Change of tenant in joint AST

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Change of tenant in joint AST

    Hi there,

    I'll try to explain this as concisely possible. Have answered the FAQ with more details and dates at the bottom.

    I am currently 1 of 3 tenants on a joint AST agreement. I am wishing to move out of the flat, and have found a suitable tenant to take my place, and contacted the letting agent to move this forward. The agent is asking for a £300 fee to “surrender the tenancy agreement” and start a draw up a new agreement.

    Here are my questions:

    i) If we signed an Addendum to an existing AST agreement in November 1, 2019 (after the Tenancy Fees Act 2019 came into effect) but the original agreement was made in February 1, 2019 (before the Act came into place), does the Act apply to us? And therefore, are we exempt from all the fees specified in the Act?

    ii) Is it really necessary to surrender the tenancy and draw up a new agreement, or is it possible to modify the existing agreement? For context I have lived in the flat 4 .5 years and seen 4 previous tenants leave, without this requirement.

    iii) Is the £300 fee being asked i) unreasonable (subjective) and ii) legal? I have looked at the guidance to the Tenancy Fees Act 2019 for agents (see link below) and on pages 54-55 it states that changes to a tenancy, such as a change of sharer, is a reasonable request that should be accommodated. The landlord are agent are allowed to claim £50 to cover this, and fees above this are likely to be unreasonable and could be a prohibited fee. For context, in previous years before the new Act came in new tenants have paid between £150 – 200 for referencing etc, but I think these excessive fees are now banned? A reference check is usually around £30 and the new tenants name needs to be added and mine removed, so can’t see how the £300 fee is justifiable. There is going to be no loss in rent, or marketing costs as I have already found a suitable tenant and will not stop paying rent until they are approved and take residence.

    iv) Assuming that the answer to ii) above is Yes, and the tenancy must be ended and a new agreement drawn up, how much can the agent/landlord charge for this? Again, the guidance for the Act (see link, pages 56-57) states that termination fees can only include out of pocket expense such as lost rent, advertising or referencing charges. As I have found a new tenant to take over, only the last cost is applicable and we are very happy to pay it, but it shouldn’t be more than £50 surely?
    Here are relevant special clauses from the agreement:

    "If the Tenant requests to surrender the tenancy prior to the end of the fixed term, and the Landlord
    agrees to the surrender, then the Tenant will be responsible for rent until the end of this agreement or
    when the Landlord or a new Tenant takes possession of the said Premises and for reimbursing the
    Landlord the letting fee of 7.5% plus VAT due to the Landlords Agent for the remaining fixed term of the
    tenancy.

    Due to changes in legislation with effect 01 June 2019, the Tenant deposit has been capped at 5 weeks.
    It has been agreed that the Tenant will receive a refund of any excess deposit paid. We will arrange a
    refund to the Tenant."

    Am I right on any of this? I admit I might be wrong on my understanding of the Tenancy Fees Act 2019, but if I am, can you explain why?

    Thank you for reading. Any help appreciated!

    -----------------------------------------------------------------------------------------------------------------------------------------
    Q1 – Where is the rented property located (England / Wales / Scotland / N Ireland)?

    England

    Q2 – What type of Tenancy Agreement (TA) is this e.g. sole tenant / multiple tenant / room only?

    Mutiple Tennant, Assured Shorthold Tenancy Agreement

    Q3 – What date did current TA start dd/mm/yy?

    Most recent Addendum: 01/11/19
    Original Agreement: 01/02/19

    Q4 – How long was initial fixed term (6/12/24 months / other)?

    9 months

    Q5 – Does the TA state that rent is due weekly? / 4-weekly? / per calendar month (if so, on what same date each month)?

    Monthly

    Q6 – Did the TA require a tenant damage deposit to be paid? If so, on what date was this paid (dd/mm/yy)?

    Yes. I paid the deposit when I moved in on 01/08/2015

    Q7 – If your query relates to a notice for repossession from the landlord (a Section 8 or Section 21 notice) or a tenants's notice to quit to the landlord, please provide the exact date the notice was sent/received (dd/mm/yy).

    N/A

    Q8 – Does the landlord live in the same property as the tenant?

    No

    #2
    I think that you are right about the fees.

    However, the (practical) reality is that the agent (/landlord) doesn't have to agree to the change and can simply sit there until the agreement becomes periodic, when your notice will end the tenancy for everyone.

    So I'd probably suggest that you pay it, leave and then try and recover the element of the fee that is excessive if you can.
    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


      #3
      What does the tenancy agreement say about assigning the tenancy?

      Comment


        #4
        Thanks for the reply jpkeates. I am leaning towards exact what you suggest: just paying the fee and trying to recover it later too.

        Lawcruncher (nice handle!): Coincidently, somone on another forum was suggesting assignment. Never heard about it before but going to ask the agent about it as the agreement doesn't seem to outlaw it, just requires permision from the landlord

        "The Tenant(s) agree(s) to the following:
        2.20 Not to assign the tenancy of the Premises or any part of it without the Landlord’s prior consent, which will not be
        unreasonably withheld. (In order to avoid misunderstandings or disputes later, it is strongly recommended that
        the Tenant obtain confirmation in writing of any such consent granted.) The Tenant will be liable for the
        reasonable fees and expenses incurred by the Landlord in arranging any assignment granted."

        Comment


          #5
          The agent/landord must have previously carried out some kind of assignment, if tenants have moved out and in previously without a new tenancy agreement having been created.

          Assigning joint tenancies is quite complex, and I'd, personally, always suggest the approach that the agent is taking.
          Although I suspect that they are taking it for different reasons (££££).
          An agent can charge £50 or their actual costs if higher for such an assignment - and it's hard to justify the costs ever being more than £50 - and, even if they are, there's no fun in just covering your costs!

          The agent / landlord is operating under a misapprehension, I think, that they can charge more for allowing the tenancy to end early, because there is a mistaken belief that, in such circumstances that they can charge more.
          They can't.

          They aren't allowed to charge anything to create a new tenancy agreement.
          They are allowed to charge to bring an existing tenancy agreement to an early end - which used to be unlimited, but was realistically capped at any rent due between the early termination and the end of the fixed term.
          However, the amount a landlord/agent can now charge is capped at " the loss suffered by the landlord as a result of the termination of the tenancy" which is usually considerably less if they relet - and in this specific case is probably zero.

          The issue for tenants is that these restrictions make it significantly less appealing for landlords/agents to agree to end agreements early or allow tenants to swap.
          They used to be opportunities to make some money at a point when a tenant was probably prepared to pay something to get what they wanted.
          Now the law, in trying to protect the tenant, has the reverse effect.
          The landlord/agent is incentivised not to agree to what the tenant wants to do (and often has to do, because people rarely move for fun).
          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


            #6
            An assignment where one tenant leaves and another takes his place is not that complex. I set out below a deed which covers a straightforward case where there the landlord's consent is required and there is a deposit.

            It is not quite the case that the agent can just sit back. If you produce satisfactory references consent cannot be withheld. Paying the fee and then trying to recover it is not recommended. You just need to stand up to the agent.

            *

            A Deed dated [leave space to write in date] 2019

            1. Parties

            1.1 The Continuing Tenants: [insert names of the tenants who took the tenancy other than the tenant who is leaving] of [insert address]

            1.2 The Departing Tenant: [insert neam of tenant who is leaving] of [insert address]

            1.3 The NewTenant: [insert name] of [insert address]

            1.4 The Landlord: [insert name] of [insert address]

            2. Definitions

            In this deed:

            2.1 “the Property” means [briefly describe property]

            2.2 “the Agreement” means an agreement dated [insert date] made between the Landlord and the Continuing Tenants and the Departing Tenant

            2.3 “the Tenancy” means the current tenancy of the Property arising under the Agreement or howsoever otherwise arising

            2.4 “the Deposit” means the deposit paid in relation to the Tenancy and which is held by the Deposit Holder and protected under the Scheme

            2.5 “the Scheme” means the scheme under which the Deposit is protected as required by the Housing Act 2004

            2.6 “the Deposit Holder” means the person holding the Deposit

            3. Assignment

            The Continuing Tenants and the Departing Tenant assign to the Continuing Tenant and the New Tenant the Tenancy for the remainder of its term

            4. Deposit

            4.1 The Departing Tenant acknowledges that he has received from the New Tenant the sum of £[insert amount] being the amount he contributed to the Deposit and assigns to the New Tenant all his interest in the Deposit

            4.2 The parties shall do all things necessary to ensure that the Deposit continues to be protected and that when it is due to be repaid the persons entitled to it (subject to any claim on it by the Landlord) are the Continuing Tenants and the New Tenant including without limitation (a) complying with the requirements of the Scheme on a change of tenant including (if required) reregistering the Deposit (b) giving notice to the Deposit Holder of the assignment made by clause 4.1

            4.3 The New Tenant acknowledges that he is jointly and severally liable with the Continuing Tenants for any breach of the obligations on the part of the tenant contained in the Agreement and otherwise relating to the Tenancy and accordingly cannot dispute any deductions from the Deposit on the grounds that the breach of obligation occurred before the date of this deed

            5. Landlord's Consent

            The Landlord consents to the assignments made by clauses 3 and 4

            6. Tenants' Covenant

            The Continuing Tenants and the New Tenant covenant with the Landlord that they will from the date of this deed observe and perform all the obligations on the part of the tenant contained in the Agreement and otherwise relating to the Tenancy

            7. Deed

            This instrument is executed by the parties as a deed


            Signed as a deed by [insert name of the Continuing Tenant 1]

            in the presence of:


            Witness signature


            Witness name


            Address


            Occupation


            [Repeat above as necessary according to number of Continuing Tenants]


            Signed as a deed by [insert name of the Departing Tenant]

            in the presence of:


            Witness signature


            Witness name


            Address


            Occupation


            Signed as a deed by [insert name of the New

            Tenant] in the presence of:


            Witness signature


            Witness name


            Address



            Occupation





            Signed as a deed by [insert name of the Landlord]

            in the presence of:


            Witness signature


            Witness name


            Address





            Occupation

            Comment


              #7
              The fixed term ended 30/10/19.
              What happened thereafter (and hence the appropriate advice) depends on what the Addendum of 1/11/19 says.

              Comment


                #8
                Originally posted by Lawcruncher View Post
                An assignment where one tenant leaves and another takes his place is not that complex. I set out below a deed which covers a straightforward case where there the landlord's consent is required and there is a deposit.
                But that ignores any damage that has already been caused and the LL is able to claim from the deposit (effectively making the new tenant responsible for damage caused by the departing tenant).

                Comment


                  #9
                  Originally posted by MdeB View Post
                  But that ignores any damage that has already been caused and the LL is able to claim from the deposit (effectively making the new tenant responsible for damage caused by the departing tenant).
                  True, but that does not make the process complex.

                  Comment

                  Latest Activity

                  Collapse

                  Working...
                  X