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Replacing tenants

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Things change, people change and every free person's life is their own. However happy or perfect your living arrangements are at the start of a tenancy period, it is possible that this situation ceases to be the case at some point before you are due to move out. It might be something as simple as a member of the household getting a new job in a new area, or it may be as sinister as an evil plot to oust one of the housemates using coded messages written on small pieces of paper using mascara or chalk.

It is rare for a situation to arise where the landlord or agent refuses to allow the remaining tenants to replace someone who wants to leave or who has left, especially if your residency has gone smoothly up to that point. If you have been complete nightmares and have really rubbed the landlord up the wrong way, he or she might refuse just to be awkward, but this is likely to antagonise you even more and get you to do something really bad

Through a lettings agent.
Normally, if one or more of the existing tenants wishes to arrange a replacement tenant or tenants, there is a set formal procedure and fixed costs involved. The procedure must be fully complied with and all costs paid before prospective tenants will be allowed to move in. Lettings agents will normally be quite strict about these procedures.

Basically, the procedures are in place to ensure that the new tenant that will replace the existing resident is of suitable quality from the landlord or agent's point of view. They will have to go through the same sort of checks that you went through.

Sometimes there will be provision in the tenancy agreement for procedures that deal with the replacement of a tenant. If there is not, the agent will need to get agreement in principle of the landlord that will allow one contract to be broken and a new one set up.

Either way, the introduction of a new tenant will require a new tenancy agreement. Existing tenants will have to sign a surrender of the original agreement to acknowledge the fact that it is no longer in place. The remaining tenants and any new arrivals will then have to sign a new agreement for the remaining duration of the original term. At this point, the term can be extended beyond the end date of the original agreement if everyone agrees.

The prospective tenant will have to fill out a tenancy application form, undergo a reference and maybe credit or guarantor checks, depending on their individual circumstances and the practices or policies of the lettings agent.

Lettings agents have a habit of charging for things like this. It is easy money - a replacement tenant fee can be over £200. Unlike administration fees involved at the original sign up, this is usually non negotiable as they have you over a barrel somewhat. If you don't agree to the fee, the tenant is refused and you all become liable for the full rent on the property.

The fee is supposed to cover things like:

  • Obtaining the landlord's permission to replace tenants
  • Preparing the new lease agreement
  • Arranging for the old tenants to surrender the original lease
  • Staff costs
  • Additional costs of extending the agreement period
  • Overheads such as computers, phone, fax, accounting, insurances, office costs etc
  • Abortive costs - these are costs incurred by the application such as credit checks, taking up references etc

Each tenant will need to sign the surrender of the original agreement and sign the new tenancy agreement. Once all tenants have signed both agreements, the landlord will sign the new agreement, or the property manager will sign as an agent acting on the landlord's behalf. The new tenant is then free to move in.

When replacing a tenant, the new tenant takes on all obligations owing by the tenant they are replacing. This includes the deposit paid initially by the outgoing tenant and any rent still owed by the outgoing tenant. The new and old tenants therefore have to make their own arrangements to satisfy themselves on this sort of thing.

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