My tenant wants to leave. Do I have to refund his rent.

31 03 2010

Q

A landlord of ours has a tenant on a contract which runs out in 6 months time, he has paid 3 months in advance. However, he is moving to another area for personal reasons, and cannot afford to pay rent at his new location as well as the existing one. Our landlord is confident that we can get his house filled within a month or so. The landlord asked us if he could keep the 3 months rent if he re-lets to another tenant. The tenant has requested that the landlord say in writing that he will accept the 3 months advance as final payment and not persue him further.

A

The landlord has no obligation to surrender the tenancy, and therefore he could force the tenant to pay the remaining 3 months rent when due. It is also worth noting, he cannot charge double rent. So if he does move in a new tenant he will have to refund the current one.

It might make most sense for the landlord to force the current tenant to stay, however, there are two points of thought here:

If the current tenant can’t afford to pay, the landlord may have to go through the courts, which is always going to be time-consuming and risky.

It is always worth being good to your tenants, because you never know how far word of mouth might spread, and having a tenant who does not like you staying in your property can often cause headaches.

My advice would be to tell the tenant that you will surrender the contract once you have secured a new tenant, and that he will still have to be liable for the rent up until the point that the new tenant becomes liable for it. This may well mean the current tenant getting a refund.

However, the current tenant must understand that if the landlord is unable to find a new tenant he will still be liable for the rent for the remaining 3 months of the contract.

If the landlord is confident of finding a new tenant then this solution is best for everyone involved. The landlord may wish to make the tenant pay any fees associated with re-letting the property, or perhaps a pro-rated portion of this re-letting fee based on how much of the tenancy the tenant has already had.

This is negotiable of course, so it is best to come to some arrangement that both party is happy with.

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