Refund of deposit if no contract signed

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  • Refund of deposit if no contract signed

    In January we took a risk in renting to a young student. She paid a deposit and a months rent up front. We sent her contract by email to sign and scan back and she delayed and delayed. One excuse was her printer didn't work, another excuse was she coudln't find a scanner. She did not answer any calls. At the end of January she finally admitted she could not stay for the tenancy as she needed to go home. At the time of agreeing to rent to her there were other people interested who we have now lost. She is requesting her deposit back. We have said no, since we now can't fill the room as it's too late in the academic year and she has lost us a lot more money that the deposit we are holding from her. In a way she must have known right from the start hence her delay in signing the contract.
    She's saying she'll now take us to court.
    Help please?! We're finding it difficult out of priniciple since she's messed us around from the start!

  • #2
    Firstly, I am assuming that she is not living in the same house as you - i.e. is not a lodger but a tenant. I also assume she actually moved in??

    Since she paid a deposit (which I hope you have protected in one of the 3 government schemes) and a month's rent, she has an assured shorthold tenancy (regardless of not having signed the paperwork and whatever she may think) and as such is actually liable for the rent up to the end of the 6-month period which started on the day she moved in. This particular bit of tenancy law is actually supposed to protect the tenant, but sometimes can be very useful!!!

    She obviously has no idea what she is talking about - and I suggest you send her a letter before action pointing out the law and that you will be pursuing her for the full amount. Also, if you did not protect the deposit, I suggest you do so immediately and notify her of where it is.

    You may need to be prepared to negotiate all this - despite feeling agrieved - since she probably has no money - and in the end you have to be realistic - but I don't believe she has a case in court.
    Last edited by Mrs Jones; 14-04-2010, 13:23 PM. Reason: MTG's posting
    Mrs Jones
    I am not an expert - my posts are my opinion and should not be taken as fact!!

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    • #3
      It does not sound as though the girl has in fact moved in, which is why I posted to say that I did not think a tenancy had been created. However, I'm not sure now! (Hence removal of my post!)

      If a tenancy has not been created (only an oral agreement to grant a tenancy), the the deposit must surely be returned as it can only be claimed against a tenancy which actually exists/existed.
      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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      • #4
        We need to know if the "tenant" took up occupation.

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        • #5
          You are quite right - if she didn't move in, then no tenancy exists and deposit must be returned. An expensive lesson, I'm afraid.
          Mrs Jones
          I am not an expert - my posts are my opinion and should not be taken as fact!!

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          • #6
            Thanks for the responses.
            Indeed, she did move in. It is not in the same house as me, it is in a house rented to students.
            She moved in for just less than a month. Initially she'd paid a month's rent to cover January. A week prior to the end of January she said she'd be moving out as she could no longer stay at the University and needed to return home.
            We didn't yet protect the deposit as she hadn't signed the contract yet - we do that when we've a signed copy of the contracts.
            Thoughts?

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            • #7
              But the tenancy exists even if nothing's signed- a Letting Agreement for three years or less can be oral (although that's not a good idea).
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

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              • #8
                Originally posted by jeffrey View Post
                But the tenancy exists even if nothing's signed- a Letting Agreement for three years or less can be oral (although that's not a good idea).
                In other words, she will continue to owe you rent as it becomes payable, for the whole of the fixed term unless you are minded to agree an early surrender with her.
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                • #9
                  Originally posted by mind the gap View Post
                  In other words, she will continue to owe you rent as it becomes payable, for the whole of the fixed term unless you are minded to agree an early surrender with her.
                  Yes; although it's always difficult to prove what L and T agreed (e.g. a fixed term) if there is no written evidence at all.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                  • #10
                    As jeffrey states, the problem is that in the absence of a tenancy agreement, she could state that a tenancy of any length was created orally.
                    This could lead to a lengthy court battle with no garauntee of a succesful outcome, if i were you i would cut my losses remarket the property, return her deposit(less any deductions, which in the absence of a signed inventory could be hard to prove) get new tenants in and do it right this time. i.e get tenancy agreement signed when deposit is handed over and do not allow acces to the property until this has been done.

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                    • #11
                      Originally posted by chappers2341 View Post
                      i would cut my losses remarket the property, return her deposit(less any deductions)
                      Deductions would be risky if there was a tenancy created and the deposit wasn't protected.

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