I have two tenants “A” and “B" in my unfurnished two bedroom flat. Their 6-month AST comes to an end in Jan 2021. They have been good tenants for 18 months.
Meanwhile I would like to sell the flat within the next 6 months. Ideally I would like to find a buyer within 3 months, hoping to attract those who might take advantage of the Stamp Duty Holiday and a reduced market price. Obviously, this will make it hard to find new tenants for this period.
“A” is the lead tenant and has given notice to leave at the end of the contract. “B" wants to stay but pay a reduced rent. She understands that I want to sell the flat, and I am willing to accept less rent on this basis.
QUESTIONS
Is it the case that I need to return both tenants’ deposits and create a new contract for “B”?
How can we make the new contract a rolling one, so that if I find a buyer, I can give her one month’s notice, once a completion date for the flat sale is arranged?
and if that were possible, would “B” pay a new deposit commensurate with the new lower rent?
- or can “B” stay on as already named tenant on a rolling contract without us having to do anything except agree a reduced rent via email?
The notice period is six months now regardless of what your AST says.
To benefit from the Stamp Duty Holiday you need to have completed the sale by 31st March 2021.
return both the deposit and take a new deposit for the remaining tenant. The bigger question is will tenant B REALLY leave when you want her to? especially if on a reduced rent !!
Are these joint tenants or do they each have a room-only tenancy?
Assuming that they are joint tenants and this is a regular fixed term AST, then legally, they are one entity - “The tenant”. They can’t serve notice at all during the fixed term, but if you wish you can accept a surrender or an invalid notice from both of them. At that point the tenancy would end for both. If you wish to then sign a new contract with one of them for a reduced rent, that would be your choice but its not something I would do if you’re trying to sell as you won’t be able to get them out for 12-18 months if they then don’t wish to leave. There is no option for you to accept notice or surrender from only one of them during the fixed term.
Once the tenancy becomes periodic either of them may serve a valid notice to quit and when it expires it will again end the tenancy for both of them.
In your situation, I would inform them of this and let them know that if one gives notice they will both have to leave as you plan to sell. You will not get a serious buyer with a new tenancy in place at the current time in my view.
I wouldn’t do it, there is no incentive for tenant B to get out. In fact she would benefit by hanging on as long as possible. You would be better leaving the place empty.