Tenants under joint contract splitting up - contract & insurance still valid?

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    Tenants under joint contract splitting up - contract & insurance still valid?

    Our tenants have been in our 3 bed flat for 1.5 years, and are now on a rolling contract. They are an unmarried couple with the contract in joint names, with references and with a guarantor. We have Rent Guarantee Insurance valid until 01/02/2020.

    Unfortunately they are splitting up. Neither has given formal notice, but he texted asking to be removed from the contract. We refused, telling him that this would invalidate our contract and insurance.
    She has now contacted us by email saying that he has left and that she has quit work and that her main income will be universal credit only, but she is also applying for housing benefit too and putting herself down for council housing. She finished by saying "Just wondering if you were happy for me to keep living here?"

    So we are concerned as to where this leaves us? Rent payments are up to date.
    But is our contract still valid? and is our Legal Insurance still valid?

    Is she guaranteed Universal Credit? (she has 3 children under 5 also living in the property). ..and will she get it in full? Paid direct to us?

    Any advice on this situation would be much appreciated! Many thanks

    #2
    Legally same position as before. Yes. Don't see a reason why it wouldn't be if it were before. Eligible yes, how much depends on specific personal circumstance and that month's qualifying income. Unlikely, no.

    that her main income will be universal credit only, but she is also applying for housing benefit too
    If someone's on UC, they can't get HB seperately. They just need to update their personal circumstance as required, and the UC housing element will be calculated accordingly.

    Any advice on this situation would be much appreciated!
    They're both still tenant, and jointly liable for rent until tenancy is ended. One of them can serve notice to end the tenancy for everyone without the other's agreement.
    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

    I do not answer questions through private messages which should be posted publicly on the forum.

    Comment


      #3
      Thanks KTC,

      OK, so if I have understood you correctly, then legally it doesn't make any difference that they have informed us of changed circumstances? All that matters is the contract? ..and the key thing is that they have not given Notice, so again nothing has changed?

      But are we likely to be under any obligation to inform the insurance company?

      So Universal Credit is a red herring. The contract is with the tenants and it doesn't matter how they pay or how they get the money?

      So we can say to the tenant its fine and nothing has changed, they are still under the same contract and obligations as before?

      Comment


        #4
        Who contributed most to the rent, Him or Her?
        He wants his name taken off the AST and may be reluctant to contribute to rent, though he has a duty to provide accommodation for his children until they are aged 16.
        If fixed term has exired explain to him the cheapest way he can remove his name is to provide due NTQ, which will end T for all.
        She is unlikely to be offered a Council house in the next x years, at which point the Council can expect the Applicant to occupy almost immediaty, to the detriment of current LL.
        Copy G's it to all correspondece,they can be your best ally.







        Comment


          #5
          Originally posted by RogerC View Post
          But are we likely to be under any obligation to inform the insurance company?
          I don't see why you would be, but the only way you can be sure is check the terms of the insurance you've got.

          Originally posted by RogerC View Post
          So we can say to the tenant its fine and nothing has changed, they are still under the same contract and obligations as before?
          Just thank her for the information, along with a gentle reminder that her obligations haven't changed.

          Originally posted by mariner View Post
          though he has a duty to provide accommodation for his children until they are aged 16.
          Even if we assume he is the father, the obligation is surely paying child support, not that he actually have to provide accommodation if he doesn't have custody.
          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

          I do not answer questions through private messages which should be posted publicly on the forum.

          Comment


            #6
            Originally posted by mariner View Post
            Who contributed most to the rent, Him or Her?
            ..............................................
            Copy G's it to all correspondece,they can be your best ally.
            Mariner, Thanks for all the advice.

            To answer your question - They both have fairly low paid jobs in a supermarket. I suspect they both paid roughly equally. The original referencing showed they could only afford the rent in partnership.
            The Agent ('Let only' service) also insisted he had to to get a guarantor because he has a previous CCJ.
            However, they have always paid rent on time for 1.5 years of tenancy so far.

            Also, excuse my ignorance, but what do you mean by 'G's'?

            Comment


              #7
              Thanks KTC.
              Useful to have confirmation of what we already suspected.

              Comment


                #8
                Originally posted by RogerC View Post
                Also, excuse my ignorance, but what do you mean by 'G's'?
                The guarantor.
                I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                I do not answer questions through private messages which should be posted publicly on the forum.

                Comment


                  #9
                  Originally posted by KTC View Post

                  The guarantor.
                  Thanks

                  Is there a risk in informing the guarantor at this stage? i.e Could the guarantor panic that they are about to get stung?

                  I am not sure what scope the G has, if any, to remove themselves from their own obligations in a rolling contact at this stage? Presumably none ? i.e. Are they obligated to guarantee rent as long as the tenancy continues?


                  Comment


                    #10
                    Keeping a guarantor informed about their (potential) liability should help not hinder you. I don't know if there's issue around data protection though depending what you are telling them.
                    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                    I do not answer questions through private messages which should be posted publicly on the forum.

                    Comment


                      #11
                      I have to say I am instinctively nervous about involving the guarantor at this stage.

                      There is the possible legal data protection issue as you say, as well as risk of antagonising both tenants unduly by appearing to spread updates of their personal circumstances to their friends/family without their permission.

                      If the guarantor remains obligated regardless of whether they know the latest circumstances, I can't see what the advantage of informing the G would be?

                      But we are fairly inexperienced at all this, so it is possible I have not understood all the ramifications and/or are missing the point? Especially as it seems that two people who know much more than us - KTC and mariner, are both recommending this course of action.

                      Comment


                        #12
                        There's a good chance this isn't going to end well.

                        I presume the landlord doesn't want to give the remaining tenant a new sole tenancy.

                        The remaining tenant won't be able to get maximum benefits with a joint tenancy agreement without jumping through some considerable hoops.

                        The tenant who has left would be advised to serve notice, which will end the tenancy.
                        The tenancy ending should end the payment of the housing benefit element of the Universal Credit (unless the tenant commits benefit fraud and doesn't tell the UC people).
                        The remaining tenant won't want to leave because that will make them homeless (and the council won't understand the situation very easily and will probably advise them to stay put as long as they can).

                        I think it might be best to reply to the tenant that, while you don't have any specific objection to them staying there as long as the rent is paid, that doesn't seem likely to continue.

                        The guarantor is only useful until the joint tenancy is ended (if that - guarantor agreements are next to useless if the guarantor doesn't play ball).

                        I'd become very familiar with the conditions of the rent insurance - because I suspect that the end of the tenancy will end the insurers liability also.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          The council should have an obligation to house given the children if they become homeless. The other tenant giving notice should not constutite the mother becoming intentionally homeless. I can see the council advising to stay, but they really shouldn't, because unlike possession by a landlord under s21, the tenancy would have ended by the other tenant's notice to quit whereas s21 landlord's possession tenancy don't end until eviction.

                          Originally posted by jpkeates View Post
                          The guarantor is only useful until the joint tenancy is ended (if that - guarantor agreements are next to useless if the guarantor doesn't play ball).
                          If the guarantee is well drafted (yeah I know the chances of that!), then the guarantor should be liable for the mesne profits if a tenant hold over.
                          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                          I do not answer questions through private messages which should be posted publicly on the forum.

                          Comment


                            #14
                            Thanks jpkeates, some interesting connotations to consider

                            Originally posted by jpkeates View Post
                            I presume the landlord doesn't want to give the remaining tenant a new sole tenancy.
                            Out of curiosity, is this what you would do if you were LL?
                            Personally, I can't see any advantage for the LL in this? I doubt she could demonstrate she could afford rent and we would surrender the guarantor and the Legal protection insurance.
                            Also, in this scenario, the male tenant is relieved of his obligation both to his children and to the LL, which doesn't seem helpful to anyone but him.

                            Originally posted by jpkeates View Post
                            I think it might be best to reply to the tenant that, while you don't have any specific objection to them staying there as long as the rent is paid, that doesn't seem likely to continue.
                            I am not sure where this would leave us? or what would be the outcome of this conversation? Are you suggesting that we serve notice?
                            But as you said the Council will advise her to stay put for as long as poss, so it seems like we would be shooting ourselves in the foot by serving her notice?

                            All in all, it is starting to look like a Catch 22 scenario!

                            Thanks again for your advice and comments.

                            Comment


                              #15
                              Originally posted by KTC View Post
                              I can see the council advising to stay, but they really shouldn't, because unlike possession by a landlord under s21, the tenancy would have ended by the other tenant's notice to quit whereas s21 landlord's possession tenancy don't end until eviction.
                              I agree, my point was more that getting the council to understand that isn't likely to be easy.

                              Originally posted by RogerC View Post
                              Out of curiosity, is this what you would do if you were LL?
                              I think it's important that the tenant understands that while I'm generally sympathetic to their situation, so I'm trying not to make things worse, but I can't let them make my life worse in exchange.

                              I would be more than happy, for example, to meet with them and the housing department to try and move things forward, what I can't do is live without the rent coming in.

                              If the leaving tenant serves notice, the remaining tenant is going to have to leave, because your insurance won't allow a tenant with no job (while that may not be true, she won't pass referencing for rent insurance!)

                              If she doesn't leave after he serves notice or the rent doesn't come in, you'll have to serve notice (again, your insurance will almost certainly require that).
                              That would leave her at risk of being seen to have deliberately made herself homeless, which has all sort of knock in effects.

                              This is a business (and I presume you can't afford for it to be a charity).

                              It takes quite a while for universal credit to start and she's not in a great position, and getting into debt won't help her.

                              Are you suggesting that we serve notice?
                              But as you said the Council will advise her to stay put for as long as poss, so it seems like we would be shooting ourselves in the foot by serving her notice?

                              All in all, it is starting to look like a Catch 22 scenario!
                              I'd see what the outcome of the conversation is - you can't be worse off than you are now, when you don't know what is happening.

                              The leaving tenant may commit to pay the rent or the guarantor (or a relative) may do the same - I had a tenant in a similar situation (partner left 2 weeks after the birth of their first child) and the remaining tenant's family continued with the rent for several months while the situation sorted itself out.

                              But if the outcome is less positive, you may need to serve notice. You may elect to do it now or soon to start the clock ticking (and you may want to warn the tenant so they're not surprised if that's the case).

                              But, at some point, either the situation will become stable and acceptable or it won't. In which case you will have to either serve notice or sponsor the tenant,
                              And my feeling is that the chances are massively in favour of the latter.

                              You also need to check the terms of your rent guarantee assistance to see if there are things you need to act on in there.
                              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                              Comment

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