Here is a question to the blog clinic from Sue who is a tenant
We would like to end a 2 year fixed AST, 12 months in (no break clause) due to an unexpected, upcoming move for work to Asia.
We immediately agreed in writing to remain responsible for rental payments until new tenants were found. Also to pay a re-letting fee of almost £ 800.00.
However two weeks into marketing the landlord has turned down two lots of replacement tenants, who were willing to sign an 18 month and 24 month fixed term agreement respectively. Subsequently adding the following clause to the website ‘Six month tenancy only”
Initially there was a lot of interest as rental properties around this area are snapped up quickly, we didn’t anticipate any problem. However since the addition of the six month clause we have had two viewings cancelled and to date no further interest in the property.
We strongly believe the landlord’s intention is to sell and not to re-let.
There is a For Sale board outside the house, but no To Let sign. Several sales viewings have also taken place.
We questioned the landlord’s intentions and we were told that both options would be marketed simultaneously “we will go with whatever comes along first” was the reply.
This is obviously not the case as serious tenants were rejected and chances of finding new tenants are now greatly reduced due to this restrictive clause.
We now feel that the goalposts have been moved and this imposes an unfair financial burden on us.
Finally we decided to ask the the landlord to accept our surrender (considering that rejection of potential tenants could go on forever) and received the following answer:
“In answer to your question re the landlords accepting the surrender of the tenancy at the end of November – I am sorry but this is not something they will agree to unless they do get a purchaser”
Do we have any rights at all here?
We were wondering if the following applies:
“penalty clauses are designed to compensate the landlord for their loss, with the view to putting them back to their original position”
…rather than putting them in a position they would like or prefer to be in, which feels akin to profiting from our breach!
I have some good news and some bad news Sue. Lets have the bad news first.
The bad news
Tenants do not have any right to end their tenancy early – and the landlord is under no obligation to ‘mitigate his losses’ if a tenant moves out early.
By signing the tenancy agreement you are making yourself liable for rent (on a month by month basis or whatever) for the fixed term period.
So the landlord is technically within his rights to refuse to co-operate.
The good news
There is a bit of light on the horizon however.
One way for a tenant to ‘get out’ of a tenancy is to assign it to someone else. Landlords will not normally want this as they prefer to choose who is in their property. So tenancy agreements invariably prohibit assignment.
The Office of Fair Trading (whose function has now been taken over by the Competitions and Markets Authority (CMA)) published some guidance on Unfair Terms in tenancy agreements in 2005.
In this guidance the OFT stat (Group 18(d) on p55)
Our concerns arise only where contract terms allow landlords to refuse to accept the early surrender of fixed term agreements and insist that tenants pay rent for the whole of the period of the tenancy.
If tenants need to leave, it is not fair for them to be bound to pay rent if another suitable person is willing and able to do so.
For this reason we consider that, in fixed term tenancies, an absolute ban on both assignment and subletting may be considered unfair.
So you need to take a look at your tenancy agreement and see what it says about assignment. If there is an outright prohibition and no other ‘get out’ clause anywhere in the agreement, it is possible that, as per the OFT Guidance, the prohibition may be unenforceable.
So what you need to do is
- find a tenant who is willing to take over the rest of your tenancy (don’t wait for your landlord to do this as clearly he won’t – and actually he does not have to)
- contact the landlord and ask them to sign up the new tenant
- If he refuses unreasonably then say that in the circumstances you consider that the prohibition against assignment is void and that you are entitled to assign this tenancy
See what happens. Hopefully the landlord will then agree.
If not see about going ahead with an assignment. However I suggest you take some legal advice from solicitors at that time, who could deal with the assignment paperwork for you.
As regards the last part of your question – this question is not about a penalty clause. This is about whether you are entitled to end the tenancy or not!