Tenants split up, do I need to redo contract?

Hi all,

Thanks in advance for any helpful replies.

Just when I was due to send out an increase in rent letter to my tenant one of them messaged me to say they had split up and she was moving out sadly. They are long term tenants 12+ years and never given me any problems, I’ve rarely increased the rent, last time was 18 months ago, prior to that was 7 years before.

Now I can’t keep putting it off and need to increase, it will still be a drop in the ocean compared to my interest rate increase, but I’m trying to be reasonable and still keep it just below comparable properties.

My question is ideally I don’t want to do a new name change contract and would rather just send him a rent increase letter (either addressed to just him or jointly still if necessary), can I do that, or do I need to go through the faff and complication of doing a new contract just in his name, changing the deposit over and increasing the rent that way?

If I just write and increase it with a new contract and he increases his payment accordingly is there a problem?

*Edit btw existing 6 month AST contract was probably signed about a decade ago so is now month to month rolling effectively

Thanks again.

Section 13 form to do it properly and once served and agreed it can apply from the month after served. Or, if you have a very good relationship, you can just mutually agree the new rent and then document it by email with a reply agreeing to it. In any case, once the tenant starts paying at the new level of rent, it is deemed as accepted and the rent going forward.

As you may well realise, her moving out doesn’t change the fact that she is still a tenant and liable for the rent. I would agree with @Nilesh that in this instance you need to serve a s13 notice straight away. I have been giving 5-6% increases recently, but if you need to give more, then do so. I would have a conversation with the remaining occupant first to see whether he wants to leave. If he does, then get him to serve notice on you, which must be a valid notice to end the tenancy for both of them. If you encounter problems, come back for more help.

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I would have a discussion with the remaining tenant around their affordability. If they could comfortably afford the rent on their own you can issue a new tenancy agreement with the planned increase in the tenants sole name. If not, issue a section 21 which won’t be easy to do to a good long standing tenant.

I agree with the advice but would add these comments, starting with a very definite answer to one of your questions: Yes you do need to go through the faff and complication because you’ll possibly kick yourself from here to Christmas if you don’t.

  1. I would contact the departed tenant (I would absolutely insist on being given their address) and check that they definitely do not want to continue with the tenancy. At the moment they have a right to return.
  2. Assuming they do want to leave and you don’t want to insist on them honouring their obligations until the tenancy expires then I would complete a surrender of the existing tenancy by both parties and a grant of a new tenancy to the remaining tenant. A surrender is a very simple document but it is a deed so should be made as such.
  3. Be careful to deal with the deposit correctly. You do not want to be piggy in the middle in a dispute about who the deposit belongs to.
  4. I would treat this as an application for a new tenancy by the remaining tenant and carry out exactly the same checks including affordability as if you had never met them before.

A lot of work. Just part of being a landlord.

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Problem being that if the remaining tenant is quite happy to stay and is adamant they can afford the rent you will shoot yourself in the foot if the affordability check comes back as negative, then what.?

Then what? Accept a tenant who fails an affordability check? Good luck with that. I’m sure you know the risks as well as I do and risk management is a fundamental part of this business.

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