UK Landlord Forum / Life

Hi, my tenant is asking to terminate their lease early as they are buying a house, it is a 12 month fixed term contact ending in December. They first flagged this in February and have been pushing for an answer. An initial offer of covering all costs of reletting was made, however after careful thought I have now decided to sell the property.

I've offered to halve the rent when they vacate but they shpuld continue paying rent until the earlier of the lease end date or sale of the property. They have confirmed the completion date for their purchase is in May.

They've rejected my offer on the basis it may take too long to sell and that it's not yet on the market. Their counter offer is to pay a lump sum equivalent to 3 months rent to effectively terminate the lease.

I want to ensure I'm not out of pocket whilst I sell the property so believe my offer is reasonable, they disagree and feel they have a case in the event of litigation.

Any advice from fellow landlords would be welcome.

Actually - you could've just insisted the pay all rent and upkeep costs for the duration of the fixed term... that's the whole idea of a fixed term - it's a vehicle to give both sides of the agreement the security they, obviously, desire. The fact that one party now wants to break that agreement is unfortunate... and there is no way you should lose-out. All that said, however, while there may be a case for litigation and you could dig your heels in and "take it all the way" I feel this is likely bluff-and-bluster... and, on the face of it, you have outgoing Tenants who aren't just looking to scarper.

They've made an offer of 3 months rent. That doesn't mean it's their final offer. If you added 1 more to that... it might make you feel more comfortable and could be a viable desirable alternative to them raising some kind of Case against you?

What you both get here is a number that is certain. Either of you could win. Either of you could lose. Your idea about a moving timeframe wouldn't be appealing because of its uncertainty... so my first suggestion would be that you start to talk in absolute numbers that aren't related to events... then at least you're on the same page.

In my mind... I prefer the pragmatic approach. You obviously never want people in your property who don't want to be in your property. I'd push on the door a little bit... you must know the numbers that work for you? I think I'd go back and suggest something more than 3 months... maybe 4 expecting it to be rejected... then settle on 3.5... it's a gamble. But you could win heavily too. And everyone gets to wash their hands of the situation.

What I love about this, though, is the fact they've confirmed a Completion Date. Wonderful for them. If you'd said to them - "fine, the tenancy ends exactly on that date, we both agree" - and then Completion didn't happen (for whatever reason) - then guess who'd be coming to you, begging you not to kick then out into the street?

It seems odd that they signed up to a twelve month fixed term if they had even the vaguest notion of buying somewhere in the near future. The current restrictions on Section 21 would effectively give them a rolling six months' security whilst they, on the other hand, could end the tenancy at a month's notice. I think it's worth bearing that in mind if you're feeling hard done by.

Looking on the bright side, your tenants have given you the opportunity to sell up with vacant possession, in a surprisingly buoyant market, before the stamp duty holiday ends (if that affects you). Are they amenable to your marketing the property immediately? If so, their assistance with allowing viewings and making the place presentable could be worth more to you than a couple of months' rent.