Tenants in AST leaving early

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  • Tenants in AST leaving early

    My tenants signed a 6 month AST via a letting agent when they first moved in in September 2004. At that time they paid me 6 months up front and a deposit.

    In March 2005 the AST ran out, and I had them sign an identical AST but this time for a period of 12 months. They then begain paying me 1 month in advance. A few months into this AST, both tenants stopped working and started claiming HB.

    They have now informed me that the HB amount they are being paid is being reduced and that they cannot afford to stay in my property.

    I'd like to clarify a few things, and ask what my options are:

    1. Was it ok to have them sign a 12 month AST after the initial 6 months expired ?

    2. Are the tenants liable for rent up until March 2006, and in reality what does this mean -- would I have to sue them if they simply refuse to pay up ?

    3. Am I allowed to use the holding deposit to cover any of this unpaid rent, and is it advisable to do so ?

    4. Do I need to serve them with any notice, or have them provide me in writing that they are leaving ?

    My tenants have been very good and they are nice people, so I do not want to be unreasonable with them. I just need some advice on how to handle this situation.

    I want to start looking for new tenants, but not knowing when my current tenants will be moving out (they are in the process of looking for a smaller place), makes it difficult as potential tenants would want to know when to move in. Should I be getting a firm date from the tenants to move out in writing from them ?

    Thanks for any and all advice.

  • #2
    just a word of warning from my bitter experience. Tenants on 12 month AST. stopped paying. Said they could not afford it and wanted to move out. Got written notice from them saying they would move out on a specific date in 4 weeks time and that they were surrendering the tenancy. 4 weeks later they said they were not going and we would have to "throw them out". Took legal advice. Apparently the surrender is worthless in law. Top flight property solicitor who initially thought we would have no problems getting them out on the surrender grounds went back to her books and found out that was not the case. Almost 2 months later they are still there, not paying anything, hearing under section 8 not due till end Nov. So, if they give you a date and then dont go you can do nothing quickly. Beware letting to someone else then having to let them down with all the consequences that may bring for you.
    Unshackled by the chains of idle vanity, A modest manatee, that's me

    Comment


    • #3
      Originally posted by faisaluk
      My tenants signed a 6 month AST via a letting agent when they first moved in in September 2004. At that time they paid me 6 months up front and a deposit.

      In March 2005 the AST ran out, and I had them sign an identical AST but this time for a period of 12 months. They then begain paying me 1 month in advance. A few months into this AST, both tenants stopped working and started claiming HB.

      They have now informed me that the HB amount they are being paid is being reduced and that they cannot afford to stay in my property.

      I'd like to clarify a few things, and ask what my options are:

      1. Was it ok to have them sign a 12 month AST after the initial 6 months expired ?

      Perfectly ok, but I would advise against giving anyone a 12 month tenancy in the future

      2. Are the tenants liable for rent up until March 2006, and in reality what does this mean -- would I have to sue them if they simply refuse to pay up ?

      They are liable for rent up until the point you find a replacement tenant, which you must make positive steps to do.

      3. Am I allowed to use the holding deposit to cover any of this unpaid rent, and is it advisable to do so ?

      If it does not say otherwise in your tenancy agreement. I would adivise not using the deposit for unpaid rent but for delapidations only, this is becasue it restricts you from sue for unpaid rent. in reality, of course, you hold the deposit take out the delapidations and tell the tenants you will return the deposit once they pay outstanding rent, which they wont of course.

      4. Do I need to serve them with any notice, or have them provide me in writing that they are leaving ?

      You a bit stuck here, and this is why I dont renew tenancies, I just allow them to go into periodic. you could serve a S21 as backup to end the tenancy on the AST end date. Otherwise you need to hope they move as promised. If they fall 2 months behind on rent, get that S8 in, dont listen to excuses!

      My tenants have been very good and they are nice people, so I do not want to be unreasonable with them. I just need some advice on how to handle this situation.

      I want to start looking for new tenants, but not knowing when my current tenants will be moving out (they are in the process of looking for a smaller place), makes it difficult as potential tenants would want to know when to move in. Should I be getting a firm date from the tenants to move out in writing from them ?

      Thanks for any and all advice.
      Good advise from Islandgirl, you just need to keep on top of it and keep the communication going!

      Comment


      • #4
        I am not experienced on legalities. Bearing this in mind, my initial thoughts are as follows:

        (1) To make your new 12 month AST have authority, you needed to have served them notice to quit at the end of the original 6 months AST. If you didn't do this, you would have difficulties substantiating the new AST. But not to despair. All this means is that the tenancy would be regarded as a statutory periodic tenancy in a worst case scenario. Under this, you could determine the tenancy by giving at least 2 months notice.

        (2) As they are on Housing Benefit, there is no point in suing them for the remaining AST contract. As you say, they have been very good and they are nice people, so you do not want to be unreasonable with them.

        (3) In the end, you could use some or all of the holding deposit to cover any unpaid rent in respect of the period during which they have actually occupied the house.

        (4) I think it is best to work hand in hand with them. It is best to get them to give you a written notice. At the same time explain to them that you have to give them a formal notice and do this as a back up in case you have to fall back on statutory eviction.

        Remember that most local authorities will require the tenants to have been served with legal notice before they will re-house them.

        I think that you should count yourself lucky if they will leave amicably and on good terms, even if this means that you have lost some rent before finding replacement tenants.

        Ramnik
        Private advice is available for a fee by sending a private message.

        Comment


        • #5
          Originally posted by Karongo


          (1) To make your new 12 month AST have authority, you needed to have served them notice to quit at the end of the original 6 months AST. If you didn't do this, you would have difficulties substantiating the new AST. But not to despair. All this means is that the tenancy would be regarded as a statutory periodic tenancy in a worst case scenario. Under this, you could determine the tenancy by giving at least 2 months notice.
          Raminik

          Not sure thats true, remembering that the S21 is a notice that the LL wants the property back and is served without conditions. Many LL's renew tenancies with new AST's without S21's being served. Once a new AST is served, it simply creates a new Tenancy.

          What I would say, is that if a S21 has been served and a subsequent AST is signed, the S21 is deemed invalid.

          Comment


          • #6
            Originally posted by dazalock
            Ramnik

            Not sure thats true, remembering that the S21 is a notice that the LL wants the property back and is served without conditions. Many LL's renew tenancies with new AST's without S21's being served. Once a new AST is served, it simply creates a new Tenancy.

            What I would say, is that if a S21 has been served and a subsequent AST is signed, the S21 is deemed invalid.
            Hi Dazalock,

            Hence my opening paragraph stating that I am not experienced in legalities.

            So what exactly are you saying? Is it better to sign an AST without serving a notice or after serving a notice? What are the pros and cons of each method?

            Ramnik
            Private advice is available for a fee by sending a private message.

            Comment


            • #7
              You would sign each new AST together with a new S21 notice.

              Personally, I would sign a 6 month AST and serve a new S21 notice, and then allow it go periodic.

              Comment


              • #8
                C'mon guys! Thinking Caps on now!

                If a landlord & tenant want to replace an expired fixed term AST with another one they can, and there is no requirement to serve any Notices. Remember individuals are allowed to negotiate provided what transpires is lawful. If a new AST is drawn up the other one automatically is voided by this action, even if it is during the fixed term of a current tenancy; if landlord & tenant agree on something they are at liberty to freely negotiate. You can't have two tenancies running concurrently for the same premises now can you?

                It's only when one party wishes to use statutory instruments available to them does "due process" kick in.

                Procrastinating thought only confuses when you should be using reasoned thought!
                The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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                • #9
                  Thanks for all advice guys.

                  I'll be taking your advice and hoping to end the tenancy amicably.

                  Comment


                  • #10
                    Another question which has arisen.

                    As the tenants are on a fixed term tenancy, I cannot issue a S21. Therefore a S8 seems to be my only option if I need to evict them.

                    The problem is: what constitutes being in arrears ?

                    If they give me 50% of the rent on due date X, and then give me the remaining 50% before the next due date - does that mean they cannot be served with a S8 ... even though they will consistently always be in arrears month on month, but not by the required 2 months amount ?

                    Sorry if I didnt explain that very well.

                    Comment


                    • #11
                      They cannot be served a Section 8 on the mandatory 2 months arrears ground, but they can on the discretionary grounds of being consistently in arrears. I do not remember the ground numbers I'm afraid.
                      Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.

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                      • #12
                        It is a Section 8, but you can't use Ground 8.

                        Use 10 and 11. All the grounds here

                        Comment


                        • #13
                          That's useful, thanks.

                          Ive been searching posts and have some confusion as to what 2 months arrears actually means. There seems to be conflicting opinion.

                          If tenants pay on the 1st of the month, and pay 1 month in advance, then are they in arrears the day after the second month.

                          I.e. they miss payment 1st Oct. And miss payment on 1st Nov. Are they 2 months in arrears on the 2nd Nov, or do I have to wait till 2nd Dec ?

                          Thanks.

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                          • #14
                            I agree faisaluk there is some confusion. Now I saw two months arrears(and still do despite some conflicting opinion) as being when a property has been occupied, without the rent being paid for that period, for at least 2 months.

                            So, the way I see it is, if they pay a month in advance, and made a payment 1st September, this covers them for September. Then they miss 1st October, so by the END of October they are a month in arrears. Then they miss 1st November, so by the END of November they are 2 months in arrears. This is the way I see it, but I know some people have different views on this!
                            Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.

                            Comment


                            • #15
                              So if your contract states 1 month in advance, effectively you have to wait for 3 months arrears before being able to serve a Section 8 ?

                              Comment

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