Interruption of the lease due to end of employment

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    Interruption of the lease due to end of employment

    I have a question on interruption of the lease due to end of employment.

    I was employed by the American firm which has an office in London. The project I worked on was moved to the UK office and company management asked me whether I was willing to go there. I am a legal resident in the US (holding my native country passport). Since getting UK Tier 1 resident visa is a long process a 1year business visa was issued to me.

    I spent a lot of time in London office, thus I signed a 1 year lease with break clause of 6 months. £1800 deposit was paid. The lease started on July 14th 2012.

    However, last week the project went on halt, the company had reorganization. As a result I am no longer employed there starting coming Monday.

    The company was not holding a responsibility for my relocation and involved expenses living abroad. I also was on the US based payroll.

    2 days ago I paid my next month rent (September 14th – October 13th).

    There is no way I am going to stay in the UK beyond October 13th. Actually I can leave London for good on September 27th or earlier.

    Please, let me know, - what are my options in such situation. I would like to leave in a gracious manner, but have no intent to pay anything beyond my stay in the UK. Of course, I can just leave, - it is not gracious, but after reading a plenty about all the financial turmoil I can put myself into, - almost logical. I would prefer to be straight forward and notified Landlord and Agent right away and even to vacant the flat next week so thee can start a re-letting porcess, but then I will be facing all the consequences. In any case I am not getting back any money.

    #2
    Originally posted by Valma View Post
    I have a question on interruption of the lease due to end of employment.
    For a start, there is no so-called 'interruption of the lease due to end of employment'. The tenancy contract remains in place regardless of your work or financial circumstances, and you are liable for rent up to when the break clause allows you to terminate the tenancy (13th January 2013?)

    I signed a 1 year lease with break clause of 6 months. £1800 deposit was paid. The lease started on July 14th 2012.

    ...2 days ago I paid my next month rent (September 14th – October 13th).

    There is no way I am going to stay in the UK beyond October 13th....

    Please, let me know, - what are my options in such situation. I would like to leave in a gracious manner, but have no intent to pay anything beyond my stay in the UK. Of course, I can just leave, - it is not gracious, but after reading a plenty about all the financial turmoil I can put myself into, - almost logical.
    Options:

    1) Fulfill the obligations of the binding contract you signed and continue to pay the rent (and council tax/utilities) up to the earliest termination date (ideally, inform the LL that the property will be vacant).

    2) Inform the LL of your change of circumstances and try to negotiate an early surrender of the tenancy. You should expect to pay something in exchange for being released from your rental liability, perhaps a sum equivalent to a month or two of rent.

    3) Sneak off without telling anyone and leave the LL to discover, many weeks after the rent due on 14th October hasn't been paid, that you've returned to the US.

    Option 3) is, as you say, 'not gracious'. But let's not mince words; it is not merely ungracious, nor even 'almost logical', but frankly dishonest and selfish. If the LL cannot establish that you have permanently vacated, he may be forced to apply for a possession order, as this is the only way he can legally, unilaterally end the tenancy; the result may be several months' worth of lost rent.

    It is possible that the LL could obtain a county court default judgment against you; whilst the LL could not enforce it with you safely back in the US, it would remain on your credit history in the UK. He might also contact your ex-employer, which could perhaps impact on your professional reputation.

    Comment


      #3
      Contact the letting agent immediately to do an early surrender so they can get the flat back on the market. You will be liable for the commission that the landlord has paid the letting agent for the first 6 months as well as any reletting costs. Once the flat is relet, they cannot charge you for rent as well as the new tenant. As a landlord, I would rather have honesty and get it back rented out that try and hound someone for the rent when they are no longer in the country.

      Comment


        #4
        Originally posted by bbva View Post
        Contact the letting agent immediately to do an early surrender so they can get the flat back on the market. You will be liable for the commission that the landlord has paid the letting agent for the first 6 months as well as any reletting costs.
        A tenant is not 'liable' for the LL's costs in the event on a mutually agreed early surrender. The LL may make his acceptance of a tenant's offer to surrender conditional on payment of £X, but the T is free to reject the LL's terms and/or negotiate the amount of £X.

        In any case, the agent's commission may be refundable if the tenancy ends early. If one of my tenants serves notice under a break clause my agent refunds the appropriate portion of the commission paid in advance.

        Comment


          #5
          Originally posted by westminster View Post

          In any case, the agent's commission may be refundable if the tenancy ends early. If one of my tenants serves notice under a break clause my agent refunds the appropriate portion of the commission paid in advance.
          But he is not serving notice under a break clause therefore he would be liable for the first 6 months commission.

          Comment


            #6
            Originally posted by bbva View Post
            But he is not serving notice under a break clause therefore he would be liable for the first 6 months commission.
            Surely that depends on the terms negotiated between landlord & agent.

            Comment


              #7
              Originally posted by bbva View Post
              But he is not serving notice under a break clause therefore he would be liable for the first 6 months commission.
              The T has no contract with the agent; he is not 'liable' for the agent's fees. And as both Snorkerz and I have pointed out, the fees may be refundable, anyway, regardless of whether the tenancy ends early by notice under a break clause or by surrender (I once had a T who wanted out two weeks into a 12 month tenancy, and a new T was found two weeks later - but I only pay % commission on the rent due for the duration of the tenancy, whether the tenancy turns out to be one month or 12; you'd have to be insane to agree an agency contract where, in this situation, you'd end up paying double commission for 11 months).

              It is entirely a matter of negotiation between T and LL as to the terms of the surrender, i.e. the amount T agrees to pay LL in exchange for being released early from his liability for rent.

              Example: Let's say the rent is £1,000 per month. Let's say that the agent's commission on the rent is refundable, but there are admin fees of £250 which are not. The LL may also feel he deserves compensation for the hassle of reletting so soon after the tenancy started - call it £250. Then the LL needs to estimate how long it will take to relet the property following the surrender - call it a month, so he adds £1,000, to ensure that he is not out of pocket if it takes a month to find a replacement, though he hopes he'll find one within two weeks. Plus another £100 for cleaning. Total £1,600. So he might kick off negotiations by asking for £2K, but settle for £1,500.

              Comment


                #8
                Tenant is liable for what the landlord is out of pocket. The agents I deal with in London would not refund the commission before the break clause kicked in. They did their job and found a tenant and in their contract the landlord is liable for the first 6 months commission. So I would charge the tenant the commission for the first 6 months plus the admin fees plus a month's void plus 20% VAT.

                Comment

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