surrender of lease charges

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    surrender of lease charges

    Hi,
    I'm trying to assist a family member who is in the process of surrendering a lease on a shared flat (all tenants moving out). The landlord agreed as the reasons were reasonable. He's sent an email stating that there will be costs that the tenants have to meet, charged by the letting agent for finding new tenants etc. I've tried to do research & read the Tenant Fees Act 2019 etc, stating that the costs need to be 'reasonable' but it seems quite hard to work out what that means. I've read some examples of half a months rent or set charges of a few £100. Are there any guidelines for how these charges are set ? thanks

    #2
    What can be charged is limited to the landlord/agents actual costs.

    The practical issue is that the landlord/agent doesn't have to agree to an early surrender at all, so any dispute about what costs are reasonable or not may result in the surrender being declined.
    That isn't the correct legal outcome, but there is what's right and what happens.

    Strictly speaking, the cost of finding a new tenant aren't associated with the early end of the tenancy, because they would have been incurred anyway when the lease ended, they're just being brought forward.
    But I don't think that's a great argument to be making.
    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
      I think they are real costs. If you have to pay the costs of 2 new tenancies in a tax year instead of one then it is a loss. However, I agree that the fee has to be limited to the landlords actual costs. I assume that this may mean a partial refund if too much is taken initially, although I've never heard of that happening.

      Comment


        #4
        thanks for the replies. As stated the landlord has agreed (I won't go into details but it wasn't simply that the tenants decided they wanted to move). The problem is that terms like 'reasonable' & 'real' costs don't mean much when there is no way for a tenant to find out what those are except from the people charging them. The landlord seems ok but an agent is an agent & surely there should be some legislation that states what agents can charge & how they prove this are the 'real' costs involved. For example the landlord claims that the agent has a long list of tenants looking for properties, so they shouldn't have to do much in the way of marketing etc.

        Comment


          #5
          The amount the landlord can charge is limited to their actual "loss" and the agent's charges should be "reasonable".

          In practice, the landlord's loss is likely to be what the agent charges them for ending the tenancy early, because the agent shouldn't be making money from the tenant for the termination.
          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
            And while it's not a particularly fair thing, the reality is that the landlord can simply change their mind and insist that the tenants continue to pay rent until the end of the fixed term, whether they continue to live there or not.
            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


              #7
              thanks. Yes, understood. The agent claim that the costs are what they normally charge for advertising a property / finding tenants, but is that right or should it be a lower cost that only represents the ending of a tenancy early ? What I mean is are those two sets of charges supposed to be different, in law?

              also, perhaps someone could clarify this from the lease. In one section it states;

              Surrender of the tenancy by the tenant
              Strictly with the landlord’s or his agents prior written consent and subject to certain conditions that may include the landlord’s reasonable costs associated with the re‐letting of the premises, the tenant might be allowed to surrender or give up this tenancy before it could otherwise lawfully be ended.

              & in another;

              if the landlord agrees to allow early surrender of tenancy without holding tenants to contract (in very rare instances) then a fee of £50 is payable to facilitate necessary documentation and to cover administrative costs


              is that £50 amount a different charge than the 'reasonable costs associated...'

              thanks

              Comment


                #8
                There's a limit of £50 for changing a tenancy - for example, if one of the tenants is replaced by someone else.

                If the outcome is anything less than the remainder of the tenancy rent, the tenants are doing fine.
                Many landlords would decline to early terminate a tenancy now they have no room to agree a compromise with the tenants.
                It's a particularly poorly thought through part of the law.
                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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