Trying to keep a good tenant

[bdh198]

I have two very good tenants in one of my properties. It's a three bedroom house and they share the rent 50-50. Their fixed term comes to an end in two weeks. One of the tenants has given notice that he wants to move out (new job in London), but the other wants to stay. The rent for the remaining tenant is too high for him to afford on his own. He is therefore looking for someone else to move in with him.

The problem is that if he cannot find a suitable co-tenant prior to the end of the fixed term then he will be forced to move out.

The suggestion I would like to make is as follows: He can stay in the property after the fixed term paying a reduced rent until either he finds someone to move in to replace his current co-tenant, or my agent finds someone else to take over the tenancy and he moves out.

The question that arises is regarding rolling tenancies. I assume this would be the default position if there was dispute e.g. If I want to get a new tenant in, and he didn't want to move out, I would have to serve notice in accordance with the rolling tenancy (the delay is likely to mean I lose a potential new tenant willing to the pay market rate).

What I'm keen to avoid is having a tenant stuck in a property paying a rent well below market value and him making no real effort to find another tenant. On the other hand, a reduced rent covering my core expense, the mortgage, is better in the short term than two months void.

Has anyone got any thoughts as to whether this is a sensible way forward, or is it potentially making more problems?

Thanks in advance for any comments or suggestions.

[Richlist]

* I've never done it.

* Never heard of anyone else who's done it

* and I wouldn't do it myself

Unfortunately for you there is no easy answer.

Depending on the wording of the contract, when one leaves that brings the whole tenancy to an end.

Start looking for new tenant(s) now.

[Grampa]

If you do go down this route (which i wouldnt do either) dont just take 50%, ask for 75% for 1 or 2 months then tell him it goes back up to the full 100% rate. That may give him more of an incentive to find someone that is acceptable to you.

[snorkerz]

You could go down the 'separate tenancies' route, but make sure you cost it out properly.

Essentially, you grant your current tenant a tenancy on one room with permission to use the rest of the property (bar one other room). You then advertise that room with the same terms. Each tenant would pay between 60 & 70%. This is because you would be responsible for council tax and possibly utilities. It also takes account of the fact that damage in communal areas is difficult to pin on one specific tenant, so it usually ends up as the landlords liability.

The positives are that you do attain more rent, you keep your 'good tenant', if you are not averse to LHA claimants, there are a surfeit of those looking for 'room only', if a tenant wants to leave it does not affect the other tenant, and you would rarely have a void with no rent at all coming in.

[bdh198]

Thanks for those comments. The suggestion by Fyldeboy is certainly an interesting option, but might be a bit complicated and expensive to organise through an agent.

At the end of the day a good tenant can very quickly become a bad tenant if he stops paying rent on time! I will give the tenant until the end of the tenancy to find a suitable co-tenant, and in the meantime I'll make sure my agents are advertising the property.