Subletting and deposit protection dilemma

Wrong insurance Ros or do you mean the legal help in your buildings policy?

This is a clear neighbour liability and his insurer should pay your claim directly or indirectly.

If not your insurer pays your costs and then recovers from the neighbour;’s insurer. That’s why the other insurer may as well just pay up from the start, because they will in the end.

Hi Industry Observer

Sounds like B is in breach of his agreement with A and should not have let out to C. Is that right?

The fact there is an agreement that has been broken will not force an insurer to pay out in a claim. They will simply refuse the claim as the property is sub let.

A needs to get B and C out ASAP.

Hello everyone,

Thank you for your advice much appreciated. I have made a error on my first comment and let me clarify.

Person A is friends with person B and lets the property out to person B with no contract or AST.

A year later Person B sublets the property to Tenant C and issues NO AST but an email setting out terms and conditions and takes a deposit. Person B does not protect the deposit from Tenant C.

I would like to know whether person B had to protect deposit as there was no AST and where the deposit was not protected does tenant C have a claim?

Reply to the comment left by “sajed khan” at “23/04/2015 – 14:07“:

Hi Sajed

The laws specifies that the default tenancy is an AST, even if nothing whatsoever is in writing.
.

Jason

B is in breach to A

The insurance issues are getting mixed up, I was dealing with a leak from property next door, not the insurance position on Sajed’s case.

Tenancies between friends and families are always the worst!!

Mark – you are right in principle but not if the property is not B’s main residence then it won’t be an AST. At this point in time with B gone and C there B has a contractual tenancy with A and C has an AST with B (except |B has no right to create anything, but that is what it is!!)

Reply to the comment left by “Industry Observer ” at “23/04/2015 – 15:27“:

So what should A do?
.

Serve notice on B demanding back vacant possession from him which means B must get rid of C

All very much easier said than done of course!!

Reply to the comment left by “Industry Observer ” at “23/04/2015 – 13:40“:

Hi Industry Observer. The problem was that the neighbour would not co-operate and give the details of his insurance policy – I don’t know what can be done then. It seems that it is not like a car crash where the police are on the scene and can maybe force the person to give their insurance details… So my insurance policy paid out to me and then did not get it reimbursed.
On a related point, if your insurer refuses to pay out on a claim and you have some kind of legal protection/assistance (sorry, don’t know what it’s called) with your insurance policy, I can’t see you being able to use the legal services against your own insurance company (sorry, this is a different scenario, but just one I wonder about.) – and in any case I wouldn’t have any confidence in their impartiality or competence, based on my own experience.
I apologise also to the original poster for going off on a slight tangent.

Slightly different tacks. Law (at least in Scotland) is for deposit to be lodged with an approved deposit scheme, and where this is not done, the “Landlord” may be fined (recent case was I believe 3 x deposit). May not help in this situation other than a leverage on B.

On another point, if a mortgage loan on the property check terms as many Lenders require an AST or SAT to be have been issued and sub-letting may be a breach of loan conditions.
Allan

We seem to have lost sight of Sajed’s questions. Sajed, on the basis of what you have written and without legal liability:
“Is person B responsible for deposit protection or does this liability fall back on the property owner/landlord (person A)?” Person B is responsible as he took the deposit.

“Is the new occupier of the property (person C) a tenant by default of person B (the original tenant)?” Yes, C is B’s tenant and as against B can enforce the tenancy. B may have problems if A terminates the tenancy against B because he will be in breach of his tenancy to C. As far as A is concerned C is an unlawful subtenant.

“Can a tenant create a tenancy (in writing or by default) in a property in which he is not the owner, even if the AST between the landlord (person A) and the tenant (person B) strictly prohibits subletting?” Probably yes. It gets a bit esoteric legally here but provided B procures that C gets quiet enjoyment of the property, C is getting what he bargained for and cannot complain about B’s absence of title or the fact that the subletting was unlawful.

“If the property owner/landlord wants/needs to regain possession how does he go about it?” Because someone, C, is occupying as a residence the owner will need to go to court. Take legal advice from a solicitor. A may also need to stop accepting rent from B to avoid losing his right to forfeit. (I can’t go into it here but you should get legal advice.)

“What rights does person C have? For example, does he have the rights of a ternant? Can he make a claim in respect of failure to protect his deposit and if so does he claim against person B (the tenant who he sees as the landlord) or person A, the real property owner/landlord who he may not even be aware exists?” C’s claim is against B who took the deposit. A has never received the deposit and it has nothing to do with B’s tenancy with A.

Sajed, I have just read your follow up. If a deposit was taken then it needs to be protected. An AST has probably arisen by default by virtue of B letting C in and charging him rent.
Hope this helps.
Ian