Landlord Mitigating Loss?

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    Landlord Mitigating Loss?

    Important case reported in today's Times: Reichman v. Gauntlett.

    It decides that, where T defaults and tenancy continues, L does NOT have duty to mitigate loss (eg seeking new tenant). That duty applies only if the tenancy ends or is terminated. Defaulting T is therefore liable for rent during all of tenancy; it is up to T to mitigate liability (eg negotiating surrender to L or getting L's consent for T to assign/sublet).

    Good news for landlords; bad news for defaulting tenants.
    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).

    #2
    Commercial Leases - But does it extend to AST

    Interesting decision.

    It all revolves around a commercial lease though, so I don't know if this would extend to residential tenancies.

    Anyone any thoughts?
    On some things I am very knowledgeable, on other things I am stupid. Trouble is, sometimes I discover that the former is the latter or vice versa, and I don't know this until later - maybe even much later. Because of the number of posts I have done, I am now a Senior Member. However, read anything I write with the above in mind.

    Comment


      #3
      This is nothing new and has always been the case in my experience.
      The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

      Comment


        #4
        Landlord - Mitigating Losses

        I wonder if this applies to a residential tenancy?
        My gut feeling is no!
        In the case of a commercial tenancy, most tenants have a right to assign, consequently if they don't take advantage of this benefit, and any surrender attempt is not accepted, they suffer the consequences - ie the landlord sues for loss of rent for an extended vacant period, perhaps up-to the end of the term. There's no onous on the landlord to re-let as in fact in law he has no legal right to do so - the tenant holds the controlling interest.

        With residential it's different. Most residential tenants do not have the right to assign. If they clearly and categorically surrender their tenancy voluntarily, for whatever reason, legally they are obliged to pay rent to the end of their contractual term.
        However, unlike the commercial tenant, they have no way of minimising their losses, but the landlord can.
        Therefore, with a residential tenancy the landlord would be expected to make reasonable efforts to re-let asap thereby minimising the tenant's losses.

        This LandlordZONE® FORUM answer is just ONE OPINION based on personal experience. Before taking action or not always seek professional advice with the full facts of the case and all documents to hand. Read the Forum "Terms of Use".

        Comment


          #5
          Don't know: I have read the report carefully, and nothing seems to have turned on commerciality or assignability. I may post again once full Law Report text is published officially.
          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
            As far as residential tenancies are concerned the tenant has a common law right to approach the landlord to replace the tenant, and the landlord would either have to allow the tenant to assign, sub-let or be replaced. It is considered an unfair term to prohibit the tenant from doing either (or both), but is not invalidated by specifically stating that, say, sub-letting (on its own) is prohibited within the tenancy agreement which will mean that assignment is valid.

            I know it appears complicated but in reality it isn't.
            The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

            Comment

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