Is the tenant liable for the last months rent?

by Readers Question

13:11 PM, 8th December 2014
About 4 years ago

Is the tenant liable for the last months rent?

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Is the tenant liable for the last months rent?

I have a tenant who initially was given a six month tenancy, thereafter the new tenancy was given with a twelve month period. Is the tenant liable for the last months rent?

Within a couple of days of the new tenancy, the tenant requested I change the tenancy to six months because of work commitments, hence the new tenancy for six months was put into place straight way.

The tenant has now given notice leaving after only five months, instead of staying the full six months.

Is the tenant liable for the last months rent?

Thanks

Rex

 



Comments

Mark Alexander

13:18 PM, 8th December 2014
About 4 years ago

Hi Rex

Technically, your tenant is liable to pay up to the amount of the contracted rent until expiry of the contract, definitely no more.

HOWEVER, as he has given notice you are legally bound to mitigate your losses. In other words, you should to re-market the property immediately and liaise with your tenant in terms of viewings.

If you manage to re-let the property quickly then you will only be legally entitled to charge your tenant the amount for which you are out of pocket. If you use a good agency this may well be nothing which is good for both you and your tenant because it means that your relationship will have ended amicably 🙂

If you don't re-market the property straight away and decide to charge the rent to the last day of the contract then you risk bad feeling a a potentially expensive legal battle which you are likely to lose. Obviously if the tenant does not cooperate with viewings then your chances of winning any legal battle, if it comes to that, would be greatly enhanced.

See >>> http://www.property118.com/letting-supermarket-amend-pricing/68829/
.

Romain Garcin

14:10 PM, 8th December 2014
About 4 years ago

Unless there is a break clause and the tenant uses it, there is no such thing as a 'notice' from the tenant during a fixed term tenancy.

In addition, the landlord has no obligation to mitigate his loss: Any 'notice' from the tenant is at most an offer to surrender the tenancy and the landlord is free to accept it or not.
If the landlord does not accept the offer, he must treat the tenancy as continuing, which it is, and the rent continue to become due as per the lease.

It is really up to Rex to decide whether he wants to accept the offer to surrender, and on what conditions.

Mark Alexander

14:14 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Romain " at "08/12/2014 - 14:10":

Hi Romain

You seem very confident in your answer, how sure are you that "the landlord has no obligation to mitigate his loss".

I'm reasonably confident that case law exists to the contrary but I can't recall specific cases. I will investigate and report back if I find anything.
.

Romain Garcin

14:27 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "08/12/2014 - 14:14":

Hi Mark,

Yes, in a fixed term tenancy, the landlord must accept the tenant's offer to surrender for the tenancy to end.
If he does not then the tenancy continues, and as such so does the liability to pay the rent.

All the case law I know of confirm this.

Mark Alexander

14:33 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Romain " at "08/12/2014 - 14:27":

Hi Romain

What is the definition of "accept"?
.

Mark Alexander

14:36 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Romain " at "08/12/2014 - 14:27":

Hi Romain

Assume the tenant serves notice, moves out and posts his keys through the landlords door, then refuses to pay any further rent.

Now assume that there are 6 months to go on the contract.

I appreciate this is not the OP's scenario but nevertheless ..........

Now assume landlord does nothing to re-let the property in order to mitigate his losses and takes the tenant to Court for 6 months worth of unpaid rent.

How do you think the judge will rule?
.

Romain Garcin

14:50 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "08/12/2014 - 14:36":

Hi Mark,

If the landlord refused the offer and treated the tenancy as continuing (best to be explicit and write to the tenant) then the tenancy would continue and the landlord could sue for the 6 months unpaid rent and should win.

For example in Laine v Cadwallader (2001) the tenant had left and dropped the keys in the landlord's letterbox.
The court ruled that this was at most an offer to surrender, which the landlord was free to accept or refuse. The landlord refused but, as the tenancy was periodic, he considered it an implied notice to quit and was awarded rent until expiry of that implied notice to quit.

Mark Alexander

15:07 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Romain " at "08/12/2014 - 14:50":

Hi Romain

I've recalled the details of the case I was thinking of but I need to check whether it was settled or actually went to Court. It involved a corporate let of a residential property for the use of a Chief Exec of a professional body.

The tenancy was surrendered early by the tenant who gave "reasonable" notice to quit (3 months I think) despite the tenancy having around 18 months left to run. The legal arguments I have described above were used. It may well be that those legal arguments cited further case law.

Now that I've recalled the details of the tenant I will endeavour to find out the outcome and the legal arguments his lawyers were using. No guarantees he will tell me of course!
.

Ian Ringrose

17:51 PM, 8th December 2014
About 4 years ago

Mark maybe right on this, but there have been cases when the court decide that the landlord does not have to seek a new tenant. I think it comes down to the details of how the AST is worded.

However is it worth the effort when you just have to find a new tenant 1 month sooner, and you still have lots of notice?

Romain Garcin

18:08 PM, 8th December 2014
About 4 years ago

Reply to the comment left by "Ian Ringrose" at "08/12/2014 - 17:51":

Ian,

I think it is the contrary. All the articles I have read, and all the case law I know of are clear: A landlord is free to accept or refuse an offer to surrender.
So IMHO, there might have been cases when lower courts decides otherwise, but as far as I know, this is not the established legal position.

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