Handling change of tenant at renewal of joint tenancy

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    Handling change of tenant at renewal of joint tenancy

    I have some very good, long-standing tenants; three sharing a house on a joint tenancy. The latest fixed period is about to end, and they have asked to renew it, but have advised me that tenant C has moved out. They've owned up that a friend, D, is currently staying as a 'guest' (and is presumably already contributing to the rent payments I receive from tenant 'A'), and who now wants to go on the agreement in place of C. I've now met D, had her fill out a tenancy application form and am now doing my usual vetting process; and although I've made no promises, I'm 99.9% sure it will be fine. So I just want to check I'm managing the process correctly.

    Deposit is protected with the DPS, the lead tenant 'A' is named as being responsible for the deposit on the tenancy agreement and with the DPS. 'A' tells me that they've sorted out the deposit cash between them. The plan therefore is that once 'C' is signed up as a tenant, 'A' will approve the release of the full deposit to me, whereupon I will immediately resubmit it to DPS under the new tenant names, and issue the PI of course.

    Next, inventory. The house looks to be in great condition from a fairly cursory inspection. I'd prefer to avoid redoing the entire inventory now if I can help it, not least because the place is let unfurnished and is full of all their stuff now. Because 'D' is already living in the property, I am proposing to provide her with a copy of the current inventory in advance, and making her responsible for checking the property against, making it clear that she will then be jointly responsible for making good any damage at the end of the tenancy; and that in effect by signing it she is letting the departing tenant 'C' off the hook for any damage currently present (I very much doubt that there is any).

    So, does that all sound kosher and above board - am I leaving myself open to any pitfalls? In particular does it matter that I've had no communication at all with 'C' about any of this? I'm told he's now returned permanently to his home country, and I've no reason to doubt any of this, but still. I do have an email address for 'C' for what it's worth.

    Thanks for any advice.

    #2
    There's a minor risk of having two tenancy agreements at once.
    The old tenancy (with C on it) doesn't formally end (the end date is reached but the tenants haven't given notice and don't quit, so it becomes periodic).
    The new tenancy agreement (with D) doesn't automatically supersede the old one, because the tenants are different.

    How risky is that in real life?
    Not very - but it is a pain that one of the remaining tenant's didn't give notice to quit a couple of month's ago.
    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
      If you have tenants A, B and C on a fixed term tenancy when it ends, if any of A, B or C remain in occupation, a statutory periodic tenancy arises. This will be the case even if you grant a fixed term tenancy to A, B and D. Obviously you do not want the complication of concurrent tenancies so you need to get C out of the picture. Since C is out of the country a surrender is not going to be convenient. What you need to do is this:

      1. Draw up a tenancy agreement in favour of A, B and D for a fixed term starting on the day after the notice to quit referred to in paragraph 2 expires.

      2. Draw up a notice to quit dated the day after the fixed term expires. The notice should provide for the periodic tenancy which will arise to expire on the earliest date possible. Include a belt and braces saving provision.

      3. On the day after the fixed term expires you A, B and D all get together. You all sign the new tenancy agreement in duplicate and A (or B) signs the notice to quit. You take up the notice to quit. The parties then date and exchange agreements with you taking up the part signed by A, B and D and A, B and D taking up the part signed by you.

      If you do that you will have a tenancy with A, B and C as tenants followed seamlessly by a tenancy with A, B and D as tenants with no awkward interest of C hanging about.

      The inventory (by which of course you mean schedule of condition since the property is let unfurnished!) is a bit tricky. The problem is that you have a new tenancy. You have three basic possibilities:

      A. Do as you propose and hope for the best.

      B. Use the same inventory and have a provision which says that it applies notwithstanding that it was prepared x years ago. Whilst acceptable in theory a bit dodgy because you never know what view the DPS or court will take of it.

      C. "Check out" A, B and C and (assuming all is in order) sign them off. (If all is not in order then you need to sort that out.) You then start again with A, B and D using the old schedule as a basis for the new.

      C has to be the counsel of perfection. In the circumstances you really have to ensure that there are no issues outstanding under the existing tenancy. Granting a new tenancy will, even if it does not in theory release A, B and C from their obligations under it, make it difficult to enforce them. If you let to L, M and N and then to P, Q and R there is no way you can sue P, Q and R for breaches by L, M and N. The same principles applies here even though A and B will be common to both tenancies.

      The deposit is also tricky. The concept of "lead tenant" is something which has sprung up with the advent of deposit protection. I am not convinced it has any legal validity in the absence of express agreement between landlord and tenants. Since you have C's email address I think the best you can probably do is to see if you can get him to confirm that his part of the deposit has been paid to him by D and that he has no claim against you for it. Failing that, and indeed in any event, ask D to show that he paid C.

      Comment


        #4
        Hmm, complicated then. Glad I asked (I think!)... thanks for the detailed exposition.

        Originally posted by Lawcruncher View Post
        What you need to do is this:
        1. Draw up a tenancy agreement in favour of A, B and D for a fixed term starting on the day after the notice to quit referred to in paragraph 2 expires.
        2. Draw up a notice to quit dated the day after the fixed term expires.
        OK, I get the need to avoid concurrent tenancies - that hadn't occurred to me I have to say. But what about if I could get the now-departed tenant 'C' to email me that he's leaving/left, and I accept this notwithstanding the absence of proper notice? Does my acceptance not override the lack of notice and end the tenancy?

        Originally posted by Lawcruncher View Post
        The inventory (by which of course you mean schedule of condition since the property is let unfurnished!) is a bit tricky. The problem is that you have a new tenancy. You have three basic possibilities:

        A. Do as you propose and hope for the best.
        If I do that, I will end up with a full inventory, sorry, schedule of condition!, correctly signed and dated by all parties. Is that fundamentally different to your option 'C', given that I would propose to give the new tenant the old schedule to check through anyway at her leisure, as the basis for the new one (and I would describe the process in a covering letter to her, to have something to wave at DPS later on should there be any shenanigans over later deductions)? For what it's worth I've already made one change to the original myself, since I replaced a worn-out carpet a few months ago.

        Comment


          #5
          Accepting notice from C doesn't just end the tenancy for C though, it ends it for all of them. Accepting notice from C is no different to what lawcruncher proposes in step 3 getting A or B to give notice.

          Comment


            #6
            Originally posted by elniinio View Post
            Accepting notice from C is no different to what lawcruncher proposes in step 3 getting A or B to give notice.
            Aye, but it would be an awful lot easier to achieve if it 'works'!

            Comment


              #7
              Originally posted by Ericthelobster View Post
              OK, I get the need to avoid concurrent tenancies - that hadn't occurred to me I have to say. But what about if I could get the now-departed tenant 'C' to email me that he's leaving/left, and I accept this notwithstanding the absence of proper notice? Does my acceptance not override the lack of notice and end the tenancy?
              Not really, no.

              As jpkeates says, you can fudge it and it is more than likely to turn out all right. The law recognises that messy situations arise because tenancies may not be ended formally and will imply a surrender or otherwise deem a tenancy to have come to an end if it is equitable to do so. However, when certainty can be achieved without too much difficulty it is best to go for it.

              Originally posted by Ericthelobster View Post
              If I do that, I will end up with a full inventory, sorry, schedule of condition!, correctly signed and dated by all parties. Is that fundamentally different to your option 'C', given that I would propose to give the new tenant the old schedule to check through anyway at her leisure, as the basis for the new one (and I would describe the process in a covering letter to her, to have something to wave at DPS later on should there be any shenanigans over later deductions)? For what it's worth I've already made one change to the original myself, since I replaced a worn-out carpet a few months ago.
              What I think you need to avoid is the possibility of anyone arguing that an old schedule has been foisted on them or that the job has not been done properly. Again, if clarity can be obtained without too much effort it is best to go for it.

              Comment

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