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crapstones

Renewal Of Ast At The Same Time As Possibly Purchasing A House

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My 12 months fixed-term AST is due for renewal in mid September and the letting agency has asked me if I want to renew however I've put in an offer on a house which has been accepted, though I don't know how long it would be before things were complete and I moved in, and of course things could always go pear shaped. Because it's still early days and there's no exchange of contracts yet, and because I don't want to become homeless in September, I really don't mind paying the £88 tenancy renewal as a safety net which is pittance compared to the deposit and legal fees I'm going to be paying if things go smoothly.

I've already asked the letting agency to renew the AST when they asked if I wanted to renew it, prior to finding this house and making the offer, again because although I was looking I'd not found anything and didn't want to be homeless.

The letting agent has only offered fixed term AST agreements in the past.

I've been in the property for 6 years and have had therefore 6 times 12 month AST agreements.

How should I approach the situation with the letting agency though? I'd sooner tell them the situation upfront and let them know I don't mind paying the renewal fee however I might leave it late to return the signed new AST agreement to them if things go pear shaped, and also say that if things go okay then I don't mind paying the renewal fee anyway but won't be signing a new AST so they can have the keys back.

Is this okay?

The previous AST says I'm responsible until a replacement tenant has been found, and I imagine the new one which I've not had to sign yet would say the same. The previous agreement also says that there is a charge equal to one month's rent plus VAT for leaving early, and they need half of this fee when I confirm my intention to surrender the tenancy and the remainder once the property has been re-let.

There would be no issue in re-letting the property as it's in a fairly popular area and I'm happy for the letting agency to use a professional cleaner out of my deposit since it saves my time so I can get on with moving and sorting things out.

Obviously my priorities are that I don't become homeless in late September and I don't end up paying a mortgage and rent for longer than one calendar month.

I just wondered what the general advice is for this situation.

Thanks.

Edited by crapstones

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My 12 months fixed-term AST is due for renewal in mid September and the letting agency has asked me if I want to renew however I've put in an offer on a house which has been accepted, though I don't know how long it would be before things were complete and I moved in, and of course things could always go pear shaped. Because it's still early days and there's no exchange of contracts yet, and because I don't want to become homeless in September, I really don't mind paying the £88 tenancy renewal as a safety net which is pittance compared to the deposit and legal fees I'm going to be paying if things go smoothly.

You don't new to pay a renewal fee or sign a new agreement - the tenancy will automatically go to a rolling contract if you don't sign a new one which will be 1 month's notice for you and 2 months for the LL. (I assume you are in England or Wales). The whole renewal fee thing is a scam playing on tenants' ignorance of the law.

Either

Send them a letter saying that under the law you can move to a rolling contract in September so that is what you will be doing. Given that there is no paperwork involved in this, there is no need for them to trouble themselves by sending you an invoice for the £88 and no need for you to pay.

Or

Ask the LA for the LL's contact details (which they need to give you by law). Explain situation to LL, come to an agreement.

I'd be surprised in this climate the LL wants a pissed off tenant and a void.

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I don't disagree with any of your advise. But don't LLs often just issue a Section 21 to stop the AST converting to a rolling contract (statutory periodic I think is the term) and so tie the tenant into another 6 or 12 month term ... and the EA can make some charges.

Yes they do. Have you been issued a Section 21? Is your LL intending to do so? Why don't you talk to your LL? Don't let the EA/LA come in between you and the LL, just bypass them. They will play ball in the end, to do otherwise would mean losing their cut.

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I don't disagree with any of your advise. But don't LLs often just issue a Section 21 to stop the AST converting to a rolling contract (statutory periodic I think is the term) and so tie the tenant into another 6 or 12 month term ... and the EA can make some charges.

You are sort of right. They issue the S21 to try to fool the tenant into thinking it wont convert to a rolling contract, still converts just means they can start proceedings for possession.

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12 month AST, LL issues S21 after say one month, at 10 months in to AST, LL says do you want new AST and the rent has gone up. Yes the AST goes to rolling contract but the tenant is under pressure as they could be homeless (OK the LL could have a void). The S21 is just used by the LL to force the tenant into signing a new AST - or the tenant can take a risk and hope that it will convert and the S21 will not be enacted so the LL can get more rent....

in summary the S21 is used as a weapon by the LL to pressure the tenant.

But it will fail completely if the tenant knows that he doesn't want to sign up for another fixed term.

It has to be better to put your stuff in store and move in with a relative for a few weeks in the OP's situation (if the LL won't let the tenancy go periodic)

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Thanks for the replies.

I had thought about storage and finding somewhere temporary but unfortunately all my relatives are in other more distant parts of the UK and none of the friends I have locally would be able to let me sofa surf even for a short period of time. The letting agent does this renewal of the tenancy agreement every year and I have to sign a new agreement, and both myself and the landlord end up paying a fee to the them for this! I'm not aware of being served a section 21 notice at any time, neither at the start to take effect later, nor just before the agreement ran out.

I'd also contact Shelter and CAB for their advice. CAB have yet to respond but Shelter have.

Their advice covered the same ground as the replies here, that unless a section 21 was issued then if I don't sign the new agreement than the old one reverts to a periodic assured short hold tenancy meaning it rolls on a month-by-month basis automatically. If the landlord or letting agent wouldn't be happy with this situation then they'd have serve the section 21, giving a two month notice period.

Their advice was to negotiate with the letting agents, explaining the situation, but that I may like to leave this as long as possible to avoid being served a notice to quit within the fixed term period. They also advised that outside of a fixed period there would be no extra charges or contractual fees to pay.

I will be writing both the landlord and letting agency sometime in the future to outline the situation and ask if they would be accommodating.

Thanks all who replied.

Edited by crapstones

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The letting agent does this renewal of the tenancy agreement every year and I have to sign a new agreement, and both myself and the landlord end up paying a fee to the them for this!

I will be writing both the landlord and letting agency sometime in the future to outline the situation and ask if they would be accommodating.

Thanks all who replied.

So the LA is diddling you and the LL! Just contact the LL, am sure LL would not be happy to know there is an excess charge being levied that is totally unnecessary.

Best of luck!

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So the LA is diddling you and the LL! Just contact the LL, am sure LL would not be happy to know there is an excess charge being levied that is totally unnecessary.

Best of luck!

we had this for 10 years...annual renewals, the demand for insurance and the sales pitch....coming to this website changed all that and Ive saved a packet.

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Here's an update on the situation: I wrote to both the landlord and letting agency telling them of my house purchase and asking if I could let the tenancy automatically change to a periodic AST by not signing the tenancy renewal (no Section 21 had been issued). I had a phone call from the letting agent after they'd received my letter where they told me that they'd spoken to the landlord.

The letting agent told me that they don't do periodic tenancies, but they were happy to send me out a replacement page 15 of the new 12-month tenancy agreement to sign which includes an additional paragraph saying:

"It is mutually agreed between the landlord and tenant that this tenancy may be brought to an end by either party giving two calendar months written notice to the Property Manager."

Although personally I'd like it to be one month's notice on my part and two months notice on theirs this does seem to be a reasonable solution.

The women from the letting agency said on the phone that they'd add this and I wouldn't have to pay any early surrender charges, but of course I would be liable for two months rent unless they had a replacement tenant in sooner after I'd moved out.

One thing that does concern me is that on the reverse of the new page with this new break-clause on it, there is the old "terminating your tenancy early" page to sign where it says "This request confirms that you accept responsibility for our charges. These will be equal to one month's rent plus VAT. Half of this fee is payable when you confirm your intention to surrender your Tenancy and the remainder once the property has been re-let. The fee is non-refundable."

I'm guessing that the new break-clause with two months notice would override the penalty clause, and that the penalty clause would only apply if I only gave a months notice.

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One thing that does concern me is that on the reverse of the new page with this new break-clause on it, there is the old "terminating your tenancy early" page to sign where it says "This request confirms that you accept responsibility for our charges. These will be equal to one month's rent plus VAT. Half of this fee is payable when you confirm your intention to surrender your Tenancy and the remainder once the property has been re-let. The fee is non-refundable."

I'm guessing that the new break-clause with two months notice would override the penalty clause, and that the penalty clause would only apply if I only gave a months notice.

Even if you're satisfied with the break clause, I wouldn't guess that. Might be worth sending it back signed on the front only - could buy some more time while they consider resubmitting it to you for signature.

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The only new bit is the paragraph:

"It is mutually agreed between the landlord and tenant that this tenancy may be brought to an end by either party giving two calendar months written notice to the Property Manager."

The other bit I mentioned -

"terminating your tenancy early" page to sign where it says "This request confirms that you accept responsibility for our charges. These will be equal to one month's rent plus VAT. Half of this fee is payable when you confirm your intention to surrender your Tenancy and the remainder once the property has been re-let. The fee is non-refundable."

- has always been in the past agreements I've signed in previous years. Obviously this time I'm a bit more wary. Giving two months notice whilst not being as preferable to one months notice is manageable, particularly if they find new tenants quickly.

Assuming that I get to know the completion date a month in advance I'm probably only looking at one month where I have to pay a mortgage and rent, and perhaps if they get a replacement tenant in quickly I don't pay rent for that month.

Paying rent plus mortgage plus the early termination fee of another months rent seems excessive though. I'm going to e-mail the letting agent to nail down this point but the two months notice period break-clause on its own is an acceptable compromise between us.

Over the past 6 years I've paid just over £50k in rent (always on time by direct-debit) to the letting agent and landlords, plus the landlords live in what is either rent-free or subsidised accommodation tied to one of the landlord's employment, so I'm sure they can cover the mortgage payment if the property were vacant, plus they shouldn't have a problem finding new tenants.

Edited by crapstones

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