Early termination fees

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Early termination fees

Postby jencast » Fri Dec 23, 2011 6:56 pm

What are some of the early termination fees usually deducted from a deposit? Certainly the obvious for damages, arrears,void periods, but are there any others? This is a 12 month asssured shorthold tenancy and the tenant gave appropriate notice but is still leaving 1 month early.
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Re: Early termination fees

Postby juliet » Tue Jan 03, 2012 12:28 am

What are the landlords’ options?

■Continue to enforce payments from the tenant, as the tenant is liable until the tenancy is legally terminated
■The tenant can provide a new tenant BUT the tenant has to be acceptable to you, the landlord. Until that time the tenant is completely liable
■The landlord may choose to break the tenancy by suggesting that a financial settlement be made i.e. if they owe 7 months – you will settle for 4 months
■The landlord can find a new tenant, and hold the tenant liable for the costs of finding the tenant (advertising, agency fees etc).
■If at any point the landlord approves the actions of the tenant vacating early, then they can legally stop paying the rent.
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Re: Early termination fees

Postby jencast » Thu Jan 05, 2012 10:18 pm

In writing, the tenant has said they don't intend to renew the tenancy and gave a notice to vacate 1 month early. Is this a notice of early termination? If the checkout inventory is done early, can I pass on the fees?
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Re: Early termination fees

Postby Conveyancer » Sat Jan 14, 2012 3:56 pm

Is the tenant purporting to serve notice to terminate before the fixed term ends?
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Re: Early termination fees

Postby jencast » Mon Jan 16, 2012 2:16 am

No they don't wish to terminate early, but they want to vacate early and continue to pay rent until the tenancy ends. They do wish the checkout inventory to be done earlier and I wanted to know if the fees could be deducted from the deposit.

In another scenario, if they gave written notice to vacate early and change their minds, could I hold them responsible for any expenses I incurred by signing a contract with a new tenant? Thanks for any guidance given.
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Re: Early termination fees

Postby Conveyancer » Tue Jan 17, 2012 9:49 pm

The following assumes that the tenancy agreement does not contain a tenant's break clause, that is a provision which allows the tenant to terminate the fixed term by notice.

A fixed term "ends when it ends". No notice is required to end it even if the tenancy agreement so provides. If a tenant purports to give a notice ending a fixed term, whether on its last day or at any other time, the notice is of no effect. Any statement by a tenant that he intends to leave on or before the fixed term ends or that he does not intend to renew the tenancy has no legal effect and cannot therefore be relied upon. If (no new tenancy having been agreed) the tenant under a fixed term AST stays on after it ends, then as a matter of law a statutory periodic tenancy arises and it is quite impossible for the parties to agree that it will not.

Despite the above, the parties can agree a surrender. The sure way is to do it by deed completed simultaneously with the tenant giving vacant possession. Situations may arise where there is deemed to be a surrender of a tenancy by operation of law. For that to happen there has to be a set of circumstances such that it would be inequitable for either party to insist that the tenancy has not come to an end.

If a tenant on a periodic tenancy gives a valid notice to quit that ends the tenancy on the day the notice expires. If he does not leave then you can claim damages for any loss. However, it is most unwise ever to agree to grant a tenancy to an incoming tenant before the outgoing tenant has given vacant possession.
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Re: Early termination fees

Postby jencast » Tue Jan 17, 2012 11:18 pm

Perhaps it is best then to serve them a Section 21 for possession once I receive a notice to terminate. I realize that I have to pay close attention to the expiration dates of the notice and tenancy agreements or these would be invalid, but sadly, I am losing faith in relying on tenants' words, if I am to protect my legal standing to gain back my property. I think too much protection has been given to tenants at the cost of good landlords which will only lead to an increase in rents. Thank you for your sage advice.
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Re: Early termination fees

Postby juliet » Wed Jan 18, 2012 9:40 pm

The problem with serving a notice is that they may just ignore it anyway. Our homeless section tells people to stay put if they have no-one to go, forcing landlords to go for a court order for possession. You can line a new tenant up, advising them that your current tenants are due to leave on x date, but then only sign them up once you have possession.
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Re: Early termination fees

Postby jencast » Thu Jan 19, 2012 1:12 am

Good point, thanks. This way may keep me from having to pay for the new tenants accomodations.
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Re: Early termination fees

Postby juliet » Thu Jan 19, 2012 8:37 pm

Sorry - you probably guessed that I meant no where to go... :)
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