Here is a question to the blog clinic fast track from Mike who is a landlord.
I have a flat let on AST to two sharers on joint and several terms – they share rental payments equally. One of the parties is leaving and I have received a notice to quit from each with the same expiry date.
Although she has served notice, the second party would like to stay on and is looking for a new sharer. I hope she is able to do so so that a new tenancy can start immediately after the expiry of the current one, but what would be the position if she is unable to find someone in time?
The party who wishes to remain has been at the flat for around 5 years and has been an excellent tenant in every way, so that I would like to assist her if possible. Is there any device to enable her to stay on for a brief period beyond the termination date so that she can continue to look for a sharer. I would be prepared to do this for a brief period provided a new tenancy is not created.
A bit of a tricky one. Although your tenants’ notices to quit will end the tenancy at the end of the notice period, this does not mean you are entitled to immediate possession. As with most residential occupiers (whether they have a tenancy or not), you have to get a court order first. The fact that your tenants have served notice to quit though will (subject to what I say below) mean that you will be entitled to one if you need it.
Be aware though that in the meantime, if you accept rent from the tenant, then that will usually mean that a new tenancy will be created (s54(2) Law of Property Act 1925). Although you may be able to get around that by making sure that you have it in writing that any payment received is accepted as mesne profits only and without any intention to create a new tenancy.
There is also this very old rule under the Distress for Rent Act 1737 which says that if a tenant stays on after serving a tenant’s notice to quit, you are entitled to double rent.
Come to think of it, I am not entirely sure whether the acceptance of the double rent under the Distress for Rent Act will not create a new tenancy – but if it does it will be one subject to the double rent, so not really one the tenant will wish to continue overlong!
As to what you should do, here are some
- Allow her to stay on (not that you have any choice about the matter if she refuses to move out!) under the default situation which will be that she is liable for double rent under the Distress for Rent Act.
- Sign her up for a new tenancy at the previous rent as a sole tenant and allow her to take in one lodger – on the understanding that at renewal the lodger can be upgraded to a tenant. You could also perhaps say that if she is unable to find a lodger you will allow her to break the tenancy and leave early.
- Sign her up for a new tenancy at the previous rent but give her one month at a special low rent to allow her time to find a sharer and then either do a new joint tenancy agreement when the sharer is found or allow her to take the sharer in as her lodger as above
- Agree to allow her to stay on without any new tenancy agreement on the basis that she will pay half rent (on a mesne profit basis so you do not create a tenancy) for a limited period of time after which if she has not found anyone you will require her to vacate.
So far as the lodger option is concerned, landlords often get very upset about this and are dead against it.
However you need to bear in mind that someone who has been a model tenant (as this one has) for over five years is hardly going to suddenly go mad, divide up all the rooms and sublet to 15 illegal immigrants! Particularly as she will still be living there. She will want someone nice she can share with.
You need to be clear that she can only have ONE lodger, as if she takes any more the property will be deemed to be an HMO (which you probably don’t want). Your tenancy agreement should also make it clear that she will be liable for any damage done by her lodger, and visitors (all tenancy agreements should have something like this anyway).
Advantages of the lodger option though are:
- The tenant is responsible for finding and checking the lodger (ie not you) – and remains liable to you for the whole rent whether the lodger is there or not
- Any right to rent checks are the responsibility of your tenant not you! (Because you will not be the lodgers landlord – she will)
- If the lodger proves unsatisfactory she can leave and the tenant can find a replacement without you having to do anything or sign a new tenancy agreement – the tenant will continue on the same basis and remain responsible for the whole rent
However the lodger option should only be taken with a good tenant who you trust.
The most important thing though is that this is a good tenant. So hopefully she will be reasonable and you will be able to work something out. Legal rules and occupation rights only really become important if relations break down and you have to go to court. But still, it pays to take care!
Hopefully this article will help you do this.