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.