Which inventory, (mid term or checkout or full) is best to use when 1 tenant is being replaced on a joint tenancy?
Full inventory
Donât forget to get remaining tenants to clean the property before it starts or youâll have no recourse at then end
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if a T gave notice on a joint tenancy then the entire tenancy ends for everyone and you start again from scratch (release deposit, take and protect deposit again, new inventory, serve paperwork, etc )
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Hi. No, the leaving tenant is just being replaced. They did not serve notice to end the tenancy.
Does consensual substitution require release and reprotection of deposit and/or a deed of surrender?
@Jason42 is this an OR created joint tenancy?
@tatemono
Good questions
@Jason42
Check with OpenRent but i think their 'amend tenancy â options are not a deed of variation but actually a whole new tenancy
If it is not the âlead tenantâ moving out then giving a share of deposit back to departing tenant and getting replacement amount from new tenant can be handled between the tenants.
If there is anything to be claimed for following inventory before new tenant moves in, may be easiest to give deposit less claimed amount back and get a new deposit for new tenancy
@Karl11 may have a view on how best to use the OR processes/what is possible
Best
Yes, this is an OR joint tenancy of 3. 1 is leaving and being replaced by 2 new tenants making a joint tenancy of 4. I therefore now understand that the old tenancy of 3 will then end and a completely new tenancy of 4 will start. This I believe lets me propose a new rent rate and Iâll do a checkout, then full inventory for the new tenancy start. Iâm waiting for a callback from the legal team to confirm this. Getting my head around all the new rules & regs is challenging.
when was the last time the rent was raised for the 2 remaining Ts and whatâs the % increase?
This is where it gets complicated. OR insist on a new tenancy contract (they regard change of a tenant as fundamental change to the T&C) and dont offer the option to do a deed of variation to existing contract
However we dont know if the courts will consider it a new tenancy given the services provided and most of the tenants the same. If it is less than a year since last increase and the increase hasnt been done via a s13 then Iâm not sure. @David122 may have a view.
Best
The 2 existing tenants that will stay are still well within the first year of their tenancy start so no previous rent increase. The proposed rent increase is less than 3% and the figure is still lower than similar properties locally.
My own search results -
What youâre doing is legal but might not sit well with the remaining tenants for a couple of reasons. Firstly, as theyâre âwell within the first year of their tenancyâ theyâre probably not expecting a rent increase for quite a while. They may well perceive an increase now as unfair. Secondly, they may assume that youâll use this loophole to increase the rent every time one of them leaves which may undermine any trust you have built.
If theyâve shown themselves to be good tenants already, it may be prudent to delay an increase until 12 months after you move to the new tenancy. In my experience, Iâd say goodwill with tenants and retaining good tenants saves a lot of money.
A change of any tenant creates a whole new tenancy unless done via a deed of assignment, which is not recommended for Assured Periodic Tenancies.
You can increase the rent in the new contract if you wish.
Thanks for the response. I try my best to have a good relationship with my tenants and we normally do. These particular tenants are no different and while I appreciate what youâre saying, on the flip side of this, just 4 months into this tenancy 1 tenant decided to want to move out. With the end of the minimum tenancy terms, this could literally happen every 2 months. What a nightmare that could be. The costs for me to accommodate this tenancy change are high and the extra work load is big also. The 2 remaining tenants rent share will actually go down as there will be 4 tenants sharing instead of 3. Whilst wear and tear on the property will increase again, at my expense. Also, the new tenants would only be 6 months into the tenancy while the existing tenants wouldâve been there for 12 months so I would not be able to increase rent at the existing tenants 12 month point.
My main concern is to make sure I operate within the new rules.
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think 3% higher when you are going to have 4 tenants not 3 in future is entirely fair Iâd actually suggest a little more so long as their individual shares will still be reduced compared with what they pay now. You can actually charge specific costs for ending the tenancy early under the Tenancy Fees Act,
" Fees for tenancy changes
When you ask for a change to the tenancy agreement (for example, to add or remove a person) you can be charged up to ÂŁ50 for the work involved or a higher amount if the work costs more.
If your landlord asks you to pay more than ÂŁ50 to change your tenancy you should ask your landlord for proof of the higher cost. If you think the costs are not reasonable, you can report your landlord to your local council."
Tenant Fees Act 2019: guidance for tenants - GOV.UK
but I would just charge the ÂŁ50 admin cost - as a âRent Nowâ tenancy, there wont be any extra costs charged by Openrent for creating the new tenancy or updating deposit scheme by returning and taking a new deposit. Iâm not sure if the cost of a new inventory due to tenants leaving/joining could be charged for [ @david122 may have a view]
Dont think you can charge more as a ârent increaseâ just because people can now move more frequently/easily, , but when setting up new tenancies itâs reasonable to take account of higher likely frequency of moves as part of setting the rent value I think, just like any other changes to risks or costs [eg if mortgage rates had increased]
Good luck
yes I realise this which was why I suggested doing so 12 months after new tenancy started. I totally appreciate your justification for it and agree. I would probably do the same. I just wanted to make sure youâd considered the implications. Although the remaining Ts will see their rent go down, they will also see the increased wear and tear and decrease in their share of communal areas so in terms of value, they are still likely to consider it a loss.
Really glad to hear that.
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If one of the joint tenants serves a valid notice, the Tenant Fees Act provisions for chargeable fees wont apply as the tenant isnt ending the tenacy early. The RRA allows them to end the tenancy with two months notice at any point and no fee could be charged by the landlord.
If they want to leave earlier than the 2 months that would be different.
- The ÂŁ50 limit is absolute for changing a tenant through novation or assignment.
- Changing a tenant by ending the whole tenancy and creating a new one allows the landlord to charge their full actual costs.
Until now, the courts have tended to assume that landlords should be using option 1 and capped the fee at ÂŁ50 regardless of how it happened. Now that we have only periodic tenancies, it isnt recommended to use option 1 and judges may allow more latitude.
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