice etc etc is all part of it, perhaps consider selling up. It’s not for everyone. These costs of voids and tenants moving on and having to pay to re-let are all part of it and you should have known that when starting to let. It’s not easy money and lots of costs are involved and for lots of people it doesn’t make financial sense or they are not suited to it in terms of being emotionally involved in their property, or not appreciating the money they need to spend (essentially the costs of running the business) in order to receive the rental income. Amateur LAndlords, who often like to call themselves ‘accidental’ need to be as aware and capable of covering costs and running the process to meet legal requirements and provide the tenants with what they’ve paid for as professional magnates. There’s no room for amateurish lack of knowledge, or excuses about ‘not being able to afford x,y and z’. If you can’t bear the costs of void periods or a tenant not paying their rent for a while, it’s not the market for you.

Join the NRLA and become more informed about everything.

I’m worried that there are noisy neighbours and that’s part of the reason I want to meet. Next door is also let and I know the landlord so if there are issues then hopefully I can address them.

I’ve let the house for nearly 10 years now. One tenant stayed six years, another tenant two. I knew last year’s tenant would only stay 6 months but I just needed the place let and she fitted the bill. Thus I ensured this AST was 12 months. This is the first time I’ve experience of the tenant wanting to end an AST early. I usually absorb the costs of the property but I guess I’m frustrated because I’m having to do this 6 months before I should be.

It’s a good point regard the break clause. I’ll have to check.. I’m not sure there is. If there isn’t, then I’m at a loss what to do. I can’t force someone to stay and pay.

My advice is stop paying estate agents a penny. Absolute rip off. I recommend using Open Rent and do it yourself, costs peanuts relative to estate agent fees. No one markets your own property better than you.

I will look at Openrent. I’ve not heard of that before. I guess I used an agent as they provide a list of potential tenants and then I did the viewings because I want to vet the potentials.

Thanks MNers, I’ll look into the contract. I guess my hands are tied and I just have to stuck up the additional fees. It’s just bad timing.

Noisy neighbours and not liking the area are not a reason for either. It paying rent or moving out and breaking the contract.

If a tenant faces an issue like this, they need to tell their LL snd the LL needs to address the issue, Rent and the contract continue to stand. Tenants are not able to withhold rent or break the contract becaue of these kinds of things. LLs should expect to respond quickly and take action. If a genuine grievance is found and it cannot be very quickly resolved, some form of rent reduction offer is reasonable.

A tenant should always tell their LL quickly about these issues. LLs are not mind readers. Too often they feel aggrieved about an issue the LL doesn’t know about and it builds in their mind and they feel really annoyed and the first time the LL knows is when they are withholding rent or giving notice…the latter sometimes breaking the terms of their contract, in terms of expecting to move out and not pay rent they are contracted to pay.

It’s important LLs make clear to tenants that they really do want to know about issues as they arise. Being open to hear about small matters and acting in them, encourages tenants to report the bigger serious things. It makes solving most more possible and keeps tenants happy and staying longer.

It’s also important LLs understand the contractual arrangements and make sure the tenants know what they are signing. If they try to break the contract, pointing out their contractual obligations politely and clearly is important. Sometimes tenants have not fully understood what they have signed. They are still contracted within the terms.

I once had a tenant on a 2 year renewed contract. They had been offered a 1 or 2 year contract with the rent held at previous level for whichever term they chose. Within both, there was a break-clause at the half way point. It was all explained and tenant chose the 2 year contract. Then at about the 14 month point, they said they’d like to give 2 months notice to move on. It was pointed out they had a 2 year contract, the break clause period had passed and so they were contracted for another 10 months. If they wished to give notice and leave, they would be responsible for rent and utility payments until a new tenant was in situ. They decided to stay and then gave notice 2 months before the 2 years were up and all was smooth. I was never entirely clear if they had not understood their contract or were just trying to get out of their contract and hoping they’d get away with it. Either way, it worked out fine in the end, but unfortunately some tenants feel aggrieved when they are held to the terms of their co tract and stop paying rent or cause damage. It’s a reason I’d only ever offer a longer contract to someone who had already ‘proved themselves’ over a couple of years.

I can’t force someone to stay and pay.

Do you mean morally, or legally? If the AST is for 12 months and no break clause, then you can force them to pay - they can leave, but you’d still be able to pursue them through court for the outstanding rent.

If you’ve usually had decent tenants over 10 years this is just how it goes sometimes.

It’s a good point regard the break clause. I’ll have to check.. I’m not sure there is. If there isn’t, then I’m at a loss what to do. I can’t force someone to stay and pay.

Whilst not forcing someone to stay in the property and pay, depending on what your contract says, you could ultimately take someone to the small claims court. As a very last resort though, and you wouldn't be able to claim for any period where a new tenant is paying rent.
If she broke the agreement then presumably she would not get a good reference from you, and also you may be able to claim the tenancy deposit from her (you'd need to check this though as I'm unsure).

The next step is to check the tenancy agreement.

Definitely look into open rent. We use that for finding tenants and then do reference and credit checks ourselves and then use the landlords guild for contracts although you can do it all with open rent (I’m not sure why I don’t).

In terms of ‘I can’t force someone to pay’ - no you can’t, but they are legally obliged to pay for the full term if the contract, even if they move out early and you can point that out to them. Sometimes people don’t realise.

And if they then do continue to say they are going early, you can tell them that if they stop paying you will pursue them for the money they owe you. This in itself focuses the mind of some who then either decide to stay, or need to go anyway but accept their financial responsibility.

Good communication is really key within it all.

Yes, follow up on the noisy neighbours. Take it seriously and be seen to be taking it seriously. Document what you or the agent do in response to this. It probably is a thing if they have said it, but to be honest, when it’s part of a giving early notice thing, it could also be just an excuse to try to break the contract, so be aware of that.

Yes, you probably stand to lose money over this. They might go early and even if they pay you the rent until a new tenant moves in, you’ll be faced with the costs of recruiting a new tenant. There is always always a risk iof this. You have to factor it into your costings. If you’ve had a tenant for 6 years you did very well and actually you haven’t faced nearly as many re-letting costs as you might have…., so the fact you’re getting one new, could just be seen as par for the course.

That’s what I mean about being fully aware of the costs involved in Landlordimg. There’s no point being frustrated when you have the costs and inconvenience of finding new tenants. It’s just part of it and tenants going early or not paying rent is all part of it. You have to hope these downsides don’t happen too much, but to never factor in the expense or inconvenience of them happening sometimes is just a bit daft. It’s the same with regard to having to pay for decorating or replacing or carpets etc between lets….it’s all just one of the costs involved and there’s no point feelingnaggrieved and it’s certainly no good saying you can’t afford it or won’t make any money if you pay for those things. They are costs of letting a property and the tenant can expect those things for their rent….and if you can’t pay for it, the numbers don’t stack up for you and you shouldn’t be in the industry. Tenants have a right to expect a decent product and service for their rent.

I think morally and legally - I hear the backlog in the courts is ridiculous but I don’t want to force someone to live somewhere they aren’t happy.

It is the first time I have heard about the noisy neighbours. I’ve asked for further details as this does need addressing or if she’s using it as an excuse for wanting to move.

Lots of useful advice, thank you.

I’m a bit surprised you don’t know the terms of the contract. This is really important. You are more open to be ripped off by tenants if you don’t know the terms, plus you’re also more likely to be a crap LL and not fulfill your obligations.

As I said before, this isn’t something for ‘playing’ with or ‘dabbling’ in. Get informed and do it properly or don’t do it.

You’ve been lucky if so far you have not known the terms of contracts and haven’t had any issues. Some level of hassle or inconvenience and also losses is to be expected somewhere along the line and it sounds like you’ve been extremely lucky if you’ve been very unaware as you sound.

If you’ve paid an agent, they should help you with this. They should be following up the noise reports and pointing out to the tenant if they can or cannot give notice and the financial implications if they go. This is what you’ve paid them for, so make sure they are helping you in this tricky time….as otherwise , what have you paid them for??