I have ended the contract on my property as the tenant gave notice so on the OpenRent page I put the date the tenancy was due to end and it now says:
“ Status: Contract in effect (Ends on 20/06/2021)”
The tenants house purchase is delayed and they now want to stay an extra 2 weeks (possibly longer) and pay the rent into my account every 2 weeks until this is resolved. I’m happy with this as we want to sell so weren’t getting another tenant; but my question is am I covered legally despite the status saying that it ends on 20th June? Will it move onto an automatic rolling tenancy despite me having added the date of 20th for the tenancy ending? Or do I need to create a new tenancy?
Did the tenant give notice in writing? Was it a valid notice? Did you respond in writing accepting the notice before the question of holding over arose?
If the answer is yes then I don’t think you are “covered legally”.
You are hoping that the tenant is “holding over” under the terms of the old AST but paying rent every 2 weeks, and with you having the right to make them leave at the time when you need Vacant Possession, which, like pregnancy, is all or nothing and you probably can’t sell the property without it.
But once you pass the effective date in the tenant’s notice the old tenancy has unequivocally ended and the tenant can’t be holding over under it. If you let them stay after that date I think it’s an open question what the terms of their possession are. It certainly won’t be an AST because it isn’t intended to be for a fixed term of at least 6 months.
I fear that you are getting yourself into a very difficult position here. If I was in your position I would refuse all rent from the tenant after the old tenancy ends and tell them you must commence proceedings to recover possession because you MUST be sure of having VP so that you can sell the property. You probably don’t need to actually commence proceedings, just convince the tenant that this will happen and therefore they can’t stay.
The worst outcome for you is that the tenant’s property purchase falls through, they don’t want to move, and they refuse to sign a new AST. You will get possession eventually, at a cost, but with no certainty about when you can sell the property.
(Hopefully I am wrong about all this! I will be interested to see if there are other points of view)
EDIT: You will probably get possession eventually - don’t count on it. There is nothing worse for a landlord than someone being in possession of a place which is their dwelling, with no documented legal agreement covering that possession.
EDIT 2: Can a tenant and landlord agree to rescission of a notice which was intended to terminate a tenancy? I don’t know, but if so the easiest solution would be for the notice to be rescinded in writing by agreement between the parties and the tenant then to hold over under the terms of the expired AST.
If there was a valid notice then the tenancy will end on expiry and there is nothing either of you can do to stop it. If you give them permission to stay afterwards then they will have an undocumented periodic tenancy. If you trust them completely then this is probably not a problem, but you should be aware that there are lots of things that could theoretically go wrong, including them possibly trying to claim a deposit penalty against you. You would also not be able to get them out for another 6 months if they chose to stay on.
If you have any doubts, ask them to go into a hotel.
I agree with David122 and this shouldn’t be a surprise if you read my post.
It all depends on what has actually happened and can be proved to have happened.
In the circumstances you describe in the original post I would, in your position, insist that they leave the property on the date specified in the notice. I would consider making a gratuitous payment towards part (definitely not all) the costs of a hotel and furniture storage. If you pay part of the costs it might be interpreted as a genuinely gratuitous gesture. If you pay all the costs it might be interpreted as recognition of an obligation. But the very last thing I would do is accept any rent or any other payment for any period after the expiry of the notice (if there was a valid notice) for the reasons I mentioned in my post and David122 has confirmed.
Wow ok more complicated than I initially thought. Thank you. I will sit down properly later and read through your responses and discuss with my husband.
@David122 - Doesn’t it depend on whether there is any risk of the tenant not giving VP on the due date? If there is any risk that they will stay on the OP is in a very difficult position:
They can’t accept any rent
They can’t put the property on the market until they are sure of getting VP
They can’t grant a new AST because they want VP sooner than 6 months
They are on good terms with their tenant and don’t want to sour the atmosphere
They can’t do anything which could be construed as harassment of the tenant (iirc that’s still covered by Housing Act 1988 chapter IV)
In their position, if the tenant says they intend to stay on because they simply have nowhere else to go, I would be willing to offer cash incentives (verbally) to get them out. Such incentives might even be allowable expenses when calculating their CGT liability.
But having said all that, if the effective date when the tenancy ends (specified in the Notice which was given by the tenant) has not passed I would prepare a short agreement that such notice is rescinded by agreement and the tenancy therefore continues as a periodic tenancy on the same terms as the original tenancy but with the tenant able to give 2 week’s notice. I would serve a s21 Notice at the same time. That arrangement might not be watertight but I don’t think the tenant would have the confidence (or be advised) to challenge its validity. Most people would assume such a rescission is effective and I don’t know of any cases which go against that assumption.
That’s always the case Perrygrovefarm. Paying tenants to leave after they’ve served a valid notice is the thin end of the wedge and in my view sets a dangerous precedent. A tenant who holds over after serving a valid notice is a trespasser and can be removed/excluded from the property without a court order, although this would have to be carefully handled. They can also be charged mesne profits at a rate of double the rent jnder the Distress for Rent Act 1737. So there are remedies.
A tenants notice cant be rescinded one served, even if both parties agree. You would therefore be creating a new undocumented tenancy by permitting the tenants to remain. This would be unlikely to benefit from the usual forfeiture, rent or other standard clauses of the original fixed term tenancy as I don’t believe it would be an SPT arising by virtue of s5(3) of the Housing Act 1988.
You’re not telling me that a claim for mesne profits under the Distress for Rent Act is still effective? I last heard of that about 35 years ago and I assumed it was a dead letter. I have never seen such a claim in real life. I did hear someone threaten to make such a claim once, back in the 1990s, but I thought they were just showing off. Would a court entertain a claim for mesne profits nowadays? Can a lay person commence proceedings under the 1737 Act or would a solicitor have to be instructed (assuming you can find one who has heard of it). And assuming you can actually get a hearing date, which at the moment seems a rare thing.
[anyone else reading this, “mesne” is pronounced “mean”]
This is a fascinating conundrum. I do hope we hear from the OP what the outcome is.
And just to confuse everyone, here is another option. Agree a new AST. Keep it simple by making it by reference to the old one save as to term and the frequency of rent payments because these are going to be fortnightly. Prepare a deed of surrender (IIRC surrenders have to be by way of deed) with the date of surrender and the date of the deed left blank, and both parties execute it but retain the copy they have executed. Serve a s21 notice along with the new AST as a safety net. When the tenant is ready to go the deed of surrender is signed, dated, and exchanged (delivered). The new AST ends at the moment of delivery. Surrenders by a tenant are allowed under Housing Act 1988 Part 1 s5(2). If the tenant’s house purchase falls through the new AST will end either by the tenant leaving voluntarily at the end of the AST or by a court order pursuant to s21 (eventually, heaven alone knows when, assuming s21 hasn’t been abolished by then).
Yes, its the only bit of that 1737 Act still in force, but it is legal. However, as you say, in practice getting double rent may be more difficult if the tenant doesn’t pay it. A landlord would also have to be very careful to demand it in arrears, not in advance and to not call it rent, or they could be creating a new tenancy by the back door.