Hi, I have a property with a joint tenancy. One of the tenants has moved out, the other wants to bring in a new tenant. Openrent won’t make changes to my rental agreement and say I need to do a new rent now. This is going to cost me for the standard charge plus the reference checks. Can I ask my tenant to cover these costs?
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No.
Also, you will need a new agreement to include the new tenant. It is not the Open Rent won’t change the contract, they can’t by law.
These are tax allowable business costs that form part of the risks that you take in running this kind of business.
Would this cost not come under permitted fees in the Tenant Fee Act? If they are in a fixed term and they want to change something then you can charge reasonable costs of I think up to £50. If they have been good Tenants and are signing up for anoter period though I would probably take it on the chin and just pay it myself, it is a small cost and tax deductable as mentioned above.
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Yes, creating / updating the tenancy agreement is an allowable expense, of up to £50 if you do it yourself.
However, among other things I have not thought about, it seems you need to treat this situation as a new tenancy and charge for the new agreement because you need to:
- check both for their right to rent and reference check the new person
- undertake an electrical installation check, if you have not done so within the last five years
- download the current version of the government’s renting guide for them
- contact the Deposit holder to return the share of the deposit to the one who has left, and to re-type the prescribed information questionnaire, so that the new person replaces the departed person so that the departed can no longer claim their deposit from them
- undertake a check-out inventory exercise, unless the remaining and new tenant are happy to take full responsibility for any damage that may have occurred during the tenancy. If that is the case, I would advise that you quote the original inventory check as the benchmark in the new agreement for both ‘new’ tenants to sign both the contract and the old inventory report.
Sadly, this is not as simple as it seems: the departed tenant still has responsibility if the current contract is not terminated! Explain this to the old and current tenant and what needs to be done to safeguard the old tenant from future liabilities that may occur.
If it had been simply a case of changing the contract, I would not charge for it.
Good luck.
If this can be done more simply without increasing the risk to you, I would love to hear from others on this topic.
I stand corrected, as Going Periodic: What Happens When a Tenancy's Fixed Term Ends? states: As long as they follow the terms set out in the contract, any tenant in a joint tenancy can give notice to leave the property. If the contract says 2 month’s notice is required, then any tenant can give this notice and move out two months later. At this point, the tenancy will have ended for all parties unless the tenancy agreement says otherwise. If the other tenants remain and keep paying the same rent, it won’t simply be business as usual, since the tenancy that previously existed, along with its terms, will have been terminated.
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Sorry, repeating myself