Can I charge...

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    Can I charge...

    I have paid an agent to market my property. They have found a tenant who was due to move in yesterday. The dates have already been delayed once. They have paid 3 months advance rent and a 5 week deposit. All paperwork has been prepared and checked by all parties. The tenant has now decided they don't want to move in. Can they be charged for the inconvenience? Is it fair to take a months rent and refund the rest? I will have to pay the agent fees again to re-market!! Thanks in advance for your advice.

    #2
    How long ago did you take the deposit? It may well be an illegal fee unless it was received at the start of the tenancy or almost immediately before.

    The advance rent may also be treated as deposit if it was taken more than just before the tenancy started or if it is returned.

    If they haven't moved in, and the tenancy wasn't established by a deed, you have a simple contract breach as far as compensation is concerned, and you can claim the actual excess costs you incurred, but must try to minimise those. A month's rent sounds more like a penalty, than actual damages, so wouldn't be a valid basis of calculation.

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      #3
      The tenant is in breach of contract, so you can recover any losses that arise as a consequence.

      That would probably include the cost of the agent remarketing, but you can't just charge a month's rent as a penalty.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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        #4
        Either agree in writing the amount you are to retain, or wait until you know the extent of your losses (which I believe includes the amount you would have received in rent until the property is re-let) and then refund the difference.

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          #5
          Originally posted by leaseholder64 View Post
          If they haven't moved in, and the tenancy wasn't established by a deed, you have a simple contract breach as far as compensation is concerned, and you can claim the actual excess costs you incurred, but must try to minimise those. A month's rent sounds more like a penalty, than actual damages, so wouldn't be a valid basis of calculation.
          But it could be. The default position is that the tenant is going to be paying rent and all costs of re-letting until an entirely suitable new tenant is found (which may be a lot more than 1 month of rent). The alternative is that the tenancy could be surrendered by mutual agreement, and under such agreement any compensation can be decided that the parties agree. Just saying "one month" is not a valid basis and is a penalty if it is imposed.

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            #6
            What does it state in the Reservation Agreement/Holding Deposit Agreement (HDA)? Based on what you have stated there is a legal case to retain any Holding Deposit but this should be made clear in the HDA. Retaining other monies is not advisable. There are some other questions this raises such as why was a Tenancy Deposit taken before you entered into an agreement (taking a Tenancy Deposit before you enter into an agreement is a prohibited payment) and worse still the rent which does not fall due until the commencement of the tenancy.

            Short answer refund the tenant all their monies ASAP and find yourself an agent who knows what they are doing.

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              #7
              Originally posted by cymro123 View Post
              What does it state in the Reservation Agreement/Holding Deposit Agreement (HDA)?
              Who says this is a holding deposit? It sounds like a contract. Nowhere does it say holding deposit.

              Originally posted by cymro123 View Post
              worse still the rent which does not fall due until the commencement of the tenancy.
              Who says that is true? And in any case the tenancy was due to start "yesterday"

              Originally posted by cymro123 View Post
              Short answer refund the tenant all their monies ASAP and find yourself an agent who knows what they are doing.
              I see no evidence that that is appropriate or necessary at least on the basis of that which we have been told so far.

              A holding deposit is a deposit taken in anticipation of a contract. This is not in anticipation - it is for a tebancy that was due to start now. Rent paid is not a holding deposit.

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                #8
                Originally posted by cymro123 View Post
                why was a Tenancy Deposit taken before you entered into an agreement
                Where does it say this happened?

                i disagree with all your advice, and agree with #7

                Comment


                  #9
                  Originally posted by t-mhrwl View Post
                  Can they be charged for the inconvenience?
                  Yes.

                  Is it fair to take a months rent and refund the rest?
                  Not really, it might take a lot longer than a month to get a new, decent quality, tenant moved in. Plus the cost of re-advertising, viewings, vetting, checking right to rent, drawing up a new AST, serving how to rent guide, serving a cp12, protecting a new deposit, serving PI, handover, etc (the tenant fee ban doesn't apply here).

                  Tell them to make you an offer. You hold all the cards, let them do the running.

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                    #10
                    Doesn't it depend on what was actually agreed? There is no mention of signing a contract.
                    If all they had agreed on was a date to potentially sign the contract and move in, then I don't think there is a contract to breach.

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                      #11
                      Originally posted by Ted.E.Bear View Post
                      Doesn't it depend on what was actually agreed? There is no mention of signing a contract.
                      If all they had agreed on was a date to potentially sign the contract and move in, then I don't think there is a contract to breach.
                      Well perhaps but unlikely - tenancy contracts do not have to be signed to be valid, and this smells like a contract. If the contract (physically unsigned) specifies a rate of rent, and that rent is paid, that is pretty clear evidence of a contract.

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                        #12
                        The "tenant" has seen and checked "all the paperwork" and handed over rent and a deposit.
                        That sounds like a contract to me - the paperwork is a fairly detailed offer, the rent is an acceptance and consideration.
                        The intent seems pretty clear.

                        The "tenant" has now changed their mind - but I think the contract is good.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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                          #13
                          Thanks all.

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