When you have more than one tenant in your property – whether that’s a couple, two or more friends, or an HMO house share – there’s always the possibility that one of them might leave. A couple may split up, friends might fall out or their financial or other personal circumstances could change during the tenancy, meaning the property is simply no longer suitable or affordable.
While some tenants will (and should) keep landlords and their agent informed, with the stresses that life throws at people, this doesn’t always happen, so it’s important to have excellent tenant referencing at the start of a tenancy and period checks on both the property and your tenants, so any problems are picked up early. If we are managing your property for you, we will do all we can to pick up on any potential issues between tenants.
But whenever it comes to yours, or our attention that a tenant is leaving or has already left, there are a number of steps that are required.
On a joint tenancy agreement, it’s common for the tenants to be ‘jointly and severally’ liable for the rent. That means if one or more of them can’t pay their rent or they leave the property, the remaining tenants are liable and have to cover that rent as well as their own share. So, legally, you are entitled to continue receiving the full rent, regardless of how many of the original tenants remain.
The remaining tenant(s) may not want or need to replace the person that’s left, in which case you – or your agent - should make sure they can afford the rent on their own. It’s advisable to ask them whether their financial circumstances have changed since they were originally referenced and then judge whether they’re likely to be able to make the increased monthly payment.
Reference any new tenant
If the remaining tenant has found someone new to share with, they must be referenced – importantly, a right to rent check must be carried out on all tenants in England to ensure they have the legal right to live in the UK. If we are managing the property for you, we will carry out this step for you.
Amend the tenancy agreement
Every occupier of the property should be on the tenancy agreement, but it is possible to amend or draw up an addendum to the original contract – you don’t need to issue a completely new one. It’s advisable to have either a letting agent or legal specialist do this for you, to make sure nothing is overlooked.
Deposits for joint tenancies
Usually, if there is a single AST, there is one deposit taken – even though more than one person may have contributed to it – and it’s protected under the lead tenant’s name. If it’s the lead tenant that’s leaving, then as your managing agent, we would organise to repay the deposit to them and take a new deposit from the remaining tenant(s).
Can the tenant be charged for making these changes?
Since the tenant fee ban came into effect, it is not permitted to charge fees for setting up a tenancy, referencing or credit checks. However, if the tenant themselves is requesting that the tenancy is changed – i.e. if they want to move someone new into the property – it is possible to make a charge of up to £50, or higher if the costs incurred are reasonable.
If the property is fully managed, your agent will take care of all of this on your behalf and at Leaders we’re used to dealing with tenant changeovers. But if you have any questions or are currently self-managing and would like to discuss our services for landlords, just contact your local branch and speak to one of the team.
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