Due to change of circumstances I need to surrender a 12 month contract early, just a few months in. Property fully EA managed at 1600pcm. EA saying they will put these conditions to the LL - early release ‘fee’ of £1230 plus liability for rent and ‘all utilities’ til new tenant ‘secured’ (unclear whether they mean have signed or when their tenancy actually starts). Im in a high demand area for rentals but being realistic it might take at least 6 weeks til a new tenant moves in. I’ve never met the LL and mindful due to commission EA will suggest their own preferred option which wont necessarily match what the LL might be willing to offer. Do these terms sound fair and reasonable based on others’ experiences? I fully accept I have to compensate for actual losses and have no leverage. Ive asked EA to check what the LL thinks rather than just putting forward their initial proposal.
What’s fair is whatever you and LL agree to settle on.
Depends on location but here in south London EA fees seem to typically be anything from 8% to 15% of annual rent to do viewings, find a tenant, do the referencing new contract etc so 1-2 months rent, (tho I have been offered 5% for multiple properties management). So your early release fee sounds like it’s what the EA would charge as a tenant find fee.
LL won’t want the admin hassle (or costs) of starting new utility bills and council tax (and broadband/phone line ?) for a short period then ending these when new tenant arrives. So I’d expect they mean up to the point the new tenant’s tenancy begins.
6 weeks sounds about right as 1-2 weeks to do viewings, find a new tenant do referencing, and most people have to give a months notice from where they are leaving. But can easily take 8.
See what LL thinks first but you could at least counter offer and propose a max of 3 months rent etc on the basis that as it’s an area of high demand it shouldn’t take longer than that if EA are trying/any good. Otherwise they have no reason not to let it drag on and take 5 month.
Also from 1 may fixed tenancies will cease to exist due to the Renters Rights Act and you can then give 2 months notice (this is the max allowed) so the latest you should be at your current place is end June or 5 1/2 months or so (your notice may have to end on a rent payment date)
Good luck
Thanks. Tough scenario financially as I will now be leaving here within the next month and will have to pay two lots of rent til this is sorted. But thats contracts I guess.
@SarahT your sort of situation is exactly why fixed contracts of eg 12month are being abolished under RRA. You are unlucky it’s coming too late to help you much.
You can check your contract and ask your LL if they mind you subletting meanwhile if you can find someone very temporarily who.would be able to n move out at short notice (maybe someone you know already or more like an airbnb thing). After all not in LL interest for you to struggle to pay the rent nor for place to be unoccupied (you may be obliged to tell LL if so, they may have to tell insurance company if unoccupied 30days plus)
Good luck
Do you check your contract, to make sure there is not a break clause that entitles you to end it during the fixed term.
Thanks no there isnt a break clause unfortunately.
Thanks. Difficult to negotiate with LL via the EA who will naturally try to protect their own position regardless of how flexible LL might be prepared to be.
£1230 doesn’t sound like a reasonable release fee and may breach the tenant fees act. I’d ask them to justify it. If I wasn’t satisfied, I’d probably pay it to get released and then complain to Trading Standards and the agent’s redress scheme to try to get some of it back.
You are right that if it’s a fee to cover the admin cost of the legal process for ending the tenancy (drawing up surrender docs and getting these signed by both parties) 1230 would be excessive
If however it’s also to cover LL’s reasonable extra costs because contract broken early ie paying EA to find a new tenant (advert viewings referencing new contract ) then 1230 which is less than a month’s rent, seems much more reasonable.
See ‘Early termination fees’ p71 of
Tenant Fees Act 2019: Guidance for tenants, extract below
Q. Can a landlord or agent charge me if I want to leave a tenancy before the end of my fixed-term or the end of my notice period?
A landlord or agent can require you to make payments in connection with the early termination of the tenancy if you have requested this, but there are restrictions on what can be charged.
Generally, the costs charged for early termination must not exceed the loss incurred by the landlord (usually the loss in rent resulting from your decision to leave and/or the costs of re-advertising or referencing), or the reasonable costs to the agent (such as referencing and marketing costs).
If a landlord or agent agrees to your leaving early, they can ask you to pay rent as required under your tenancy agreement until a suitable replacement tenant is found. This is because you are liable for rent until your fixed-term agreement has ended or
in the case of a statutory periodic tenancy, until the required notice period under your tenancy agreement has expired (if no replacement tenant is found during this time).
However, a landlord is not able to charge more than the rent they would have received before the end of the tenancy.
If a landlord agrees to terminate your tenancy early, you should make sure that this is clearly set out in writing. It is good practice for a landlord or agent to agree to a reasonable request to end the tenancy early. Where this is agreed to, landlords and agents should consider on a case-by-case basis whether it is appropriate to charge an early termination fee, for example, whether there are any exceptional
circumstances which require the tenant to leave early.
However, they could reasonably charge a fee to cover any referencing and advertising costs that they have incurred because of you leaving early, but they should be able to provide evidence to demonstrate these costs.
Please note: a landlord or agent should not require you to pay any charges in this circumstance if you are exercising a break clause in your contract which permits you to leave before the end of your fixed-term (if you have given notice as required by
the terms of your agreemen
Im sure it does cover ending the tenancy and creating a new one, but I would still say £1230 is excessive and I doubt it would be allowed if the tenant challenged it. Timing is critical though as the landlord/agent can just decline to release him from the contract.
@David122 that might be true if LL marketed created tenancy and found tenants him/herself but it’s a fully managed tenancy by EA. Agents often charge a months rent for this sort of service (depending on area). LL just has to show reasonable costs incurred. Unless 1230 is way over the cost of other agents in the area for the same service why would it be unreasonable or excessive?
An agent’s normal costs won’t always be upheld unless either they or the landlord show that this is the real cost of the service.
I have also heard it said by some fairly expert commentators that advertising and tenancy creation costs may be discounted as they would eventually have been incurred anyway and are just brought forward. I’m not sure that’s the case but I think its worth SarahT challenging these costs as she has nothing to lose.
@David122 thanks
I think the argument the costs would have been incurred anyway is clearly false because supposing next tenants stay same time as they would have anyway, over the next 5 years (a reasonable time for a business plan and to assess costs and income) the LL and EA have to do the marketing viewing tenancy creation etc one more time than they otherwise would have, with no extra income
You are right they need to be able to justify what the 1230 covers as per the guidance I quoted (“they could reasonably charge a fee to cover any referencing and advertising costs that they have incurred because of you leaving early, but they should be able to provide evidence to demonstrate these costs.”) but from my experience of what standard tenant find fees are (at least in my area), less than a month’ rent will likely be justifiable..
No harm in asking them tho as you say
Its 8 days since I requested this surrender in writing to the EA. Theyre still saying ‘LL are deciding what to do’. I know LL wasnt expecting this to happen and theres no set timescale for confirming but over a week feels like quite a while to be pondering what terms (if any) they will offer. While Im waiting I cant give notice on services etc, and I have no way of contacting the LL directly as all done through agent. As its an unfurnished let, I’m starting to move out most of my belongings already so that if we can agree terms, theyll be able to start viewings asap. To the LLs on here, would you be taking this long to confirm a decision?
Your moving furniture may be premature as the landlord doesnt have to agree if they dont want to.
Ask the agent/landlord to quantify/substantiate their losses and see what they come back with.
To enforce making good on a loss your counterparty, the landlord or his agent, first have to suffer one. Such counterparties also have a duty to mitigate any loss they might suffer. If the area is generally in high demand, at a reasonable rent, the flat shouldn’t be vacant for more than a couple of weeks. In other words their so called loss will be less than a month’s rent. I expect such an amount is not something you would take exception to.
I know they dont have to agree but trying to be cooperative as an empty house will be better for viewings and I have to move out regardless of whether they agree, even if I’ll have to keep paying.
Its a very high demand area, rentals are so few here that they go very quickly. Only 1 similar sized property being marketed within a mile’s radius at the moment (and I know theres a significant issue with that property as I viewed it months ago before this one). If I were the LL Id like to think that would mean that new tenant could be secured pretty quickly
8 days ago so a Sunday when EA closed. At the very earliest EA will have contacted on the monday.
EA doing their job thoroughly will have accompanied with advice on options for LL, not just on what to agree with you for surrender but also future marketing, what rent to advertise at given latest mkt etc. And advice on what can be claimed from deposit in terms of rent arrears (this needs specialist legal drafting as part of the surrender doc) or for any other reasons. So unlikely they sent on the monday
LL may have multiple other issues eg whether to sell up (many are doing that due to the new legislation) or whether to keep current EA as agents (but may be cancellation fees for agreement with EA)
LL is getting EA to fully manage so unlike most LLs on openrent who are more hands-on.
LL may have little time, be totally hands off, and has no reason to make a speedy decision- at least until you get to a point where you are struggling to pay. Even if was already a periodic tenancy you would be giving a months notice.
You don’t need to give notice to services you just take readings the day you move out.
Be patient. I would thank EA for the update chase in a weeks time and ask if anything needed or would help to speed things along. You really don’t want to be antagonizing a LL already facing the hassle (if not all the costs) of re advertising and finding a new tenant. You may think it’ll be easy to find someone new but every new tenant is a new risk. See it from LL pov.
Good luck
In that case they will be able to re-let quickly. I typically let my flats (£1100 pm, Tonbridge, Kent) well inside a week. No loss by them means no liability for you. When dealing with them insist they substantiate their losses.