Rejecting signed tenancy not commenced.

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    Rejecting signed tenancy not commenced.

    I appreciate that this query may need detailed consideration and advice from a Solicitor but would be grateful to receive any comments or thoughts on this.

    An individual signed an assured shorthold tenancy agreement, paid a small deposit at the beginning of May 2010 for a tenancy to commence on 1st July 2010 for 6 months. The individual changed their mind and informed the agent shortly afterwards and will not take possession. The agent has informed him that he is obligated to pay the rent for 6 months from 1st July. What should the individual to reject this/mitigate any loss?

    #2
    Contract law basics necessitate offer, acceptance, and- here- contractual consideration.
    Those are present, so why should the contract not be binding and enforceable?If it is, T has no right to 'change [his/her]mind'.
    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


      #3
      and note LL has no obligation to mitigate his/her loss.
      PAUL GIBBS, solicitor, Jacobs & Reeves. My comments on this forum are correct to the best of my knowledge and belief. No responsibility or liability is accepted by reason of reliance upon such comments. This disclaimer would not apply to direct clients of Jacobs & Reeves where there is a valid retainer in place and I would be happy to confirm any advice if formally instructed. . Jacobs & Reeves now offer a fixed fee possession service.

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        #4
        Only for damages, not for the debt owed.

        Comment


          #5
          Originally posted by dominic View Post
          Only for damages, not for the debt owed.
          L surely has no obligation to mitigate the debt (unpaid rent): see post #5 on http://www.landlordzone.co.uk/forums...ad.php?t=28357
          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


            #6
            More advice please?

            The client simply wishes to cancel the contract; I appreciate that he is contractually bound, but surely the LL has a duty to responsibly re-market the property and sue/request any "loss" that the LL suffers as a result of the tenant rejecting the contract? And in the event that the LL "does" re-market the property then surely the LL cannot expect to receive full rent "twice" for the contractual period?

            I appreciate that people are contractually bound by what they sign and that this forum is landlord orientated (I am a landlord), but the facts are that this person is young, naive has insufficient income to warrant a tenancy being granted in the first place and the LL (via a letting agent) has done no referencing.

            Again any thoughts or advice much appreciated!

            Comment


              #7
              Originally posted by sbsimpson View Post
              The client simply wishes to cancel the contract; I appreciate that he is contractually bound, but surely the LL has a duty to responsibly re-market the property and sue/request any "loss" that the LL suffers as a result of the tenant rejecting the contract? And in the event that the LL "does" re-market the property then surely the LL cannot expect to receive full rent "twice" for the contractual period?
              There is nothing 'simple' about reneging on a legally binding contract, I'm afraid! And no, the LL does not have any legally-enforceable obligation to mitigate his losses by re-letting (although in practice, most try to). If he does manage to re-let, then the contract with the first T will be demeed to have been surrendered by the fact that someone else is living in the property from whatever date they move in. Up to that point (and in theory for the whole of the fixed term), the LL can sue the first T for the rent.

              Originally posted by sbsimpson View Post
              I appreciate that people are contractually bound by what they sign and that this forum is landlord orientated (I am a landlord), but the facts are that this person is young, naive has insufficient income to warrant a tenancy being granted in the first place and the LL (via a letting agent) has done no referencing.

              Again any thoughts or advice much appreciated!
              Actually the forum helps landlords and tenants equally with neither fear nor favour. We would say (and have said, more than once!) exactly the same thing to any LL who decided after offering a tenancy that he had changed his mind and wished to live in the property himself: this is breach of contract. Sadly, being young, naive and impecunious, just like being ignorant of the law, is no defence. The onus is on the prospective T and his/her guarantor if there is one, to read the contract carefully and to seek legal advice as to its full implications before signing it. Whether the agent referenced the T carefully enough (or even at all) is neither here nor there. It would only be an issue between LL and agent; it's not the T's problem nor can he use it as a defence. T has no defence unless the agent forced him into signing under duress - which is extremely rare and clearly not the case here.

              The only circumstances, in practice, in which Ts can get out of contracts like this is when they find another suitable T to take their place - and that is only of course the LL agrees to this/the replacement Ts.
              '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

              Comment


                #8
                Originally posted by sbsimpson View Post
                I appreciate that people are contractually bound by what they sign and that this forum is landlord orientated
                No, it's not. It deals equally and fairly with all sorts of queries, whether from L or T or anyone else. There is no bias.

                Originally posted by sbsimpson View Post
                this person is young, naive
                Is T aged at least 18? If so, he/she is an adult and deemed legally-capable of entering into grown-up obligations.
                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


                  #9
                  Basicily as a LL, I would try and get another T as soon as possible, it saves a lot of hassle, as you may get somebody else by the 1st July, and no more hassle.
                  Also if you can't get somebody by the 1st and the old T can see you are making an effort, they may pay the differance without you having to go to court.

                  Also if he not taking the P because he can't afford it, would he have any money to pay you, even if you went to court.
                  Disclaimer: What I say is either right or wrong. It may be advisable to check what I say with a solicitor. If he says I am right then I am right, unless he is wrong in which case I am wrong; but if he says I am wrong then I am wrong, unless he is wrong in which case I am right

                  Comment


                    #10
                    cynical

                    Well I suppose if I was a landlord with no morals "struggling" to rent a property and someone young and naive came along who demonstrably couldn't afford the rent but there was an opportunity to get some money out of them by sharp practice then I might be tempted to earn a few quid, maybe get the benefit of 6 months council tax exemption etc on a property that otherwise might be costing me money, maybe also keep any deposit paid etc. However, in the case of a letting agent there are basic principals involved here, referencing, affordability, know you client, "fact finding" I seem to recall it being termed in the financial services industry - now regulated. Irrespective of what a contract or the law says, at the end of the day "fair play" will prevail and if it doesn't then no doubt legislation will be passed to cut out the cowboys..

                    Comment


                      #11
                      Originally posted by sbsimpson View Post
                      ... in the case of a letting agent there are basic principals involved here, referencing, affordability, know you client, "fact finding" I seem to recall it being termed in the financial services industry - now regulated. Irrespective of what a contract or the law says, at the end of the day "fair play" will prevail and if it doesn't then no doubt legislation will be passed to cut out the cowboys..
                      No, sadly the letting industry is unregulated and thanks to the present government is likely to remain so:

                      http://www.landlordzone.co.uk/forums...ad.php?t=29170

                      I would say that far from being cynical, you are extremely optimistic to think that all letting agents are bound by some code of practice, or even basic principles. Some are; many are not.
                      '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

                      Comment


                        #12
                        Even the "good ones" are named so not because they are actually "good" - but because they:

                        a. don't rip you off all the time;
                        b. are voluntarily regulated.

                        "Good" in the letting agency world does not equate to the actual meanign of the word, such are the woefully inadequate safeguards in this industry dealing in peoples' homes (and unscrupulously trading on people's fears of impending homelessness).

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