My tenants have broken up, what does this mean for the tenancy?
While the personal lives of your tenants is not your concern, there are times when it can affect you – a break up being the biggest one of all!
Your tenants are entitled to privacy in their home and there are very few instances where what they get up to becomes your business:
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- Criminal activity. If you suspect your tenant of committing crimes in your property, you have a duty to report this to the police. This could include anything from running a brothel to growing cannabis
- Anti-social behaviour. If your tenants are creating a nuisance for their neighbours, you are likely to be the first port of call for a complaint. This can be escalated to the police, if necessary
- Abuse. This is a complex situation, but the government has urged landlords (and private housing associations) who spot abuse to report their concerns
- Damage. If you find that your tenants are not taking care of the property as they ought to, this very much becomes your problem to deal with
But today’s question is around break ups and, unfortunately, this is something that will eventually involve you.
What does a break up mean for the tenancy?
If your tenants are on a year’s contract and they break up before the year is up, there are few things you need to understand before you can figure out your next steps:
- Will they continue living together?
- Will one move out? If so, can the other afford the rent alone?
- Does the remaining tenant want to bring in a flatmate?
- Would both prefer to move on and break the tenancy agreement?
Depending on the nature of the break up, you may not have to do anything. If they are close to the end of the tenancy and decide to amicably ride out the rest of it while they look for new places to live, you need only look for new tenants.
However, if the break up affects the agreement, this will mean you will have to get involved.
What to do if one tenant decides to leave ?
Don’t be tempted to just allow the tenancy to continue under the remaining tenant without updating any of the paperwork. If you don’t update the agreement, the departing tenant still has right of access to the property and can be pursued for future rent arrears, neither of which are ideal for the tenant who has left!
The first thing you will want to do is break the current tenancy agreement that is with the two tenants. The tenant who is leaving will need to sign a Deed of Surrender so that they no longer have any rights and responsibilities over the property.
You then need to consider the deposit as a joint tenancy means you will have received a single deposit. You won’t know how much each tenant put in, so the easiest thing is to return the deposit for them to divide between themselves.
You will then need to set up a new tenancy agreement, including a new deposit with the tenant who decides to remain. Don’t be tempted to cut corners here – make sure you dot all the i’s and cross all the t’s:
- Protect the deposit. When you receive a new deposit from the remaining tenant, make sure you protect it in a government approved scheme within 30 days of receipt and that you give the prescribed information to the tenant
- Hand over all the certification. It might be the same tenant, but it’s a new tenancy, so be sure to submit all the legal documents you need to – Gas Safety, EICR and EPC. You’d also be wise to do another check of the fire alarms in the property too
- Do your checks. Again, it might seem like a waste of time, but do the Right to Rent checks again too!
Now would also be a good time to look into Rent Guarantee Insurance. You know that both tenants could afford to cover the rent, but now it’s just one person, it’s worth getting the cover in place to protect yourself going forward.
What if both tenants want to leave?
This is a much more simple arrangement, as it’s a simple case of breaking the tenancy agreement and signing a Deed of Surrender.
Technically, at this point you could choose to charge an ‘early termination fee’ because they are leaving before the mutually agreed end of the tenancy. This should cover any ‘reasonable’ costs, so either the cost of finding a new tenant or the rent up until the end of the fixed tenancy period.
Think about this before you go ahead – depending on how close it is to the end of the agreement, asking for the rest of the rent could really add up to a huge amount. Given this is already a stressful and emotional time, this added financial pressure could be more than your tenants can bear and you could find yourself in a struggle to recoup your losses.
With Mashroom, you can list your property for free for 30 days on Rightmove and Zoopla, so you could find yourself a new tenant pretty quickly and not need to worry about pushing for reimbursement from your previous tenants.
What if one tenant wants to stay with a housemate?
Again, we’d recommend that you break the existing tenancy and get a Deed of Surrender and then start a new tenancy. While this can feel like a lot of additional paperwork, it’s really essential that you do this. If you don’t, well, it might be ok. You might not need to pursue tenants for unpaid rent, for example, or keep back the deposit for damages. But what if you do?
Having your paperwork in order makes that a lot easier in the future.
And when it comes to adding someone new to the tenancy, this is even more important as you will need to take the additional step of checking with your local council to see if you need to register for a HMO licence. The rules can vary from place to place, so it’s always good to check.
While all of this can sound like a bit of a nightmare, it’s really important that you keep all of your paperwork up to date and above board and remember, however frustrating it is for you, it’s going to be much worse for your tenants.
