Here is a rather long question to the blog clinic from Geraldine who is a tenant:
I moved to London last summer (I’m french and prior to moving I lived in France). We are a family of 4 and we signed an AST for private housing with an estate agent. It’s our first move to London and we didn’t know anybody here.
When signing the contract we were asked how long we thought staying in London and we said certainly 3 years or more (for us it was an approximative answer). So we signed a contract for 3 years.
For your information, my husband was hired by a Scottish company on June so it was a brand new job and new company contract for him. At the same time, we had to find school for our teenagers. Regarding their age and the delay for school registration, we only had choice for French high-school. Our daughter had no other choice to go to school 50 minutes away from home.
It’s been six months now and our daughter doesn’t feel well at all about being so far from school. We decided to ask our landlord if there was a possibility to find a solution about that matter.
1/Here is part of our letter to the landlord:
“Currently, our daughter X studies at X High School. It takes her at least 50 minutes to get there and she clearly doesn’t feel well about it (it is unsafe and tiring). She ended the first 4 months exhausted and is already very worried about going back to school. We are deeply concerned about it.
We understand, now, that we signed a 3 years rental contract with no break closure of any kind. Actually, when signing the agreement, we were not informed at all by the agency how house renting contract work in England.
In France, when you rent a house, you can leave anytime as long as you have informed the landlord 3 months earlier. We were not aware moving to London that the rules were different. When the agents asked us how long we would stay, we said 3 years without knowing that we would be engaged for 3 years with no exit options.
We absolutely need to find a quick solution in order to move the family nearby Wembley.”
2/ Landlord answer:
“I’m sorry to hear about your daughter’s long commute to school. I thought you were hoping to transfer her to the X School?
I let the agents know about your situation and they said they were going to send you an email outlining what your liabilities would be for breaking a lease contract.
For us, a 3 year lease was ideal and that was one of the reasons that we choose your family to become our tenants over the other applications. However, we understand and sympathise with your situation.
I will back in July and ideally I will be there for any tenant change over. Would you consider completing 1 full year of the lease and move out in July?”
3/ The agent answer :
“I have been made aware that you have enquired about the possibility of terminating your lease outside the terms of the tenancy agreement. The purpose of this letter is to outline your liabilities and legal position according to the terms of your lease.
Your rental liability will continue to the end of the lease 30/06/2018.
If the landlord agrees to place the property back on the market in order to find a replacement tenant, your liability for rent will cease from the day any replacement tenant starts paying rent. From this point until the break point in the lease or the lease end point, whichever is the sooner, there will be liability to refund to the landlord the lettings commission they have paid to us on the remaining period of the tenancy.
It is important to note that if the property is let to a replacement tenant at a lower rental than that within your tenancy agreement, then there may further liability for the difference, together with any costs associated with organising a replacement tenancy.
Please note no termination will be processed for with receiving your written notice. If you have any further queries please do not hesitate to contact me.”
So I called the agents concerning the email answer they sent me in order to have them explain to me the impenetrable meaning of such sentences (remember I’m french).
I was told that even though there’s a new tenant, we would have to pay the landlord the letting fee commission which he told me by phone was 10% of our monthly renting rate (£3000) + VAT until the end of our contract (June 2018).
For your information, this clause (not the amount) is actually in our contract (I checked since the agent told me it was) but sincerely I never understood what it meant until having him explained to me on the phone 2 days ago. I write below what is EXACTLY written in the contract :
“If the tenants vacate the property during the term, the tenant will remain liable to pay rent and any other monies payable under his agreement until the term expires or the property is re-let whichever is earlier, whether or not the tenant chooses to continue occupying the property. If the property is re-let during the term, the tenant will reimburse the landlord for any letting agents’ fees or other reasonable costs incurred from that point until the end of the term. This will include a deduction to compensate the landlord for any letting commission charges payable to [the agents] for the period of the term in which rent was not received as a result of the tenant terminating the tenancy in a manner contrary to the terms of the tenancy agreement. For the avoidance of doubt this clause shall not take effect where the tenant is operating a break clause contained in this agreement.”
Concerning the second part of his mail further liability for the difference if the new tenant pay a lower rental), I never got informed about that and it is not written in our contract.
When signing the contract we never got any kind of advice about all this terms and as french speaking tenant it was not obvious for us to be aware of all these specific terms.
We were never informed that we could and should have a break clause since we signed for a 3 years contract especially as foreigners with the high probability of moving for professional reasons.
Today I’m mostly upset with the agents since the landlord seems to understand our situation but the liabilities given by the agents don’t allow us to move.
So I would like to know what are our possibilities of ending a fixed term AST if the landlord agrees and without having such fees to pay? Is it legal?
Are the terms of the contract enforceable? (terms concerning letting fee commission). I’m not aware of what the agency and the landlord signed concerning the lettings compensation.
Regardless of the possibility of moving because of my daughter issues, can I ask the landlord to have a break clause added to the contract NOW? The break clause would be concerning the ending of tenancy for professional matters (moving abroad). This is very important for us since my husband works in an international company and his company can ask him to work anywhere in the world. How can I ask and convince the landlord to add the break clause?
I read on another blog that a 3 year contract without a break clause is an unfair contract (unreasonably restrictive).
Looking forward to hearing from you soon.
I had probably better start by explaining that when you sign a tenancy agreement, this is a legally binding contract. Unlike in France, you do not have the right to end it early unless either there is a special clause in the tenancy allowing you to do this (a break clause) which is not the case here, or unless you are able to reach agreement with the landlord.
If he agrees to allow you to end the tenancy early, your landlord is entitled to be put in the position he would have been in had the contract continued as anticipated. Which is to be paid rent on a monthly basis for the full three year period of your contract. Without the expense of getting in new tenants.
It is unfortunate that your daughter is unhappy at her school, but this is not the landlord’s fault. He has also explained that one of the reasons why you were chosen as a tenant over the other applicants, is because you wanted a three-year term.
Under the law as it is at present, a landlord is under no duty to ‘mitigate his losses’ and find a replacement tenant if you want to leave early. He is quite entitled to insist on his legal right to be paid the rent, whether you are living there or not.
If a landlord agrees to find and let to a new tenant, then he is entitled to be paid any additional costs he is put to by this exercise. For example, the cost of finding and referencing the tenants, and the costs of getting a new inventory and tenancy agreement prepared. Because these are all things he is not liable to pay for under the terms of the contract you signed.
This is why if, to oblige you, he instructs his agents to find a new tenant, you will be held responsible for their fees. There is quite a lot of work involved in finding new tenants (and expenses too) and naturally the agents cannot be expected to do this work free of charge.
It is also why you would be liable for any loss suffered by the landlord if he re-lets at a lower rent. You contracted to pay rent of £3000 pm until June 2018. So if the landlord is only able to re-let at £2,500 pm he can claim the difference of £500 pm from you. (In reality though this is unlikely to happen as property is scarce in London and rents are high).
So far as the commission is concerned, this was specially mentioned in the tenancy agreement although the amount of the commission was not. There may be an argument that you should not be held responsible for a fee which you were not fully informed about at the time you signed the tenancy. However, in that case, the landlord (or the agents on his behalf) can simply refuse to agree to end the tenancy early as he would then be out of pocket.
Probably the best solution would be for your daughter either to move to another school or put up with the travelling, so you can remain in the property until the end of the term. If you move out early it is going to be expensive for you.
One way to reduce the cost would be to try to find a replacement tenant yourself – if no agents fees are incurred in looking for a new tenant this is not something that can be charged to you. However, you would still be responsible for the costs of referencing any new tenants you find and for any other reasonable expenses involved.
I would also suggest that, before proceeding further, you make sure that you will be able to find somewhere in Wembley to go to. There is a housing shortage in London.
Answers to your specific questions
As discussed above, you can only end the tenancy early with the consent of the landlord. He is entitled to make this conditional upon you paying any costs incurred by him. This is not unreasonable. You were chosen over other potential tenants because you said you wanted a three-year term. It is not the landlord’s fault that your daughter is unhappy at her school.
I would add here that although you are French and don’t understand English law, this is not the landlord or agent’s fault either. You are adult professional people and were aware that you were renting in a foreign country where the rules are different. You could easily have obtained legal advice or at least done some research on the internet.
In England you are assumed to know and understand the law – even if you don’t. Otherwise, it would be impossible to have a legal system as everyone would try to avoid its consequences by saying they didn’t understand it!
You are not entitled to ask the landlord to retrospectively amend the contract and insert a break clause now. This is something you should have asked for before you signed. Although, had you done this, it is possible that you would not have been chosen to be the tenant.
Neither is a three-year tenancy agreement term unfair and restrictive. Indeed, many tenants organisations are highly critical of the fact that most landlords DON’T give long tenancies, meaning tenants are at risk of being evicted at fairly short notice sometimes having only lived in the property 6 months. Many families with children at school are very worried about this. You on the other hand, are entitled to stay until 2018.
I think you ought to re-consider and see if you can remain in the property.
If not, and you decide to go ahead, it will be expensive. You can however, reduce the letting agents fees by finding a suitable replacement tenant yourself.