Hi, I am a new landlord and have recently found tenants to let out my property to. They have agreed a move in date, paid the deposit and we have both signed the tenancy agreement. Two months down the line they have told me they want to pull out and want to issue a deed of surrender. I’d like to understand what this means for me if I can’t find new tenants in time (I am planning to move out of my property at the end of July as have found a rental to move into). Any advice anyone has on this would be much appreciated.
Hi Louise… it’s a little hard to understand your situation from your post. Can you just clarify that you signed a tenancy agreement two months ago that would see tenants move in at the end of July? IOW, they signed a tenancy agreement 5 months before they were due to move in?
I’d be grateful they decided and told you before moving in - better not to have tenants who don’t want to be there
Are they due to move in at end of july? If so you have plenty of time (3 months) to find a new tenant. If you market at the right price you should find tenants much sooner
In principle they want to break a contract and you could sue them for any losses you incur such as loss of rent (if you didn’t find anyone quickly) or any additional costs finding new tenants but you would have to minimise those by marketing the property asap. However due to RRA if they gave notice now they give max 2 months notice (ending on day before rent payment day) so would never have to pay you rent so that’s not a loss you can claim.
In practice you have plenty of time. You could suggest they give you a month’s rent as compensation for breaking the contract and the costs of finding new tenants, referencing, issuing a new tenancy agreement etc. You could get quotes from agents for the cost but 8% of the annual rent (1 month) is not unusual for that sort of let-only deal where I am. You could possibly claim this from the deposit and they give you notice and the tenancy ends in the normal way (you could agree a shorter notice period with them). If however your costs are lower (you do the viewings yourself and use OR for tenancy creation ) they might reasonably say your compensation should be less (and you might ask for Iess).
It’s possible to end the tenancy by a mutual deed of surrender but it needs to be drafted correctly so that you can still claim costs from the deposit (if that’s the approach you plan to take). Needs legal advice. @David122 can tell you more
Good luck
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If they havent moved in, they don’t yet have a tenancy and you dont need a deed of surrender. You simply have to agree terms to cancel the contract. You may be entitled to some compensation for their failure to perform it. I’d suggest you just accept their decision and move on. 5 months prior is too early to sign a contract in my view. People’s circumstances can change in that period.
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