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View Full Version : Four tenants, one leaving - advice welcome!



Pob
18-02-2007, 19:15 PM
Hi,

Not a biggie (I think), but I'd appreciate some advice on this. We have four tenants on a joint AST. Although they're only 4.5 months into a 6 month contract, one of them wants to move out; since the other 3 have found someone else who wants to move in in his place, we've agreed to this.

Now, my understanding is that since the four are jointly & severally liable, then legally when one moves out and another in we have to terminate the old contract and set up a new one. This is where the question comes in.

When the tenants moved in, we agreed to a 6-month initial term, moving on to a rolling month-by-month once the initial term had elapsed. One of the tenants has now got back to us saying that although she intends staying in the house for the next 6 months, 'you never know what might happen,' and so she feels it's unfair of us to ask them to sign another 6-month contract when they were within 6 weeks of moving on to a month-by-month deal.

What do you think we should do? I don't want to be unfair - but would we be disadvantaging ourselves by offering them, say, a 6-week AST? Would appreciate any input from more experienced landlords.

Best

Pob

MrShed
18-02-2007, 21:12 PM
I would offer them a 2 month AST. There are no problems with you doing this IMO, although I am sure that other people may disagree. 6 weeks may cause issues with payment dates etc, so I would stick to multiples of months.

jeffrey
19-02-2007, 09:31 AM
Or join in a Deed of Assignment to vest old AST in names of 3 continuees + 1 new person.
Must be by Deed to be effective. L should be party as well as departee, three continees, and new person.

Paragon
19-02-2007, 09:40 AM
Perhaps, you can leave things as they are. The one tenant moves out, the other three remain and are still liable for all bills. The other person moves in and write them a letter that you consider him a guest of the other three and has no rights to the property.

P.Pilcher
19-02-2007, 09:43 AM
To add to MrShed's comment: You can issue an AST for any fixed period you like. The law merely prevents you from regaining possession of your property under section 21 for a period of six months from the inception of the AST. This is one of the reasons why most AST's have a fixed period of 6 months.

P.P.

Pob
19-02-2007, 19:39 PM
Thanks, everyone, for your input.

It doesn't look, from what you're all saying, as if there's likely to be any major problem caused by the tenants only being committed for another 2 months while we're (because of the S21 limitation P.Pilcher mentions) committed for 6, which was a concern.

Not sure I feel comfy with the idea of pretending one of them's only a guest, and I don't really know anything about Deed of Assignment, so the 2 month AST seems like the plan.

Bel
19-02-2007, 21:20 PM
Thanks, everyone, for your input.

It doesn't look, from what you're all saying, as if there's likely to be any major problem caused by the tenants only being committed for another 2 months while we're (because of the S21 limitation P.Pilcher mentions) committed for 6, which was a concern.

Not sure I feel comfy with the idea of pretending one of them's only a guest, and I don't really know anything about Deed of Assignment, so the 2 month AST seems like the plan.

Shoot me if I'm wrong; but the 6 month thing no longer applies they have already been there 6 months; you just need to give the correct notice when you serve the s21 if you need to use one (ie 2 months plus, depending on timing)

MrShed
19-02-2007, 21:28 PM
Correct Bel - the security of tenure from S21 does not apply to renewal tenancies. However, in this case it would I believe, as it is a new tenancy in effect.

PaulF
19-02-2007, 23:51 PM
Problems are............

Take rent from the new occupant and he can claim tenancy rights beginning from the day he moves in, which would almost cetainly teminate the first tenancy and create a new periodic AST.
There's nothing to stop you drawing up a new monthly periodic tenancy with no fixed term from the outset anyway, bearing in mind the S.21 constraints.
If you are happy with him being a "prermitted occupant" then write to the remaining tenants and say so, but..........
Make sure you inform the outgoing tenant of his legal liabilities until the tenancy ends: he might not want to be held to this and it would be your choice, so you might just have to draw up a new agreement to avoid possible confrontation. You should also not release any of the deposit until the tenancy was terminated, as the amount stated (if any), would be false after he left if you were to do so.
If you accept termination from the one tenant (i.e. release him from his legal obligations) then you have automatically accepted surrender of the tenancy as a whole.
The potential flaws in Jeffery Shaw's suggestion, of a mistake in any wording, I would advise a solicitor to be involved. This would cost a lot more than a new agreement.
The 2004 Housing Act is supposed to be addressing this problem to avoid the drawing up of a new AST when one tenant wishes to vacate but details aren't yet known.

Bel
20-02-2007, 13:22 PM
Correct Bel - the security of tenure from S21 does not apply to renewal tenancies. However, in this case it would I believe, as it is a new tenancy in effect.

Good point Mr Shed. Serves me right for trying to be clever.;)

Pob
21-02-2007, 10:24 AM
Thanks, Paul - that confirms some of my thinking and fills in a few holes, too.