November 27

What should you do if your tenant wants to terminate a tenancy agreement early?

How to benefit from an early leaver

The end date of a tenancy agreement is added to protect both you and the tenant:

  • It provides security of tenure for the tenant. Unless they break the conditions of their tenancy, they know they have a home until the tenancy end date at a minimum.
  • It provides security of rental income for you. The tenant is effectively locked in until the tenancy end date, so you know you should get paid rent every month without having to find new tenants.

But what if the tenant wants to leave early? What if their circumstances have changed and they need to move on?
In this article, you’ll learn why it might be good tactics to allow a tenant to leave early, and how you could even turn the situation to your advantage.

Why might your tenant want to leave before a tenancy end date?

It’s quite common that a tenant wants to leave their home and move on early. In most cases, it’s because of changed circumstances. The tenant has a new job in a new area, or the tenant’s family is going to grow larger by one new addition, or their marriage has broken down. Often, these tenants may have been your tenants for years.

What can you do if a tenant wants to leave early?

There are two courses of action you can take:

  1. You could say, “Bog off! You’re locked in for the next seven months, and there’s no way I’m going to let you return the keys early and drop me in it.” Hmmm… Perfectly within your rights, but not very charitable. Especially if the tenant has, up to now, been a great tenant.
  2. The second option is to let them leave early. Do so with some compromises, and help them to help you.

If you take action 1, you could be in for a lot of angst. Do you think your tenants will treat your property well if they have been forced to remain there against their will? Or do you think that you might find they have let Fido pee all over the living room carpet, allowed their kids to take chunks out of the bedroom walls, and forgotten to clean the house for the last two months of the tenancy?
You’ve heard ‘Hell hath no fury like a woman scorned’. Multiply that by 10, and you’ve got your upset tenant.
Our advice, then, is to let your tenant leave early but to manage the process effectively.

Reasons you should let a tenant leave when they want

If you stick to the letter of the tenancy agreement and force your tenant to stay to the bitter end, it’s probably not going to end well. They certainly won’t thank you for it. They’ll probably be difficult right back at you. Here are eight reasons why you should let a tenant leave early:

  1. Maintenance issues will probably increase, while you’ll probably be forced to wait for your rent. Your outgoings are on the rise, while your income is at risk.
  2. You can forget about the tenant allowing viewings towards the end of their tenancy. That’s going to increase a void period between tenancies, and cost you money.
  3. It’s not a big issue. You don’t need to get uptight about it. Find and vet a new tenant, and start a new long-term tenancy. You’d have to do this when the tenancy comes to an end anyway, so what’s the big issue?
  4. You could use this to your advantage. Your void period could be eliminated almost entirely. How about having one tenant move out and replaced by a new tenant in a couple of days? Entirely possible if you manage the situation effectively, and get your current tenant on board.
  5. It’s most unlikely that your tenant will want to leave tomorrow. Most will give at least a month’s notice. That’s plenty of time to find new tenants.
  6. If you force your tenant to stay put, it’s only going to end in tears. They’ll feel like a caged animal, and caged animals tend to bite.
  7. If you force a tenant to stay put, you increase the chance that they will leave the property without your consent. It is when things get messy – and I don’t just mean the state of your property. The likelihood is that they’ll leave owing rent, and you’ll have a costly court battle on your hands to recoup rent and damages. In the meantime, you’ll be out of pocket as you’ll need to pay out for a clean-up to prepare for a new tenant.
  8. It’s another opportunity to review the rent you charge. You may even be able to increase the rent to new tenants earlier than you had anticipated.

Do you want to put yourself through the hassle of forcing a tenant to stay? We don’t think so, and we don’t think you deserve the aggravation they could cause. Instead, work with the tenant and get them to help you as you help them.

Managing an early exit by a tenant

As we’ve said, it’s probable that your tenant has been on your property a long time. Now they want to leave half-way through the current tenancy agreement. It’s a bother, but one that you can turn to your advantage.
First, remind the tenant that the tenancy agreement does run for several more months. But tell them that you appreciate the relationship you’ve had with them, and the respect with which they’ve treated your property, so you’ll help them leave if they help you. A little give and take never do anyone any harm. Here are a few conditions you might negotiate in exchange for ending the tenancy early:

  • Keep the house presentable always, so that viewings can be conducted
  • Allow viewings while they are still living in the property
  • Payment of rent until new tenants have moved in (likely to be no more than two weeks)
  • Help towards marketing fees (which may be cheaper than they think)

These types of conditions are fair, and allow the tenant to move on early and get on with their life. It also helps you to find new tenants quickly, reducing void periods and keeping the rent rolling in seamlessly.

So, what’s the point of a tenancy agreement?

Ok, so you’re probably wondering what the point of a tenancy agreement is if we’re saying you should allow a tenant to move out early if they wish. But the end date is only one clause and is most commonly extended by entering a new contract. The other essential tenancy agreement terms and conditions remain intact, the ones that determine how a tenant acts towards your property and you.
Showing some humility towards your tenant will help you to compromise and cover your costs. It should help you to find a new tenant quickly, and ensure that any void period is kept to a minimum (or even eliminated almost entirely).
The point is that managed effectively, an early-leaving tenant could work to your advantage. All you need is a calm attitude, and a strategy to manage the challenge.
Contact one of the Ezytrac team today on +44  01522  503  717. We want you to maximise your buy-to-let profits through great investment property management and make your life easier, whatever your tenant throws at you!


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