Mutual Termination of AST Agreement

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    Mutual Termination of AST Agreement

    Hello,

    Could somebody please advise...

    My tenant and I have mutually decided to end the AST early.

    We have both signed a letter stating that we have mutually agreed to end the contract with no further liability for either party after the 28/01/2012.

    Now that this letter (I produced it based on a template from the internet) has been signed by both parties and we both hold a copy, is it a legally binding document?

    After the date stated, does the T have any legal right to the property? Can I for example, change the locks on 29/01/2012?

    Thank you for your advice.

    #2
    I think you would still be in trouble if tenant came home and couldn't get in, and went to the council for re-housing.

    Best to wait and see if T does move out, and gives you your key back.
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

    Comment


      #3
      Originally posted by JK0 View Post
      I think you would still be in trouble if tenant came home and couldn't get in, and went to the council for re-housing.

      Best to wait and see if T does move out, and gives you your key back.
      Ok, fair enough - but is the termination of contract agreement binding. If the T decides not to move out afterall, what can I do as a LL to enforce the surrender of posession?

      Thanks again.

      Comment


        #4
        I think you still have to go through the rigmarole of giving 2 months notice via section 21, (or section 8 if he gets in two months rent arrears.)

        If you sued tenant in court for not moving out, I expect the judge would tell you the same thing.
        To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

        Comment


          #5
          Originally posted by bgcm12 View Post
          Now that this letter (I produced it based on a template from the internet) has been signed by both parties and we both hold a copy, is it a legally binding document?
          In order to effect an early surrender, the T must first voluntarily vacate, then you and T must sign a Deed of Surrender. It must state that it's a Deed and be executed as a Deed (i.e. witnessed by a third party). Here's a template by one of our legally qualified members:
          http://www.landlordzone.co.uk/forums...236#post209236

          After the date stated, does the T have any legal right to the property? Can I for example, change the locks on 29/01/2012?
          No, you cannot change the locks on 29th Jan if the T is still in occupation; whatever you and she have signed, you need a court order to evict T.

          Comment


            #6
            Originally posted by westminster View Post
            In order to effect an early surrender, the T must first voluntarily vacate, then you and T must sign a Deed of Surrender. It must state that it's a Deed and be executed as a Deed (i.e. witnessed by a third party). Here's a template by one of our legally qualified members:
            http://www.landlordzone.co.uk/forums...236#post209236


            No, you cannot change the locks on 29th Jan if the T is still in occupation; whatever you and she have signed, you need a court order to evict T.
            I see, thanks for that info. Just out of curiosity then, does the "termination agreement" mean as little for the T? If I tell her "actually, I've changed my mind" is she then obliged to pay rent as per the AST until the end of the AST contract?

            Comment


              #7
              As you have signed a letter agreeing to termination, albeit not a Deed, I think the T can assume you have accepted her offer of surrender and cannot change your mind. The T DID make an offer to surrender first?

              Comment


                #8
                Sorry to trouble you, but how do you add a new post to this forum?

                Hope you can help

                Regards Peter

                Comment


                  #9
                  Originally posted by PETER1000 View Post
                  Sorry to trouble you, but how do you add a new post to this forum?

                  Hope you can help

                  Regards Peter
                  What, about Finedon Hall???

                  Click on "Residential Letting Questions" and there's a "Post New Thread" option to click on...

                  Welcome!!
                  I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                  Comment


                    #10
                    Originally posted by bgcm12 View Post
                    I see, thanks for that info. Just out of curiosity then, does the "termination agreement" mean as little for the T? If I tell her "actually, I've changed my mind" is she then obliged to pay rent as per the AST until the end of the AST contract?
                    The rent is payable for as long as the tenancy is in place. If the T doesn't move out, the tenancy won't end before fixed term expiry.

                    Comment


                      #11
                      Originally posted by westminster View Post
                      The rent is payable for as long as the tenancy is in place. If the T doesn't move out, the tenancy won't end before fixed term expiry.
                      Westminster - if this had happened in a SPT then it would have been treated as 'notice' and the notice would have brought the tenancy to an end. As it is in a fixed term, would the tenants surrender not have the same effect?

                      In which case an n5/n119 eviction could be effected without notice.

                      Comment


                        #12
                        Why does this need to be a deed at all? I can't see there's any failure of consideration since both parties receive something of legal value. Is it because a surrender of a tenancy is not covered by the exception to the general rule in the Law of Property Act that dispositions of land need to be made by deed? If so the letter should operate as a contract to surrender an interest in land and will be enforceable against the tenant (ie you can get a court order making him sign a deed if he refuses to).
                        Disclaimer:

                        The above represents my own opinion, derived from personal knowledge and should not be relied upon as definitive or accurate advice. It is offered free of charge and may contain errors or omissions or be an inaccurate opinion of the law. I accept no liability for any loss or damage suffered as a result of relying on the above.

                        Comment


                          #13
                          Originally posted by bhaal View Post
                          Why does this need to be a deed at all? I can't see there's any failure of consideration since both parties receive something of legal value. Is it because a surrender of a tenancy is not covered by the exception to the general rule in the Law of Property Act that dispositions of land need to be made by deed? If so the letter should operate as a contract to surrender an interest in land and will be enforceable against the tenant (ie you can get a court order making him sign a deed if he refuses to).
                          First, it is necessary to distinguish between an agreement for surrender and an actual surrender - they are equivalent to "contract and conveyance" when there is a sale.

                          An agreement to surrender must comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. An agreement to surrender cannot be made orally. A written agreement must, like any other contract, be supported by consideration. The section is drawn up so that it is difficult, if not impossible, to create a contract for the disposal of an interest in land by letter.

                          As to how a surrender is effected, the starting point is section 52(1) of the Law of Property Act which says:

                          All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed.

                          However, section 52(2) provides:

                          This section does not apply to—
                          [...]
                          (c)surrenders by operation of law, including surrenders which may, by law, be effected without writing;
                          [...]


                          A valid agrement to surrender does not effect a surrender. Ideally it should be perfected by a deed which will put the matter beyond doubt. If either party refuses to complete the agreement the other may apply for a decree of specific performance.

                          If there is an agreement to surrender (whether valid or not) and the parties proceed as if there were an actual surrender such that it would be inequitable for either party to seek to rely on the requirement for a deed, then there will be a surrender by operation of law.

                          Comment


                            #14
                            Wow, some very technical details of law there and seemingly some difference of opinion.

                            Without wishing to go around in circles, is there any consensus as to the situation?

                            With an agreement for surrender in place, should the T have to move out, and if she doesn't is it enforceable through the courts?

                            (I will be taking a Deed of surrender with me on moving-out day and asking T to sign it).

                            Thanks all.

                            Comment


                              #15
                              The law provides a sure fire way of surrendering a tenancy: a deed. If a deed of surrender is executed then the tenancy comes to an end. (For the record it should be noted that: (a) if a residential tenancy is surrendered by deed and the tenant remains in occupation a court order is required to get possession and (b) if the tenant stays and the landlord demands or accepts rent for a period after the surrender a new tenancy may arise.)

                              However the law recognises that situations arise where the parties act in such a way that it would be unreasonable for either of them to rely on the need for a deed. An example: a tenant says to his landlord that he wants to leave. The landlord agrees he can leave early without giving notice. They meet at the property. The tenant hands over the keys and leaves with his belongings to take up residence elsewhere. The landlord has a tenant lined up who moves in. The tenant cannot return saying he wants to move back in because because he does not like his new property. If the new tenant fails to pay the rent the landlord cannot insist that there was no surrender because reletting is inconsistent with the old tenancy continuing. In practice not all cases will be that straightforward.

                              An agreement for surrender is an executory contract, that is one which imposes obligations to be complied with at a later date. The essential obligations are that the tenant will surrender the tenancy and that the landlord will accept the surrender. If a party fails to comply with its obligations the other party can sue for breach of contract.

                              If the landlord and tenant have a clear agreement that a tenancy is to be surrendered and there are no complications, then the counsel of perfection is to proceed as outlined in the thread mentioned above by Westminster. If you rely on an oral agreement, an exchange of letters, a hastily written agreement or arguing there will be a surrender by operation of law it can all come unravelled.

                              Comment

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