And how to deal with them
There is a lot of discussion and complaint about the position of tenants who want to stay long-term in their property but are forced to leave. However, there are also problems for tenants who want to leave their tenancy early.
I advised a couple the other day who were in this position (under my tenant advice service). Their story illustrates the problems that people face, and how through ignorance they often make their position worse.
Signing the tenancy
This particular couple knew that they were going to be buying their own house shortly and knew therefore that they would want to leave their tenancy early. They told this to their landlord (who they were dealing with direct – there was no letting agent involved) at the time their tenancy was being renewed.
The landlord agreed vaguely that leaving early might be possible if they were able to find replacement tenants. However, no promises were made.
What the tenants should have done
There are three things they could have done:
1. If they knew for sure, for example, that they were only going to be staying for nine months, they could have asked for a nine-month fixed term. There is no law which says a tenancy has GOT to be either six months or a year. It can be for any time the parties agree on.
2. Or they could have asked for the tenancy agreement to contain a break clause. This is very common in fixed terms over six months. Had they asked the landlords for this it is likely that the landlord would have agreed. But they didn’t.
3. Or they could have asked if the tenancy could just be allowed to run on, as a ‘periodic’ tenancy. This is where, after the end of a fixed term, the tenancy runs on from month to month. There is no need to do anything to make this happen – it will happen automatically under s5 of the Housing Act 1988. This would have given them maximum flexibility, as they would have been able to end the tenancy upon giving a months notice. Had the landlords refused specifically to agree to this, the tenants could have just failed to sign the new tenancy agreement.
Giving landlords notice to leave
As my tenants had not done any of these things, they gave their notice to end their 12 months fixed term tenancy in circumstances where they did not have any legal right to do this.
Now apparently the landlords had been fairly pleasant about it and said they would look around for alternative tenants, but it seems that they did not hurry about this. And from their point of view – why should they? Their tenants were legally liable to pay rent for the rest of the term.
The only legal authority I know for this situation is the 2006 case of Reichman and Another -v- Beveridge which held that the landlord has no duty to mitigate his losses in this situation and is entitled to look to the tenants to pay the rent.
In fact, this is what the landlords here did. They told the tenants that until a replacement was found they would expect them to pay the rent.
By the time they sought my advice my couple had actually handed back the keys and moved out. They told me that they had behaved in what they thought was the proper way and indeed had spent a considerable amount of money getting the property cleaned and so on. They were a bit upset about what they considered to be the landlord’s ‘unreasonable attitude’.
However, as I had to tell them, the landlord was under no legal obligation to end the tenancy early and basically had them over a barrel. As can be seen from this post, simply handing the keys back does not in itself end the tenancy.
What the tenants should have done.
They should have first mentally put themselves in the landlord’s position. Most landlords just want a quiet life with their rent being paid regularly. They are generally willing to be reasonable but not if it means they are going to lose money.
So they are not going to waive rent until the end of the fixed term unless either they have to (i.e. by tenants activating a break clause) or unless they have some incentive to do so.
What I generally advise tenants in this situation to do, is to try to find replacement tenants themselves. Assuming the replacement tenants pass credit referencing, the landlords will normally be happy to re-let to them – as they will not have any voids.
The other suggestion I made was to pay less than the full rent for the end of the fixed term but to pay it all up front.
So if in May a tenancy is due to end in September, the landlord is entitled to get his rent in May, June, July, August and September. So if the tenants offer to pay the rent for May, June and July up front, the landlord may be willing to agree to this. Provided the money is paid, this would create a binding agreement – because the landlord is getting something beneficial he would not otherwise have had.
Although tenants should protect their position by using the words ‘in full and final settlement’ in their letter or email. Then if the landlords accept the up-front payment they will be bound by this.
Many people also write ‘in full and final settlement of all liabilities’ or similar on the cheque that they send. Then, if the landlord cashes it, he is bound by that agreement.
Conclusion
There is often a lot that tenants can do to protect themselves in this situation. However, you need to work with the law rather than just expect the landlords to be nice to you.
These tenant’s biggest mistake, however, was to delay taking legal advice. By the time they came to me, there was very little I could say to help them.
“What I generally advise tenants in this situation to do, is to try to find replacement tenants themselves. Assuming the replacement tenants pass credit referencing, the landlords will normally be happy to re-let to them – as they will not have any voids.”
I think that is old school advice, things have changed in recent years.
Tenant selection is a key skill for landlords with far more to it than just passing credit referencing.
Recently, from a highly selective advert resulting in 50 enquiries for a property, only 10 got a viewing and only 4 of them were suitable.
I would happily carry a 6 month void rather than take on any old Tom, Dick or Harriet.
I think tenants would be best advised to arrange for a break clause in their tenancy agreement if they suspect that they are going to leave early.
However, if this was not done then finding a replacement tenant for the landlord is probably the tenants best option. The landlord can, of course, refuse to accept them if he considers them unsuitable.
An extremely common problem. Not a day goes by where this problem doesn’t rear its particularly ugly head. So we have the ‘legal position’ which in all honesty is rarely very clear to most tenants. They understandably assume that reason and fairness couldn’t possibly mean they would have to pay rent on a property they could no longer live in no matter what (and there are various reasons this situation occurs)
As helpful as the suggestions in this article would be in an ideal world, the fact is that many landlords have their tenants, as you say, over a barrel. I know in landlord circles there is a lot of talk about the law is always ‘favouring tenants’ but this situation is a clear example of how false this claim is.
Tenants are hardly in a position to negotiate their own terms pre-tenancy, landlords/agents mostly say ‘this is the contract we use, non-negotiable, takeit or leave it’ or worse will give the impression that it wouldn’t be a problem, because they want you to sign that contract.
Talk of how difficult it is to evict a tenant (not really in comparative terms) but it’s pretty easy to keep them tied in, isn’t it? Even if the landlord has neglected their repairing responsibilities for example, it doesn’t seem to matter. Even when there are genuine reasons for tenant needing to end a tenancy ‘early’, such as needing to move for employment etc etc. Pretty unfair don’t we think?
Landlords can use grounds to end a tenancy within the fixed term. Why not tenants? with a legal framework that doesn’t afford the same right to a tenant, can we really complain about a legal system that favours tenants? I know not everyone does make this complaint, but it does seem to be a common claim if the landlord media world is anything to go by.
I’m sure there are many landlords who agree with me
If you don’t agree with the terms DON’T sign it. The only TERMS a landlord is able to apply to a court to end a tenancy on during a fixed term, are a significant breach of the terms of that tenancy agreement by the tenant (such as being in at least 2 months rent arrears at the time of both the service of notice AND the time of the court appearance which could be a good 2 months plus later). A landlord must then spend hundreds of pounds going to court to get permission (which might be denied), wait for 28 days plus however long (potentially 2-3 months) it takes for bailiffs to go in and evict a problem tenant. This is not a cheap, or easy option for a landlord and IS weighted strongly in favour of the tenant. I can be fairly certain from your impression of this system you’ve never been on either end of it or you’d know better Jon!
@Jon,
You are conveniently forgetting there is a cost to this.
Why should the majority of tenants who honour there agreements pay for the minority who don’t?
@HBwelcome
Not sure I understand your point.
I hadn’t forgotten about costs, but there are many real and imagined (some might say extorted) costs at various points in the process you would have to be more specific. Especially so I could understand why this is one of those ‘majority paying for the bad egg’ scenarios.
Very good advice Tessa. People need to understand that they are signing a CONTRACT locking them into the terms set out in that agreement. There are things they can do to ensure the terms fit their needs, which if they aren’t experienced tenants they may not realise, so your suggestions should be valuable advice to many.
I don’t really get contracts. No, really. I know, so dim.
What I mean is this: everything should be set out in law. There should be statute and statute trumps contract, no? So just put the relevant law in the contract in the right place, yes?
I often read “check your contract”, but why can’t I just check the law?
Because there are so many different circumstances to consider.
Leasehold properties have conditions applied by the freeholder; they will differ by development.
Not making excessive noise would be appropriate in a flat, but probably not appropriate for a house in the country half a mile from the nearest neighbour.
Requiring floors to be carpeted is appropriate for an upstairs flat but not for a detached house.
Cleaning the outside windows of a ground-floor property is reasonable, but not for a 10th floor property.
And what about property-specific amenities. eg “not to have a barbecue within 10 feet of the summer house”?
It is just impracticable to cover every current and future circumstance in general legislation.
This is in effect what will be happening in Wales when the Renting Homes Act comes into force in full, probably within the year, or by 2050, who knows?
However there is still wide scope for individually “negotiated” clauses, and I fear that landlord forbidding a tenants lock-changing behaviour will not be outlawed , sadly. It’s just the nature of the business, every property has its quirks.
And as for criminal damage? Seems like an academic point from the barrister. Doubt that would get before a magistrate on its own steam. I’m not aware of any civil cases in the higher courts where the discretion of the court hinges upon the issue, (forgive the awful door-related pun) but would be interested to know if any.
It depends. But sure, you can check the law.
All the statute law is here:http://www.legislation.gov.uk/
Most of the recent case law is here:http://www.bailii.org/
Enjoy!
Yeah, thanks, Tessa.
For example, the whole lock changing thing. It is written in law that I can secure my home however I please, isn’t it? So, if I’m basically correct, that clears that one up – locks can be changed by tenants and interference with that should be against the law – nevermind that clause in your contract, and the landlord who has filed the lock is breaking the law.
Life really should be that simple. We shouldn’t do other than what the law says, and if the law doesn’t cover whatever, it should.
But then I’m a tenant who’s only qualification is an internet connection.
I am not aware of any legislation which specifically says that you can secure your home however you please.
The whole question of locks and changing locks for tenancies is an emotive issue. Tenants want to do it, landlords want to prevent it.
We had a long discussion quite a few years ago here https://landlordlawblog.co.uk/2011/03/07/tenants-legal-help-when-the-police-unjustly-support-your-landlord/ where a barrister said it would be criminal damage for a tenant to change the locks.
Although he eventually agreed that this would probably not be the case if the tenant was changing the locks because the landlord was entering illegally.
We live in a complex world and so our law has to be complex too. It’s just not possible to have something written down which covers every situation.
Yes, I’ve read it, and another similar thread here.
As someone said, a LL would have to try to gain entry in order to know if the locks had been changed.
Anyway, cheers.
Hi Tessa,
What is your view on bills in this circumstance? We are on a periodic tenancy with 1 month notice, but there’s the requirement to end the tenancy on the day before the rent Pay Day. So this meant that we were asked to give almost 2 months notice. We will leave several weeks before that date and we understand we have to pay rent until then, but the agency insists we also pay gas, electric, water and council tax until the end. They also insist we don’t contact the utility companies and the council ourselves, but to let them do that.
Your advice is appreciated!
I don’t why you should be expected to pay for utilities after you have moved out. Rent, yes. Council tax maybe, yes. But not utilities.
Also if you pay the bills then you should be the person who contacts the utilities.
However, do check the terms of your tenancy agreement before doing anything and see what it says.
Surely, if you only have to give a mnth’s notice, they shouldn’t be able to make it effectivel 2?!
That’s what we thought, but there’s an additional clause that says “Your notice must end on the last day of your tenancy period”, and since we gave notice a couple of days after the tenancy period date/pay rent day, that adds up to almost 2 months..