Claiming back reduced rent from tennants deposit

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  • Flashback1966
    replied
    Originally posted by jpkeates View Post
    It's some successful small business owner who can have their income reduced but still afford £90k per annum rent.

    That is a valid point. Some people like to live the high life. I have known business owners who faced bankruptcy and still kept their luxury cars, because they would n't be seen dead in a Ford. I suspect, that could be the same for his tenant.

    If the tenancy runs out December 2020, what happens after that?. What is the demand for your sort of property?

    Leave a comment:


  • jpkeates
    replied
    Unless the tenancy agreement is very unusual, the fixed term of a tenancy is the minimum term it can last and, unless the agreement allows for it, neither you nor the tenant can unilaterally end it early.
    If they have agreed to rent the property for 12 months at a rate of £10,000 per month, they have to have possession of the property for 12 months and pay you £120,000 in rent.

    Anything you agree between you to vary that is fine, but neither of you have to agree to what the other requests.

    If the tenant made some kind of counter claim (for disrepair or that the property wasn't as advertised for example) the judge might be sympathetic, but I don't think they'd have any real discretion otherwise.
    You can imagine how many tenancy agreements are in place and it would be a enourmous change if a fixed term wasn't really fixed.

    It's some successful small business owner who can have their income reduced but still afford £90k per annum rent.

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  • sparky1970
    replied
    jpkeates,

    Thanks.
    The tenant is a small business owner and claims that their income has been reduced, that is all I know.
    I guess what I am looking for is advice on my rights when it comes to taking this to court later down the line. If there is a £15k balance left and the tenant leaves without paying the last few months rent in order to ensure I do not deduct the difference, who would a judge favour given the circumstances? Would I have to be seen to start an evication process and if the tenant is offering to leave if we cannot agree then that would be unessasary anyway!

    Leave a comment:


  • jpkeates
    replied
    Originally posted by sparky1970 View Post
    I understand the rules around this is that I could only claim for 2 months of missed rent and NOT the remainder of the contract in full if the tenant have moved out.
    Unless the contract has terms about that, you can usually claim for the full fixed term of the contract.

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  • jpkeates
    replied
    You and the tenant have a contract and you are both obliged to honour it.

    Whether you lower the rent or not is up to you and your situation and conscience, you're not obliged to just because someone asks you to.
    If you don't agree to lower it, the rent stays as it is until at least the end of the fixed term of the agreement.

    Given that I'm not used to dealing with people able to pay £120,000 per annum rent, it would be interesting to know what the tenant felt justified the reduction and why they are impacted but can still afford to pay the equivalent of £90,000 per annum.

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  • sparky1970
    replied
    So should I leave it as is and allow the tenant (thank you for help with spelling) to continue paying a reduced rent despite the fact we are on different terms OR should I push for a resolution now on the basis the tenant may leave the contract early as they claim they can no longer afford it due to a change in circumstances? I understand the rules around this is that I could only claim for 2 months of missed rent and NOT the remainder of the contract in full if the tenant have moved out.

    Thanks!

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  • sparky1970
    replied
    Originally posted by jpkeates View Post
    When did the tenancy start?
    It started in late December 2019.



    Leave a comment:


  • jpkeates
    replied
    Originally posted by Mrs Mug View Post
    As the rent is more that £100,000 a year, the tenancy is not an AST. So the deposit rules do not apply. The tenant has a contractual tenancy. So what can happen, is all in the contract.
    Good point.
    Not used to dealing with rents on this scale!

    Leave a comment:


  • Mrs Mug
    replied
    Originally posted by Section20z View Post
    That looks, on those figures to be an unlawful deposit amount, if so you might be better negotiating a mutually acceptable arrangement with the tenant.
    As the rent is more that £100,000 a year, the tenancy is not an AST. So the deposit rules do not apply. The tenant has a contractual tenancy. So what can happen, is all in the contract.

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  • theartfullodger
    replied
    No offence but there are only 2 n's in tenant: Being careful with paperwork seems wise with landlord/tenant mattters...

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  • jpkeates
    replied
    Originally posted by sparky1970 View Post
    Thanks for the comment. The reference was an approximate figure. The exact deposit is 6 weeks rent (£10,000 x 12 / 52 x 6) which comes to £13,846. What do you mean by unlawful?
    When did the tenancy start?

    Leave a comment:


  • Section20z
    replied
    Originally posted by sparky1970 View Post

    Thanks for the comment. The reference was an approximate figure. The exact deposit is 6 weeks rent (£10,000 x 12 / 52 x 6) which comes to £13,846. What do you mean by unlawful?

    Thanks
    Sorry, I meant £15000 would have been over the 6 week maximum but as long as you have it protected then you should be able to claim rent arrears from deposit.
    But don't expect any cooperation from DPS thieves.
    Personally I would be considering allowing a reduced rent in the current circumstances. Maybe go 50/50 with half deferred if he will agree in writing you can deduct deferment from deposit might save argument later.
    Just my first thoughts on face of it - you know tenant and circumstances better than me.....

    Leave a comment:


  • sparky1970
    replied
    Originally posted by Section20z View Post
    That looks, on those figures to be an unlawful deposit amount, if so you might be better negotiating a mutually acceptable arrangement with the tenant.
    Thanks for the comment. The reference was an approximate figure. The exact deposit is 6 weeks rent (£10,000 x 12 / 52 x 6) which comes to £13,846. What do you mean by unlawful?

    Thanks

    Leave a comment:


  • Section20z
    replied
    That looks, on those figures to be an unlawful deposit amount, if so you might be better negotiating a mutually acceptable arrangement with the tenant.

    Leave a comment:


  • sparky1970
    replied
    Thanks everyone for the responses.

    Contractually the deposit can be used to offset any unpaid rent and there is not an early exit clause.
    I doubt very much that the tennant will move abroad and from my previous checks the tennant has assets based in the UK.

    My concern is that if I need to claim the rent back from the tennant (assume the tennant withholds the last few months rent) then a judge will not side in my favour due to circumstanses around COVID. I am not releasing them from the agreement and I am also not reducing the rent.

    Am I right to continue allowing the tennant to pay a reduced rent on the basis that we have not made an agreement?

    Leave a comment:

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