Currently we have two tenants but unfortunately one of the tenants has lost his job and therefore under his Visa conditions has to leave (the country) in six weeks time. He has told me that he has two friends who can take over the tenancy. That would mean there would be three tenants living at the property. Can you advise the best way around this so that I can move these new tenants in ASAP? What do I need to do? Do I carry on with the existing contract after referencing them both? Please advise the best solution as I want to make it easy for the new tenants and safe for me to move them in?
Will I need HMO contract in place ?
Can the tenant leave within a 12 month fixed contract period without a break clause?
If they dont legally have right to rent then you cant rent to them. Simples.
There are plenty of other tenants out there. You dont have any reason to make it easy for 2 people you dont know. Better to have people you have yourself chosen and referenced. Unless you are a big gambler and wouldnt care if you got no rent for a year and had your place trashed so long as it made things âeasyâ.
Itâs your business not a charity. Why would you trust your place to two âfriendsâ of someone who has been unreliable and youâve met neither of them not referenced them and have no idea if they can pay. If you want things âeasyâ use a lettings agency or better dont try to be a landlord and sell up.
Get both tenants to sign a deed of surrender and end the tenancy and deal with the deposit. To end at the end of the 12 month period or 2 months from 1 May, whichever is earlier (under new legislation they can give 2 months notice on 1 may anyway). Till then they are liable.
You could offer to end earlier and they pay the rent and utilities and council tax for any void period/till new tenants move in, and the costs of remarketing.
Youll need proper legal help to draw up the documents
Start again with advertising/marketing. If one of the tenants wishes to apply with the two friends you can assess them check their affordability references etc just like any other applicants. For a new tenancy you serve the epc, âhow to letâ etc all over again. For three people there is more wear and tear so you should be charging more. And thereâs more risk one wont pay. Why would you do that if its the right size and rent for 2 people?
Dont just change the current tenancy removing 1 tenant and adding the two âfriendsâ. Very messy including what happens to the deposit. And yes sounds like youd need an hmo licence.
Thanks David for your response but I should clarify my position more clearly. My tenants are currently approximately five months into a 12âmonth fixedâterm contract which does not contain a break clause. Both tenants are from overseas and are in the UK on work visas. Unfortunately, one tenantâs employment has recently ended unexpectedly. If he is unable to secure another sponsor promptly, he will need to return to his home country, the Philippines.
He is fully aware of his contractual obligations; however, he has informed me that he knows of a friend or colleague who could potentially replace him on the tenancy agreement.
The proposed process would be as follows:
Inspect the property and, if all is satisfactory, repay the departing tenantâs deposit.
Carry out referencing checks on the prospective replacement tenant.
Arrange a suitable moveâin date, ideally with the replacement tenantâs contract commencing the day after the surrender date
Does this seem a safe and reasonable process to you?
@Paul32 well whether itâs safe and reasonable depends on your risk appetite-
if it is just one person replacing existing tenant maybe ok. If two then iâd query whether the space suits (are they partners/is it a doubke bed) and why youd be charging the same for 2 people that one paid before
you also have the extra cost of an hmo licence if its 3 people (and extra demands that entails)
you will need to get all parties to sign a deed of variation changing the contract itâs not just down to you and departing/arriving tenant
not safe without id and right to rent and referencing checks for new tenant and all the other checks you would do for any new tenant (6 months statements employer etc)- it would also be reasonable to ask length of visa of new tenant if applicable, where they are living at mo/how come they can move at short notice/their future plans etc, current LL details.
they will need to sort out bills and council tax up to point of departure too
you will need to return deposit and take/protect new one for all tena n ts (the schemes badically protect 1 deposit per tenancy ) and not sure you can actually return deposit without ending the tenancy and starting a new one
you will need to re-serve the how to let, epc etc
Legally it will be much simpler and less risky to end old tenancy with mutual surrender by all and start a n ew one (again re-serving epc, how to let etc to all tenants)
No, itâs just a forum. As such, youâll find a range of opinions amongst the advice that people choose to offer you by generously giving their own time to respond to you.
If youâre a ânew landlordâ then you (and your tenants) would be best off you joining a landlord association and doing their training. Itâs tax deductable.
Landlord associations have dedicated âsupportâ staff a phone call away.
Registering a property as a HMO, is not just a registration form and fee. It may also require upgrades such as fire alarm system, fire doors, locks and other items.
If you have two tenants on the contract and one tenant gives notice and you exept then if itâs a joint deposit get them to start the process for deposit return, that would initiate the end of the contract.
Inform remaining tenant their contract will end at same time and start with a new contract with a single family unit or two people sharing.