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Added penalty clause in lease agreement to prevent holdover

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Author Topic: Added penalty clause in lease agreement to prevent holdover  (Read 317 times)
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« on: May 08, 2021, 10:18:04 PM »

Hi,

I plan to let out a property for two months and want to make sure the potential tenant to move out at end of the contract. I've signed contract that another tenant will move in after the 2 month period.

I'm thinking of add a clause in the lease agreement that states:  if the tenant doesn't move out on the agreed date, he and I will automatically enter into a 12-month new contract that double the current rent. The rent is payable upfront.

Is this clause legal and forcible ?

If not legal,  what's the best option that I can put into the contract to prevent holdover tenant?


Thank you very much for your advice!!!

James
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« Reply #1 on: May 09, 2021, 09:52:01 AM »

No,you can put whatever you like in a contract,but that will not override the laws relating to tenancies.Why are you only wanting to let it for two months? If this is your first time as a landlord you need to brace yourself for the realities of life.I am also puzzled about why you would require a tenant who is paying rent and keeping the place in reasonable shape to move out at the end of the lease? The idea that you can have a tidy swap of tenants on a set date is doomed to fail for so many reasons,likewise the idea of imposing a system of fines in the form of rent increases. Time for a big rethink,being a landlord is now a very regulated and serious responsibility to take on. You have got some odd ideas.
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« Reply #2 on: May 09, 2021, 10:27:40 AM »

The minimum term for an AST is 6 months.

So under what vehicle are you intending to let a property out for 2 months? You might be alright... I suppose... if it's something different that I don't understand... like a holiday let or something? I mean, you let a cottage out for a week... you don't expect the 'Tenants' to just stay on after the week... so I guess there must be mechanisms in place in that space for stopping them... I'm thinking it's usually an unattractively high 'rent' to begin with? I don't do holiday lets, so I don't know, but I presume a cottage in the Lake District isn't let out on a holiday let basis for the seem pro rata rates as a property on an AST.
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« Reply #3 on: May 09, 2021, 11:24:33 AM »

Thank for the reply.

I think there is no minimum period for an AST. It can be 6 month or less.

We have signed a contract that starts in this October.   The property is vacant from now to Oct. I'd like to find a tenant that can fill the void period between now and Oct,  but need to make sure that potential tenant moves out before Oct so that it won't ruin the contract that starts in Oct.

So I'd like some  legal advice that prevent holdover, for instance, 
1) penalty per day if the tenant fails to moving out date after the contract end, or similar sort of things.  or
2) automatically enter into a long period contract with unattractively high 'rent'.
 

Any advice will be appreciated. Thank you.

Regards

J
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« Reply #4 on: May 09, 2021, 11:34:47 AM »

Rent it out on AirBnB or similar in the mean time.
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« Reply #5 on: May 09, 2021, 01:19:21 PM »

I've got someone who want to rent the property for 2 months. I'd now like to enhance the contract to deter him from overstay.
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« Reply #6 on: May 09, 2021, 05:59:36 PM »

Again there is no magic formula that can ensure this happens.Most people will be honest and cooperative,but there have been queries on here from distraught landlords who have allowed a "friend" to stay in their property for a short time to help them in a crisis,only to end up with huge legal bills and trashed houses.That is without a single scrap of paper being signed.Hippogriff told me way back that being a landlord is a people business,and when it comes down to it,he is right.You take a risk every time you let out your property.
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« Reply #7 on: May 09, 2021, 09:19:57 PM »

You can write something into your tenancy agreement. Nothing stops you. Your query is whether it's legal and, much more importantly, enforceable.

What you're trying to achieve, I think, is the idea of means profits... or you being compensated for being the victim of trespass. I think you could search case law to see if something like this has been successfully depended upon in recent times... I think the law is quite archaic, which doesn't make it workable. Your biggest worry would be about what happens to the October incoming Tenant if you don't have a property for them.

I think the AirBnB idea is a good one. A colleague at work has spent most of the last year in 3 or 4 different AirBnB locations... each for at least multi-week periods. They have established processes - "If you stay past checkout, the Host has the right to make you leave in a manner consistent with applicable law, including by imposing reasonable overstay penalties." - you'd need to find out what they were.
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