What is a Tenancy SWAP – a Landlord Perspective

What is a Tenancy Swap?

You may be reading this if your tenant has approached us about the possibility of making changes to the tenancy – i.e. one or more tenants moving out and new ones moving in.

In order to help you understand this we have set out the advantages and disadvantages below

Advantages:

1. You will have continued tenure (no empty period) and uninterrupted rent for your property
2. You will retain a tenant who already knows your property so we should have fewer teething issues than you would get with a brand new tenancy.
3. No redecoration or maintenance works are required as your new tenants are already wanting to rent the property in the current state and condition.
4. If the property is an HMO a SWAP may mean continued tenure of your property through the summer months leading to a higher level of occupancy.
5. Rent increase – If we go through with a tenant swap and generate a new tenancy this gives us the opportunity to review the rent.

Disadvantages:

1. Administration and Referencing charges: A tenant swap comes with a significant amount of administrative work from our side so we would still need to charge for this service.  The work involved includes, but is not limited to, concluding the old tenancy by initial agreement, setting up the new tenancy, credit and referencing the new tenant/tenants, and arranging for the lodging of the new deposit and processing the repayment of the outgoing tenant’s deposit. 
2. We will need to reference check the new tenant and if we deem it sensible to do so we may need to re reference check the remaining tenant(s) to check their circumstances haven’t materially changed.
3. As there will be continued occupation we won’t get the opportunity to really get back into the property and do a deep thorough inspection and ensure a deep clean between tenancies
4. No guarantee that the inventory adoption process will work – Although we are very careful and very thorough with our tenant swaps, we have recently received updated information from Safe Deposits Scotland (the tenancy deposit scheme we use) where Inventories have been successfully challenged by tenants of Tenant Swaps should a deposit dispute go to arbitration. The scheme findings have in essence implied that even if there is an inventory adoption letter and a clear chain of continued occupancy in a property, there are still instances where the deposit scheme has found in the Tenants’ favour and not the landlords. 

How many SWAPS should we do?

As an agency we understand that a decision may not be clear cut.  Based on the risks above we would always steer our landlords into starting from scratch but we know this isn’t always clear cut.  Either way we would certainly strongly advise NEVER to do more than ONE tenant swap and ONE inventory adoption letter unless there are clear extenuating circumstances – and possibly in the cases of HMO student properties.