What do you do when a tenant lets you know that they want to break the lease and leave early?
Unless there’s a break clause in the tenancy agreement, technically you can just say no and insist they pay their rent until the end of the term.
However, the tenant could have a valid legal argument that as their landlord you should take measures to try to mitigate their loss if they want to break the lease.
In plain English, this means that you ought to try to re-let the property if possible to release the tenant from their financial obligation if they want to leave early. You can charge the tenant any out of pocket expenses, such as the cost of remarking the property, agency fees and the cost of drawing up a new tenancy agreement, but these mustn’t be more than the rent for the remainder of the term.
If you think you might be able to re-let the property, you should inform the tenant that you’ll do your best but make it clear to them that they will remain responsible for the property and for the rent until the end of the term if you are unable to do so.
Obviously there are several reasons why you might not be able to re-let the property. You might not be able to find a new tenant, you might not be available to organise viewings or there might be less than 6 months left on the tenancy agreement and as a new tenant would be entitled to a stay in a property for a minimum of 6 months it could be too risky for you to take a new tenant if you want the property back at the end of the term.
If you can’t re-let the property, explain your reasons to the tenant in writing.
If the tenant decides to leave early anyway and the property remains empty, you should make it clear to them that they will still be responsible for the property and for any bills, such as council tax and water rates, until the end of the term. You will also have to continue to behave as if the tenant is still living there, in other words, you mustn’t enter the property without notifying them unless you allow them to surrender their tenancy. If you do allow them to do this, you will be freeing them of any of their obligations under their lease and they will be giving up all rights to the property.
Alternatively, the tenant could try to sub-let the property, with your consent, so that they can leave early.
If you agree to this, the original tenant will become a mesne tenant and they will act as a landlord to the sub-tenant. The mesne tenant will remain responsible for paying the rent. They will also remain responsible for the property and its condition at the end of the tenancy.
Under this arrangement, your dealings as a landlord are with the original tenant, the mesne tenant, not the sub-tenant. If you’ve taken a deposit from the original tenant, you should keep hold of this until the end of the tenancy.
When you want to end the tenancy, you will need to notify the original tenant, the mesne tenant, and they will have to notify the sub-tenant. The sub-tenant must move out at the end of the lease, subject to you serving at least two months’ notice on the mesne tenant.
Problems with sub-letting
The original tenant might remain responsible for the rent and for the condition of the property, but make no mistake, it’s still your property and it isn’t desirable to have someone you’ve never met and haven’t credit-checked living there.
They might cause a considerable amount of damage, they might not pay the rent, they might refuse to leave at the end of the term. Although the original tenant will be responsible for any loss you incur, they might not be able to pay.
Getting rid of an undesirable sub-tenant isn’t easy, even if they have moved in behind your back.
A sub-tenant has the same rights at the original tenant. In other words, if you want to evict them, you will have to follow the correct legal eviction process.
For this reason, it is best to insist on seeing a credit check and references for the sub-tenant before agreeing to the let. You should also make sure the tenant has a legal right to live in the UK. Although the mesne tenant ought to be responsible for this, landlord’s have a legal duty to make sure that every adult living in their property – even those who aren’t paying them rent – has a Right to Rent.
Assigning a tenancy
You could agree to the tenant finding someone to take over the remainder of their tenancy. You might want to consider this option if there are only a few months left on the tenancy agreement and you don’t want to extend it beyond the end of the original term.
This might also be an option if the property is shared by several tenants.
When a tenant assigns their tenancy to someone else, the new tenant agrees to take on all the terms and conditions of the original tenancy agreement. The original tenant gives up all their rights over the property and they are released of any further responsibility.
To assign a tenancy, all parties must sign a Deed of Assignment and this must be witnessed. It must be signed by the landlord, the departing tenant, the new tenant and any tenants who are remaining in the property.
After the Deed has been signed, you should return any deposit to the original tenant and register any deposit you have taken from the new tenant and issue them with the Prescribed Information.
To be on the safe side, you should also issue the new tenant with a copy of the Gas Safety Record, the EPC and a copy of the Government’s How to Rent Guide.
Problems with assigning a tenancy
Aside from the hassle of the paperwork and the need to take and protect another deposit (which can involve realms of paperwork), once again you end up with a tenant you haven’t chosen. However, this time, the outgoing tenant can wash their hands of any responsibility for whoever has taken over their tenancy.
As the Deed of Assignment releases the original tenant from any further responsibility for the property and the rent, you should vet the new tenant yourself to make sure you’re happy with them before you agree to the assignment.
Also, make sure the Deed is signed. If it isn’t, the previous tenant still has rights under the old agreement and the new tenant might not have to comply with the terms of the original tenancy agreement.
As the new tenant will be moving in midway through the term, the property might no longer be in the same condition as at the start of the tenancy. The outgoing tenant might not have cleaned for months, they might have removed some furniture or broken something and, understandably, the new tenant might not realise they are responsible for this.
To be on the safe side, get the new tenant to sign a statement saying they accept the original inventory and the schedule of condition and that they will leave the property in the same condition as at the start of the tenancy.
*Please note, this site is run by experienced landlords, not lawyers and as such none of the information is intended as legal advice. If you are unsure of your situation, you are best advised to consult a qualified lawyer.*