Question

Break Clause for one tenant on a joint tenancy

by | 23 Jan 2017

Hi,

I have a group who wish to take a student 6-let of mine in Cardiff. However one of the tenants only wishes to live in the property until 31st Jan 2018 and the other 5 student tenants have agreed that after he vacates they will stays as a 5 (rather than get a substitute tenant) and pay the full monthly amount between them (so increase their standing orders to cover his portion of the rent).

How do I correctly reflect this in my tenancy agreement? I’d prefer to keep them on the same joint and several agreement but the outgoing tenant is studying law! and quite rightly wants it stated in the contract that after he leaves on 31/1/18 he is released from the contract. I will do an inspection of the property and his bedroom on the 1/2/18, and make sure he has returned his keys etc. He says he’s happy to wait until the end of the contract (after 30/6/18) for his deposit back. Would something along the lines of this be OK?

“On 31st January 2018, Tenant Mr XXXX XXXXX will vacate the property, and following a satisfactory inspection and no rent arrears, will be released from any further obligations under this contract. The five remaining tenants will pay the total rent due of £XXXX.XX per month between 1st February 2018 and 30th June 2018 and will amend their standing orders from £XXX per month to £XXX per month. An inspection of property and Mr XXXX XXXXX’s bedroom will be undertaken and any damage or arrears attributed to him will be noted and be demanded to be paid in full by 14th February 2018. The protected deposit will be administered by the landlord and the lead tenant at the end of this tenancy agreement after 30th June 2018.”

What do you think? Thanks as always! 🙂

Answer

4 Comments

  1. guildy

    As a general rule, I don’t think such an arrangement would be possible because it would in fact act as a surrender of the whole tenancy.

    However, the fact that there are more than four tenants may take this out of the general rule but it’s a bit complicated as to why and I want to run this past a colleague tomorrow before replying fully if that’s okay.

    • 1497

      Absolutely! Just to clarify, my student tenancies run on a 12 month fixed term from 1st July to 30th June. So he would be quitting within the fixed term. Or is it best to get the group to sign 2 contracts at the same time when I sign them up, one running from 1st July 2017 to 31st Jan 2018 with the 6 of them, and another contract from 1st Feb 2018 to 30th June 2018 with just the 5 of them on. (I’d need to get 2 x guarantor documents signed to cover the 5 on both tenancies I guess). My only nervousness is that the second contract would only be for 5 months, and although I send out section 21s that could cause an issue if they refused to move out on 1st July. However, the risk is low as I already have 3 of the 5 living at one of my other houses and they’re lovely tenants, and student tenants are great, they always move out! Hope this extra info helps! Lindsay.

  2. guildy

    The ideal would be to do the two tenancy method.

    That being said, we’ve been pondering this since it was posted and think your earlier proposal of a break clause for one should also be fine – but we’re not absolutely certain. It has a few legal complications which we can’t decide are relevant or not!

    Another option confirmed by my colleague would be to put it in the five names and make the sixth who’s leaving early a “permitted occupier”. That would be neat and simple because they can effectively come and go when they please as they are just a lodger with your consent. However, they may wish for greater security than that (although you would still need a court order even against the permitted occupier). Also, the permitted occupier wouldn’t be liable for rent.

    If you choose the break clause method, make sure he is named last in the list of tenants names. This is because in law, a tenancy is actually only held in the first four names shown on the tenancy. All further names are held in trust by the first four. We’re not sure if this will help the situation but we figure it’s more likely to be helpful than a hinderance.

    • 1497

      Thank you so much. I think I’m going to do the 2 tenancies. It’s nice and clean that way and not disputable. I’m sure the group will be happy with this and I’ll get separate guarantors for both tenancies.

      His main concern was that he is the only non-student in the group and so there is a council tax liability. He wanted to make sure that the tenancy agreement clearly reflected that he would not be living there after 31/1/18 so they wouldn’t come after him for Council Tax. I guess having the break clause in still leaves some ambiguity for the council to argue that he could still live there whereas a separate tenancy agreement ending on 31/1/18 would show he has no right to live there after this date.

      Thanks as always for your help! Lindsay

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