What is a Contract Change?

Occasionally Tenant’s circumstances change; this sometimes means they are potentially unable to fulfil their obligations under the Tenancy Agreement. Rather than the Tenant serving notice on the Tenancy Agreement, paying any penalties due or forfeiting their Deposit; at the Landlords/Agents discretion a “Mid-Term Contract Change” may be permitted.

A Contract Change is particularly helpful when only one Tenant out of a group of sharers decides they need to move on (terminate their lease) but the remaining sharers would like to continue renting the property without serving notice on the Tenancy Agreement.

Essentially this involves the outgoing Tenant(s) who is leaving sourcing a suitable* replacement/ingoing Tenant for themselves (with the approval of the existing housemates) and following satisfactory reference checks, payment of fees & deposit, a new contract will be drawn up covering the period of the existing agreement**.   All existing housemates and the replacement/ingoing Tenant will need to sign this new contract and once executed the outgoing Tenant is released from the Tenancy Agreement.

*Please see our referencing criteria guide (click here to view) for further information on a suitable Tenant
**If a Tenancy Agreement is near expiry and/or due for Renewal it is likely the contract will be renewed for a further year at this point

How is a Contract Change Processed?

There are four main steps which need to be taken for a successful Contract Change to be executed;

1. Initiating Contract Change by Tenant (outgoing or existing);

• Tenant to notify D&H in writing (email sufficient) their wish to commence a contract change
• D&H to send Tenant relevant forms for completion and advise total fee due
• Tenant to complete and submit all relevant paperwork in full along with payment of fees

2. Application processing / Drafting of New Agreement - Once all forms and payment of fees are received by D&H we will;

• Formally advise Landlord of Contract Change, obtain verbal authorisation and request formal authorisation subject to satisfactory references etc
• Carry out the relevant (ingoing) Tenant reference checks
• Draft Tenancy Agreements and related paperwork
• Book a provisional date for all existing and ingoing Tenant’s to visit our office and sign the new Tenancy Agreement and related paperwork

3. Landlord/Agent Authorisation, Execution of documentation - Once all ingoing Tenant references and Landlord Authorisation is received and approved;

• Existing and ingoing Tenant’s visit office to sign new Tenancy Agreement, Property damage waiver liability, standing order and any other relevant paperwork
• Ingoing Tenant to pay their deposit to D&H and first months rent to existing housemates
• New Tenancy Agreement executed

4. Completion and Return of Deposit to outgoing Tenant - Following the payment of rent, deposit and execution of the new Tenancy Agreement;

• Outgoing Tenant will formally be released from previous Tenancy Agreement
• Ingoing Tenant can take possession of the property (keys to property passed on by outgoing Tenant)
• Outgoing Tenants deposit will be returned to their nominated bank account (less any deductions agreed with existing housemates)
• If applicable the new Deposit will be re-registered with the TDS scheme by the entity (Landlord or Agent) holding the deposit and a new certificate issued
• Tenancy Agreements will be posted to Landlord & Tenant
• Contract Change complete

Generally a Contract Change can be competed within four weeks from D&H receiving all relevant paperwork in full along with payment of fees.

What needs to be completed by the Tenant to initiate a Contract Change?

Before D&H can begin to process a Contract Change the following forms will need to be completed (in full);

1. Tenant Contract Change Application Form completed and signed by outgoing or existing Tenant
2. Tenancy Application form for each ingoing Tenant completed and signed
3. Payment of any administration fees

How much will it cost & who should pay for it?

The cost of a contract change is dependant on individual circumstances. For example a simple replacement of one Tenant for another who is in full time permanent employment should cost no more then £240.00 in total. A full breakdown of our fees is provided below along with our suggestion on liability of payment;

£160.00  - Contract Change Application fee (payable by outgoing Tenant)
£80.00  - Tenant Admin Application fee (payable by ingoing Tenant)

The fees below are rarely requested and usually are not required if the ingoing Tenant has been in full time permanent work for the past three months and earns in excess of £15,000 pa.

£60.00  - Guarantor Fee (payable by ingoing Tenant only if one is needed)
£15.00 - Land Registry search fee (payable by ingoing Tenant only if one is needed)
£40.00  - Credit Check Fee (payable by ingoing Tenant only if one is needed)