What to do if one contract-holder leaves your property

When you have more than one contract-holder in your dwelling – whether that’s a couple, two or more friends, or an HMO house share – there’s always the possibility that one of them might leave. A couple may split up, friends might fall out or their financial or other personal circumstances could change during the occupation contract, meaning the dwelling is simply no longer suitable or affordable.

While some contract-holders will (and should) keep landlords and their agent informed, with the stresses that life throws at people, this doesn’t always happen, so it’s important to have excellent contract-holder referencing at the start of a occupation contract and period checks on both the dwelling and your contract-holders, so any problems are picked up early. If we are managing your dwelling for you, we will do all we can to pick up on any potential issues between contract-holders.

But whenever it comes to yours, or our attention that a contract-holder is leaving or has already left, there are a number of steps that are required.

Reassess affordability

On a joint occupation contract agreement, it’s common for the contract-holders to be ‘jointly and severally’ liable for the rent. That means if one or more of them can’t pay their rent or they leave the dwelling, the remaining contract-holders are liable and have to cover that rent as well as their own share. So, legally, you are entitled to continue receiving the full rent, regardless of how many of the original contract-holders remain.

The remaining contract-holder(s) may not want or need to replace the person that’s left, in which case you – or your agent - should make sure they can afford the rent on their own. It’s advisable to ask them whether their financial circumstances have changed since they were originally referenced and then judge whether they’re likely to be able to make the increased monthly payment.
 

Reference any new contract-holder

If the remaining contract-holder has found someone new to share with, they must be referenced – importantly, a right to rent check must be carried out on all contract-holders in England to ensure they have the legal right to live in the UK. If we are managing the dwelling for you, we will carry out this step for you.
 

Amend the occupation contract agreement

Every occupier of the dwelling should be on the occupation contract agreement, but it is possible to amend or draw up an addendum to the original contract – you don’t need to issue a completely new one. It’s advisable to have either a letting agent or legal specialist do this for you, to make sure nothing is overlooked.
 

Deposits for joint tenancies

Usually, if there is a single AST, there is one deposit taken – even though more than one person may have contributed to it – and it’s protected under the lead contract-holder’s name. If it’s the lead contract-holder that’s leaving, then as your managing agent, we would organise to repay the deposit to them and take a new deposit from the remaining contract-holder(s).
 

Can the contract-holder be charged for making these changes?

Since the contract-holder fee ban came into effect, it is not permitted to charge fees for setting up a occupation contract, referencing or credit checks. However, if the contract-holder themselves is requesting that the occupation contract is changed – i.e. if they want to move someone new into the dwelling – it is possible to make a charge of up to £50, or higher if the costs incurred are reasonable.

If the dwelling is fully managed, your agent will take care of all of this on your behalf and we’re used to dealing with contract-holder changeovers. But if you have any questions or are currently self-managing and would like to discuss our services for landlords, just contact your local branch and speak to one of the team.