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

Beakyoff, you do t have to force them to stay somewhere they don’t want to live. However, by signing a contract they are legally required to pay for the term of the contract.

It cannot ever be the case that any tenant can decide at any point they want to go and leave free of any financial responsibility they contracted to. Can’t you see that? You provide them with the property and security of tenure for the term of the tenancy and stick to the requirements about giving notice, and in return, they are contracted to pay for the tenancy term and to give notice as required and as the law and contract allow.

Neither of you can break these terms without consequences. You cannot decide you want them to leave mid tenancy, because it suits you to have the property back. They cannot decide they don’t want to pay for the full contract. It is up to them whether they vacate, but in terms of payment they are contracted for the whole term unless you release them. You do not need to release them from the contract free of all financial responsibility….how can you run your business if you do this? It is an unreasonable expectation. The most they can hope for is that you let them vacate and agree to release them from the contract when someone else is in situ…but until then they are obliged to meet the financial terms.

I do understand the terms of the contract and I’m fully aware that they are obliged to cover the rent and utilities until AST runs out. I’ve managed the property and tenants for the last 10 years so I do have experience. However, my initial question was whether I could get them to cover the cost of the agents fees which pp have pointed out that I can’t. That is my frustration. That and the fact that on paper a tenant is obliged to pay, but the reality is that the court system is broken so enforcing it is difficult. So yes I do treat it like a business transaction but I also care that the tenant is happy.

I don't know the answer to your predicament but I sympathise. I used to rent out my first house, after moving to our family home. I thought it made sense - the extra income would be handy; I could work part time while DD was small etc. But it was an absolute nightmare. The longest tenancy we had was just over 18 months. Apart from that it was 6 months here, 8 months there... we had 6 different tenants in as many years and each time there were admin costs, repairs and redecorating, paperwork to sort... it ended up being more work than just going back full time. In the end I did just that. Sold the house and never looked back.

I own a flat which was getting hard to rent. I advise spending a night or two there to get a feel for the experience of living there. Maybe the property is getting a bit tired and needs stuff renovating You’ll get an idea re noisy neighbours, stuff like ease of use of the kitchen, any niggling issues etc. Then you can decide what to address. Getting tradesmen takes time and you need a plan. There’s also a case for saying that if you are using estate agents for tenant find only ( not full management) your interests aren’t aligned and they aren’t going to pass the best candidates on. It’s actually in their interests to have a churn of tenants. Consider doing it yourself, or if you can’t, go for full management.

@Beakyok

I do understand the terms of the contract and I’m fully aware that they are obliged to cover the rent and utilities until AST runs out. I’ve managed the property and tenants for the last 10 years so I do have experience. However, my initial question was whether I could get them to cover the cost of the agents fees which pp have pointed out that I can’t. That is my frustration. That and the fact that on paper a tenant is obliged to pay, but the reality is that the court system is broken so enforcing it is difficult. So yes I do treat it like a business transaction but I also care that the tenant is happy.

Yes you can get them to cover the agents fees for breaking the contract early. This is covered within the guidance of the Tenant Fee Act. Search the Act and read it, you'll find you can legally do this, so long as the fees charged do not exceed the amount of rent still owed on their contract. Anyone who says otherwise is not in the know.

I rent out a flat and use OpenRent. I did initially use an agent but realised I could do the whole thing a lot cheaper myself and as I like to bet the tenants and pick ones I get a good vibe from, this was the best idea. Open rent is excellent and costs peanuts.

Vet tenants, not bet them!

@Beakyok

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.

If you look at your average # void months over this 10 year period you're actually doing really well.

I used to advertise a high level property on gumtree and it always rented within one day. All the tenants stayed minimum 12 months and no cost to me.

Does the contract have a six month break clause? A lot of tenancy agreements do now. If it does and your tenant is giving two months notice now they'll be able to move out when their six months are up from moving into the property in October 2021; this is perfectly legal from their end and unfortunately you can't pass any of your costs on to re-let the property to them- the law has changed to stop landlords doing this. However, if there isn't a six month break clause in the contract then legally they are obliged to pay for their full year, it doesn't matter whether the neighbours are noisy or they don't like the area. So you really need to look at the nitty gritty of the contract you both signed. However, I understand you don't want to create bad feeling, if there isn't a six month break clause maybe a good compromise would be to come to a deal (in writing!) that they pay rent until the day before any new tenants move in?

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For me if they wanted to leave I would let them leave - not worth the hassle of them not paying rent due to neighbour issues.

Looks like beakyok has left the building. Let’s hope she’s turned off the lights, switched the water off at the stopcock and taken meter readings.

I wouldn’t want anyone in my tenanted flat for longer than necessary who has expressed intention to end it due to dissatisfaction

I would have a reasonable conversation with the tenants. If there is no six month break clause, sit them down and explain to them that they can't give notice during the fixed period which is 12 months. However, you appreciate they want to move on, and you don't want to force them to stay somewhere they're not happy, so can you reach a compromise?

You could offer for them to stay until you relet the flat which in the current market will probably be quick as there is huge demand for rental properties in most areas of the country. It's worth pointing out to them that if they leave regardless, they could be liable for a CCJ and court costs; they may not realise any of this.

My dd signed a 12 mths contract in her flat. She is leaving after 4 mths but is paying the cost of readvertising the flat and rent until the new tenants move in and also the referencing costs for the new tenants. This was all agreed by landlord due to her breaking her tenancy early but she has very good grounds for this which the landlord has taken into consideration. If he wasn't willing to do that we would have had to have paid the 8 mths owed.

If the tenant has a 12 month AST and there is no break clause, you can charge them for any losses you incur as a result of them breaking the contract ie rent, council tax, utility standing charges, water rates (if no meter) until a new tenant is found and the costs of finding a new tenant.

Please ring Citizens Advice as they will tell you exactly your rights regarding the lease. I would also follow up on the neighbours as this will be on ongoing issue if tenants keep leaving. Hope you get things sorted out as know it must be stressful but good advice from others on here.

@Beakyok

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.

If there isn’t a break clause and it’s a 12 month contract then you can require them to pay. However most contracts do have a 6month break clause. If that’s the case then it doesn’t matter how frustrating you just have to accept it. Read the contract.

Update…
After meeting with tenant, the reletting fees have been paid in full. The neighbour issue has also been addressed (turns out it wasn’t really the main reason).
Lessons learned by me…use Openrent and join the NRLA. I’ll keep the house a while longer and once the children are in school hopefully life will settle down a bit more.
Thanks again MNs.

You can't make them cover any costs that aren't in their contract or legally enforceable. That's just one of the risks you have to accept when you try to make money from property