OpenRent Community

Tenancy ending early, referencing cost on replacement tenant?

I have an tenant that needs to to end her tenancy early. She has lined someone up to replace her. It look likes on OpenRent I have to create a new tenancy etc which will incur cost of £50 for Rent Now etc. As the tenancy is ending before the minimum term and break clause can I pass the cost onto the leaving tenant, or do I just suck it up?

Hi Sheila, Yes if you want to create a new tenancy, then you would have to use Rent Now again, which costs £49. You can skip the referencing stage for some tenants and the new tenancy can be up and running in a day or two, depending on the dates specified in the AST.

If the tenancy began after 1st June, then no. This is now illegal under the terms of the Tenant Fees Act.

If the tenancy began before 1st June, then maybe. You could tell the tenant that you won’t break the tenancy unless they pay. This is risky, as the old tenant may leave anyway and just stop paying rent. Is it worth it to cover £49?

Alternatively, if your AST includes a term describing an early termination charge, then you can simply activate that clause and charge the tenants the fee for ending the tenancy early.

Hope that helps. I would personally recommend not charging the outgoing tenant. If you are worried about the cost, you could raise the rent by a few pounds for the new AST so that the £49 is covered over the course of the fixed term.

A final option would be to keep the tenancy going to add the new tenant by deed of assignment. This is something we’re hoping to write a guide on soon.

Sam

I think Sam has offered good advice. Life happens regardless of whether people are in fixed periods or not. There is no point telling someone they can’t move when their circumstances tell them they have to. I think it is better to view the situation from the perspective of the tenant and help them achieve what they need to, just with an earlier transition than you were expecting. People are buying flexibility when they rent - that is always overlooked in rants in the press about landlords- and landlords are in the business of managing transitions when tenants come and go. I’d focus on minimizing the vacant period by doing stuff like planning work that needs doing on your property and advertising in advance so you have a batch of prospective tenants to show round as soon as you get the keys back. People will thank you for being flexible and might even recommend you in future.

Hope that helps