House shares are a great way of maximising your rental income, and they cover every kind of tenant, from university students to high-earning professionals.
Inevitably, a housemate will leave at some point as their life evolves. And whether it’s moving in with a partner, relocating for work, or buying a home of their own, you’ll need to find a replacement.
The changeover doesn’t have to be a hassle, but to protect yourself as a landlord and keep the tenancy watertight, there are some dos and don’ts to bear in mind, including:
- Receiving and accepting notice
- The law around replacing one sharer with another
- Finding a replacement housemate
- Updating the tenancy agreement
- The changeover between the outgoing and incoming tenants
So whether you’re a landlord in Fife or you’ve got rental homes in other parts of the UK, you’ll find all you need in this week’s blog for a smooth, swift and legal switch between sharers.
THE NOTICE PERIOD
When one housemate wants to leave, and the others want to stay, how they give notice depends on the type of tenancy and whether you’re a landlord in Fife or elsewhere in the UK.
- For tenancies inside an original fixed term, the outgoing tenant stays liable for rent until they’re replaced on the tenancy agreement, even if they move out sooner (unless you agree otherwise).
- For Private Tenancy Agreements in Scotland, or rolling contracts/periodic tenancies in England or Wales, the outgoing tenant must give you the same amount of notice as if everyone were moving out.
- Whatever you agree, confirm everything in writing to avoid any misunderstandings over rent payments, moving-out dates, or handing back the room.
Finally, double-check whether the remaining tenants all wish to stay on. One housemate leaving can be a catalyst for more, and you may be able to achieve more rent with a brand-new tenancy.
THE LAW AROUND REPLACING SHARERS
Landlords have run into legal complications when sharers are replaced in a casual manner, with the courts issuing fines of multiple times the security deposit.
So here are some simple things to know to avoid that experience.
- The new sharer must send their security deposit to you, and not to whoever they are replacing. You then refund the outgoing sharer.
- The incoming sharer is entitled to request a new inventory if they feel the original one no longer reflects the property’s condition.
- The tenancy agreement must be updated to be an accurate record of who is living at the property and to remove the obligations of people who’ve left.
It’s really not worth cutting corners here as the penalties for non-compliance can be quite severe, and you could also compromise your own security as a landlord.
FINDING A REPLACEMENT SHARER
Depending on the set-up at your rental property, the outgoing sharer or their remaining housemates may look for a replacement, or you may prefer to do that yourself or via your agent.
So here are some things to remember.
- Whether it’s someone who replied to an advert or a friend recommended by your existing tenants, don’t let anyone move in without taking up references.
- To avoid wasted viewings, ask your tenants about the household vibe and what they want in a fellow housemate: does everyone keep themselves to themselves, or is it more sociable?
- Agree on preferred viewing times with the remaining tenants and whether they want to be in for all of them, or just when you’ve found one or more potentially suitable candidates.
If you’d like to know more about thorough background checks for potential tenants, take a look at our Rigorous Referencing blog that’s packed with tips from our process.
UPDATING THE TENANCY AGREEMENT
Whenever somebody moves out of a house share, and someone else moves in, the tenancy agreement needs to be updated to accurately reflect the current occupants and protect both tenants and landlords. So don’t forget to:
- Remove the outgoing sharer’s name and replace it with the details of the incoming tenants.
- Supply a copy of the updated agreement to all the tenants and any guarantors for signing before the new sharer moves in.
- Collect the first month’s rent and security deposit from the incoming tenant (then remember to protect it within 30 days of their start date with a government-recognised scheme).
All this might sound obvious, but it’s extraordinary how landlords can get themselves into trouble by taking a too-casual approach to what are actually very strict regulations.
SMOOTH AND LEGAL CHANGEOVERS
For hassle-free moving out and moving in days between your outgoing and incoming sharers, there are some things to know and get right, most notably:
- Reminding the outgoing tenant of how the room should be left in line with the tenancy agreement and to leave behind all the keys they have to your property.
- Checking the room has been vacated, professionally cleaned and returned to its original state by the time agreed.
- Ensuring that someone is at the property to meet the incoming sharer when they move in – this could be you, another tenant, your agent, or the inventory clerk.
Regarding the outgoing tenant’s security deposit: let them know immediately if you intend to claim for any damages, or that all is well and you’ll be transferring their money back swiftly.
What’s next for you?
If you’re a landlord in Fife and you’re either already renting to sharers, or you think they might be the answer to increasing your income, we’d love to talk to you.