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View Full Version : Tenants paying reduced rent - what to do?



Jaybee542
30-03-2009, 18:24 PM
Sorry this is a bit long ...

On 25 April 2008 I rented out a 3 bedroom house to 3 individuals on a 12 month Tenancy Agreement, at an agreed rent of £1,250. Whilst the Tenancy Agreement was joint and several, and I received payment in one lump sum, in reality I believe that the tenants split the rent between themselves into two payments of £500 (for each of the two double rooms) and one payment of £250 (for the remaining single room).

They paid the rent promptly until around December 2008, when I received notice that they wished to bring the tenancy to an end because 2 of them had lost their jobs. On double checking the Agreement, it seemed they were allowed to do end the tenancy on 30 days notice.

The remaining tenant - (we'll call him Tenant #1) - told me that he wished to continue renting the double room at the property at £500 pcm. He managed to find a new sharer for the other double room at £500 pcm (we'll call him Tenant #2). He also told me that he would continue to search for a third sharer to pay the remaining £250. On this basis, in December 2008, I agreed to a new 6 month Tenancy Agreement whereby the rent would be £1000 for the first three months of the tenancy and £1250 for the second three months (by which time a third sharer should have been found).

Three months into that agreement Tenant #1 has found a third tenant (Tenant #3) but Tenant #2 is now leaving. According to Tenant #1, Tenant #2 has failed to pay his share of the rent since January 2009 and Tenant #1 has been meeting the shortfall, which he can no longer afford to do. He tells me that he is looking for another sharer but is yet to find one.

This month I received rent of £750, (presumably made up of £500 from Tenant #1 and £250 from Tenant #3). Whilst I could live with the original reduction of £250 pcm to £1,000, a reduction to £750 means a fall in rent of £500 pcm.

I am considering allowing the tenants to stay in the property until the end of the Tenancy Agreement (June 2009) at the reduced rent of £750 if they are prepared to agree that I do not have to return their original deposit of £1250 as, frankly I am keen to avoid the hassle and cost of getting rid of them and finding new tenants in the short term. However my concern is that I am now dealing with different people - i.e. not the same people who signed the December Tenancy Agreement. Am I therefore technically entering into a new Tenancy Agreement? And if it is a new agreement, would I be entitled to vacant possession in June? Would I need to give notice now to end the agreement in June?

I should end by saying that the Tenant #1 does seem like decent honest person and the house is exceptionally clean. However, I fear that if I simply allow another reduction, there is really no incentive for him to find a third sharer. BTW it looks like the standard rental for this type of property in this area is £1000 to £1100 per month, so rent of £750 would be very cheap.

For those who made it to the end of the saga, thoughts would be welcome!

Jaybee542
31-03-2009, 07:57 AM
Just bumping this as it as slipped to the second page with no responses. Any thoughts appreciated!