Am I legally bound to pay compensation to tenants?

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  • Am I legally bound to pay compensation to tenants?

    I was recently forced to cancel a short term tenancy 2 weeks before it was due to began because of flooding in the property which is now uninhabitable.

    No contract was signed but I took a deposit which I have paid back. But the tenant wants compensation for the inconvenience. Am I legally obliged to him compensation in this type of situation?

  • #2
    You are not legally bound to do anything at present.

    If the tenant choses to sue you, they could claim damages equal to whatever your pulling out of the contract has cost them. However, a judge would expect them to have mitigated the loss (ie kept them as small as possible) and with a fortnights notice would it be unreasonable for them to have found alternative accommodation and suffered no loss at all?

    You may have a defence in that the contract had been 'frustrated', but I'm not sure how usable that is - you'll have to wait for more info or google it

    My own googling revealed this - I suspect the last sentence is the critical one http://www.lawmentor.co.uk/glossary/...ated-contract/

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    • #3
      We didn't sign a contract. We were due to sign one on the day the tenant moved in in 2 weeks time.

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      • #4
        Originally posted by crunchycornflake View Post
        We didn't sign a contract. We were due to sign one on the day the tenant moved in in 2 weeks time.
        No, but a contract had obviously been formed, albeit oral, by the paying of a deposit.

        I wouldn't worry too much about it. If you want to be nice - offer a small ex-gratia payment for their inconvenience.

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        • #5
          Thank you.

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          • #6
            Originally posted by Snorkerz View Post
            No, but a contract had obviously been formed, albeit oral, by the paying of a deposit.
            Not necessarily a contract for a tenancy. OP doesn't tell us the nature of the agreement relating to the handing over of a 'deposit'.

            And if there were a contract for a tenancy, it would be frustrated by the flood, and I doubt LL would be liable for any damages.

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