What to do if a tenant wants to leave early? If you’re asking this question, your tenant has probably already given you notice or at least enquired about end their tenancy agreement early.
So, what should you do? Do you let them leave early as a gesture of goodwill, or do you stick to the terms of the contract and insist the stay until the end of the minimum term?
Let’s take a look at the factors in play to help you decide what to do if a tenant wants to leave early…
Why Let A Tenant Leave Early?
Being a landlord is essentially the same as running a business. Rather than make decisions with your heart, you should make them with your head.
And that means the first thing to if a tenant wants to leave before the end of the contract is to clearly think about the pros and cons of them leaving.
Maintain A Good Relationship
One of the biggest plus points of allowing a tenant to leave early is that it helps you maintain a good relationship with them.
That means they are less likely to cause problems for you during the remainder of their time in the property, and more likely to leave the property in a good state of repair when they exit.
Find New Tenants
It’s also not as big a deal as you may think if your tenant wants to leave early. That’s because it gives you a chance to replace them at a reduced cost.
As part of agreeing to them ending their term early, you could ask that they allow viewings until they leave. You could also ask them to cover some of the costs of finding new tenants.
That means that them leaving early could actually be a good thing, especially as the new tenants will be likely to stay longer than the ones who want to leave.
No Missed Rent
What happens if you force a tenant to stay in your property against their will? There’s a chance they’ll stop paying rent.
Sure, that will be against the terms of their agreement and the debt would able to be chased through a legal process, but do you really need that stress?
Save yourself the hassle and allow your tenant to leave early on the condition they pay rent up until their leaving day.
It’s Often The ‘Right Thing To Do
We know we started this off by saying being a landlord is about making decisions with your head, rather than your heart, but that doesn’t mean you can’t show at least a little compassion.
If your tenants have been relatively trouble-free for you, or if they appear to have genuine reasons for wanting to leave early, allowing them to end the tenancy agreement early is not a bad thing to do.
Think about if you were in their position, would you feel it unfair to be forced to see out the agreement?
Why Force A Tenant To Stay Until The End Of The Term?
To make a balanced decision about what to do if a tenant wants to leave early, you need to consider the reasons why you would want to make them stay.
While there are some very clear reasons to let a tenant leave early, these are the reasons you may wish to ignore them and refuse the tenants request to leave early:
It’s A Legal Agreement
At the end of the day, a tenancy agreement is a legally binding document.
You put in a minimum term because you wanted one to help give you some security of knowing how long you’ll have a rental income before you may need to find a new tenant.
This security may have formed the basis for some of your decisions about how much to spend on the property. Therefore, you risk being out of pocket if a tenant leaves early.
Costs Of Replacing Tenants
Every time you need to find new tenants, there are costs to pay. These can include marketing costs, admin fees, and tenant referencing checks.
If every tenant left early, your property would quickly become unprofitable.
New Tenants Are Hard To Find
If you have had a particularly difficult time finding new tenants for your property, you may be reluctant to let them leave at all, let alone before their minimum term is up!
If you think finding new tenants will be difficult, you may want to refuse the request for a tenant to leave before the end of their minimum term.
So, What To Do If A Tenant Wants To Leave Early?
Ultimately a lot will depend on just how early the tenant is asking to leave. If they only moved in last week, you may feel a bit hard done by if they want to leave already.
However, if they are only looking to leave a month or so before the end of the term, you might be willing to take a more lenient view of the situation.
In most cases, the best thing you can do is allow the tenant to leave early, after all, the advantages tend to outweigh the disadvantages.
How Landlords Can Make The Most Of A Tenant Leaving Early
Once you have considered what to do if a tenant wants to leave early, you’ll want to make the most of the situation.
If your decision is to enforce the minimum term of the agreement, then you’ll need to take legal advice if the tenant doesn’t agree to stick to it.
However, if you have decided to allow the tenant to leave early, there are a few things you can do to make the most of the situation:
- Viewings – Make it a condition of the exit that the tenant allows all reasonable requests to show people around the property while they still live there, maximising your chances of having a new tenant ready and waiting when the current one leaves.
- Property Condition – Request that the existing tenant takes extra care to keep the property in good condition and presentable while viewings are taking place.
- Rental Income – Ask that the current tenants continue to pay rent until new ones are found, that will reduce your loss and make them more keen to abide by the previous two requests.
- Marketing Fees – It’s not unreasonable to agree to your tenant leaving early under the condition they agree to cover the fees to remarket your property to find new tenants.
- Rental Review – At any point when a tenant leaves, it’s a good opportunity for you to review the rent you charge to make sure you are maximising your income while remaining competitive.
So, when a tenant leaves early, you can use it as a way to replace them at a reduced cost and perhaps even as an opportunity to increase your rent earlier than expected.
This is what being a successful landlord is all about, taking advantages of opportunities whenever they arise.
How To End A Tenancy Agreement Early
Keep in mind that even if a tenant wants to leave before the end of the contract, there is still a proper legal process to go through.
Just because you are waiving the minimum term of the contract, doesn’t mean the rest of the contract no longer applies.
The key thing is to get everything in writing. Make sure you have a written record of your client requesting to end the agreement early and provide them with written confirmation you are happy to honour their request.
What’s The Point In A Tenancy Agreement?
We have mentioned several times in this article how allowing a tenant to leave early can actually be a good thing for you.
However, we understand that may make you question what the point in having a tenancy agreement is if you don’t enforce it.
It’s a fair question, but, you need to keep in mind we are only referring to one small part of the contract. The rest of the agreement is important for protecting both you and the tenant and should usually be enforced.
So, should you just remove minimum terms in future agreements? Probably not. Even if you never intend on enforcing them, they act as a guide for tenants and become something most will abide by.
Therefore, they still give you the benefit of some security of income. They also give you a stronger base for negotiation when a tenant does ask to end the contract early.
If you do decide to let your tenant leave early, now is a good time to also review how much deposit to ask tenants for. We also recommend reading our top 10 property investment tips to ensure you run your portfolio as efficiently as possible.
