Best course of action when rent unpaid on 12 month contract?

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    Best course of action when rent unpaid on 12 month contract?

    As posed previously my tenant signed a 12 month AST and has left after 2. (Both months rent late)
    I told him,as in his contract, that provided he can find me a suitable new tenant fine. I re-advertised it. He paid June's rent after I phoned every night.

    I then received a torrent of unpleasant text messages to which I did not respond and taking advice, all communication from me since has been written in letters to him at the property, to him at work and to where I believe he is currently living.

    After advice from this forum I offered to release him from his contract in exchange for the equivilent of 3 months rent and return of keys. I had no reply but he has now done a couple of viewings.
    He is now overdue with July rent. I am reluctant to call and have sent 2 letters reminding him of his contractual obligations.

    I needed a 12 month tenancy as I have relocated (5 hours away to help sick relative) and need this time to set up my business. The property is not ideal for rental and it will be difficult for me to show prospective tenants. I would not have left unless I had a 12 month contract in place

    My tenant has a good job and I have his address.

    After one month a one day's rent are due, would you suggest I issue a section 8 or do I just sit it out and wait for a new tenant to be found and hold him to however long this takes??

    Any suggestions thanks.

    #2
    Serve your s.8 Notice and bash ahead. Also, sue T for the full term's rent; you have no duty to mitigate loss during it.
    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
      I understand how to serve a section 8 but can I sue at the same time for the remaining months contracted?

      Comment


        #4
        Sort-of. T's committed an anticipatory breach, but you cannot easily recover from him any rent money that would otherwise not yet have fallen due.
        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


          #5
          Hence my dilemma.
          If I serve a section 8 isn't he just due me the 2 months? i.e. July and August

          Comment


            #6
            No. Are you confusing:
            a. action under section 8 (Notice re breach of the Letting Agreement and to end it); with
            b. action to recover debt?
            They're quite distinct.
            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


              #7
              Thanks Jeffery.
              Yes I am then. I thought a section 8 was to claim back unpaid rent and end tenancy - which maybe isn't the best way to proceed.
              Is there something else then for just trying to get the unpaid rent?

              Comment


                #8
                No as Jeffrey says you are confusing 2 separate concepts:

                1. Getting possession back.

                s.8 is simply the procedure to recover possession of the property before the end of the agreed term of the tenancy.

                2. Cancelling the tenancy agreement (albeit T remains in occupation).

                By failing to pay rent, your T has has made a repudiatory breach of the contract, entitling you to end that contract and claim damages.

                So, you could state to T that his failure to pay rent is such a breach and that your are therefore exercising your right to terminate the tenancy contract and will be suing him for damages, being the remaining rent due for remainder of the (now repudiated) term. This is the loss you have suffered as a result of his breach: you have now lost out on that rent.

                Howver because you are recovering damages and not a debt (the future rent you have lost out on is not yet due), you are under an obligation to mitigate your losses, (i.e. find another T), and to offset the rent that brings in against your damages.

                Comment


                  #9
                  Originally posted by Ira View Post
                  Thanks Jeffery.
                  Who's that, then?
                  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
                    Dominic, Jeffery,

                    I'm struggling to understand this - sorry.

                    I think you are saying: serve the section 8 to end the tenancy and get tenant to leave and pay the 2 months he will currently owes.
                    And also sue him for damages which would be the remaining 7 months (+ new letting costs) minus any months when I had secured a new paying tenant.

                    Is that correct?!

                    Comment


                      #11
                      Yes.

                      The purpose of serving the s,8 notice is to get your property back by lawfully evicting the T (if he is not prepared to leave peaceably). I am unsure from your first post whether he has actually left.

                      That procedure is purely to provide you with vacant possession of your preperty so you can re-let, or deal in it as you wish free of tenants.

                      My other comments relate to your contractual rights as against the defaulting tenant. These exist whether or not you evict him, although his continuing presence may prevent you from reletting to mitigate your loss.

                      However, you may be a ble to do a deal saving you legal costs: if he is prepared to leave peaceably without requiring you to get a court order, perhaps by way of settlement you could offer to let him leave now for an agreed settlement figure

                      Comment


                        #12
                        Thanks Dominic.

                        The Tenant has left (but maybe still returning to use the shower) and I have it advertised for relet but tenant is showing the property as he understood he had to find a new tenant. He has applied and got a council tax exemption. He would leave peacefully for free!!

                        I offered to release him for the equivilent of 3 months rent (1800) twice. He has not replied to either letter and now is not paying rent. I thought this figure was fair but may have reduced it if he had bartered but I have had no reply.

                        I do have a secured deposit of £900.

                        Comment


                          #13
                          Then you need to decide how to proceed in the knowledge now of the advice we have given. And I would urge to make that decision on wehat is economically best (i.e. what would lose you least money):

                          1. try to negotiate further reductions with the T to get him out without going to court (but risking him staying in occupation despite his assurances without paying further rent); or

                          2. coming down hard, serving a s.8, evicting him, getting your property re-let, but costing you a fair sum in legal fees.

                          Comment


                            #14
                            So it would seem that despite having a 12 month contract in place which everyone immediately points out legally binds the tenant to paying for the months he has agreed to, practically this is very costly and difficult to follow through.

                            Renting any kind of premises should be a serious and legally binding undertaking and yet it seems the tenants do have the option of simply walking away from a fixed term whenever they fancy it without many consequences, as the options to the Landlord are difficult and costly to enforce.

                            JeffREY, sorry if I upset you with my stress induced onset of dyslexia. Would you agree with this conclusion?

                            Comment


                              #15
                              Originally posted by Ira View Post
                              So it would seem that despite having a 12 month contract in place which everyone immediately points out legally binds the tenant to paying for the months he has agreed to, practically this is very costly and difficult to follow through.

                              Renting any kind of premises should be a serious and legally binding undertaking and yet it seems the tenants do have the option of simply walking away from a fixed term whenever they fancy it without many consequences, as the options to the Landlord are difficult and costly to enforce.

                              JeffREY, sorry if I upset you with my stress induced onset of dyslexia. Would you agree with this conclusion?
                              T can 'walk away' at the fixed term's expiry, without any consequences.
                              Any earlier: there are consequences (e.g. L can sue T for whole of the unexpired letting term's rent).
                              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

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