Sharing Tenants need to Think Ahead!
It`s so nice to be asked to do something proactive for a group of tenants renting a shared house on a long term let. To be honest it is rare to find tenants, whether friends or not, who plan for the upheaval of one of their group leaving. There are seven major things to consider and if everyone understands the issues and how they will be resolved, at the start of the tenancy then it makes life a lot easier for everyone involved:
- The overall rent needs to continue to be paid in full, which means the remaining tenants having to cover the lost rent from the vacating tenant. Alternatively, the vacating tenant has to keep paying his/her share until a new replacement tenant is found.
- The deposit share can either be released when the tenant leaves and the incoming tenant replaces it; or the incoming tenant just pays the new share to the vacating person leaving the original deposit remains untouched. It is advisable to have an agreed lead tenant who will be responsible for communicating with the deposit scheme as this provides a conduit for ease of administration; enabling the scheme to obtain quick responses from all parties in order to reach an agreement for a partial deposit release. In either scenario, the deposit scheme must be told of the change in names so the deposit is re-registered in the correct names.
- In tandem with the deposit release is the agreed check out procedure. Who is doing the inspection for damage and cleanliness and how will it be decided? ALL parties (remaining tenants, vacating and incoming tenant) must be happy about the condition of the room/property being left and taken over so there can be no future debate over any future costings.
- Utilities can be a bugbear, because to be fair on the incoming tenant, the meter readings need to be taken on the day of changeover and the outgoing tenant must agree to pay his/her share, so there is no outstanding debt for the incoming person.
- It is worth thinking about partners and whether firstly they are allowed by the landlord and if so how do the other parties in the property feel about another person in the mix – if a new person lives there full time; the landlord would need to be informed and a Right to Rent Check undertaken.
- Rental increases over a long term tenancy are to be expected and all parties need to be aware of their impact. Does the initial rental pro rata spilt remain or have circumstances in the property changed, therefor requiring a re-adjustment of the amount each party pays so that the split is fairer.
- If the property is unfurnished and one of the group is providing the majority of the furniture, how will the other parties re-furnish if that person wants to leave. Similarly if all parties have provided some communal furniture how will the others be affected when someone wants to leave.
Having communicated these potential issues of concern to the parties, it was agreed that an Agreement of Mutual Understanding would be drawn up that all initial parties could agree to and sign. This would form a blueprint for any departing or replacement tenants joining in the future and make it easier for both the tenants and the landlord if there is a major dispute! Whilst this is a signed document, it needs to be understood it could be difficult to enforce if the leaving party just “ups and leaves”! If any landlords or tenants needs any further advice on this potentially complicated matter please contact me.