Tenant swaps in Houses in Multiple Occupation (HMOs) and flatshares are becoming a growing challenge for landlords and letting agents, particularly following the introduction of the Renters’ Rights Act. The deposit protection provider mydeposits has issued a warning about the complexities arising when one tenant leaves a shared property and another moves in under the same tenancy agreement.
Increased frequency of tenant changes in shared accommodation
With 4.7 million households renting privately in the UK, a significant number reside in shared housing such as HMOs and flatshares. These types of properties naturally experience more frequent changes in occupancy compared to single-let homes. Under the new legislation, the shift from fixed-term to periodic tenancies removes the natural break point that previously allowed landlords and agents to conduct thorough check-outs and check-ins.
This change means that managing tenant swaps now requires more careful attention to ensure responsibilities are clearly defined and documented as tenants come and go within an ongoing tenancy.
Challenges of managing tenant swaps without fixed-term tenancies
Tim Frome, head of government schemes at mydeposits, explains that the removal of fixed terms alters the established rhythm of tenancy management. “Agents are used to working with a clear endpoint where responsibility is agreed and documented,” he says. “Without that, the focus shifts to how those responsibilities are managed as tenants come and go.”
This shift presents practical difficulties, as agents must now decide how to handle the condition of the property and tenant responsibilities during a tenancy that does not formally end.
Options for handling tenant swaps
Mydeposits suggests two main approaches for agents when managing tenant changes. One is to treat each tenant swap as a reset, conducting a full check-out for the outgoing tenant and a fresh check-in for the incoming tenant. This method provides a clear paper trail but increases costs, time, and administrative burden.
The alternative is to rely on the original inventory and tenancy documents. However, this approach requires agents to prove that the incoming tenant has explicitly accepted the existing record of the property’s condition, which can be challenging without a formal check-in process.
Importance of tenant acceptance of check-in reports
Mr Frome emphasises that “it is not enough for a check-in report to exist.” Incoming tenants must have access to the report, understand its contents, and explicitly agree to it. Without this, there is a significant risk that responsibility for property condition becomes unclear, potentially leading to disputes later in the tenancy.
Shared households are particularly vulnerable to disagreements, not only between landlords and tenants but also among tenants themselves, especially regarding when damage occurred and who is liable for repairs.
Implications for deposit deductions and dispute resolution
Clear and robust evidence at each change of occupier will become increasingly important, particularly when landlords seek to make deposit deductions. Mr Frome notes that disputes are not always confined to landlord-tenant issues; “In shared households, disagreements between tenants themselves are not uncommon.”
As tenant swaps become more frequent, the likelihood of such disputes rises, especially if proper procedures are not followed. This highlights the need for landlords and agents to implement thorough and consistent processes to manage tenant changes effectively.
What this means for landlords
Landlords managing HMOs and flatshares must adapt to the new tenancy framework by ensuring that tenant swaps are handled with clear documentation and communication. Conducting formal check-outs and check-ins, or at minimum securing explicit tenant agreement to existing inventories, will help mitigate disputes and protect deposit claims.
Given the increased administrative demands, landlords may need to allocate additional resources or work closely with letting agents to maintain accurate records and uphold tenancy standards under periodic agreements.
Source: Based on reporting from Property118
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