Tenant reneged on deal – HELP!

by Readers Question

11:45 AM, 1st August 2014
About 6 years ago

Tenant reneged on deal – HELP!

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Tenant reneged on deal – HELP!

It was silly I know, to do informal business with a personal connection, but here is the story:

My wife’s flat became available for rent, (previously rented to a friend for 5 years with no hassle at all).

She put it on Facebook and 5 people immediately replied. She narrowed it down to 1 person, agreed everything, redecorate the flat to this person’s specification, put new carpets, foregoed the opportunity to get work paid for by insurance in order to expedite the decoration – and the tenant PULLED OUT less than a week before she was due to move in, because she had found someone else.

Now we have a problem – we cannot find anyone else at the moment (probably the time of year). We need the monthly rental income. We are now have to put all the bills in our name including council tax etc .

The tenant agreed to pay a months rent to make up for it, but then said that she couldn’t, so reneged on that too.

Does anyone have any advice? Could we take her to small claims? There was no contract signed, and most of the communication was done by my wife, on text. There is plenty of intention on the tenants part and commitment to renting.

Can anyone help?

Thanks
Mattreneged


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Comments

Philip Savva

8:38 AM, 3rd August 2014
About 6 years ago

Lessons to be learnt, me thinks! Learn from your mistake & move on?, matter of curiosity where is the flat located?

Percy Vere

9:05 AM, 3rd August 2014
About 6 years ago

Q. Does anyone have any advice?

Yes, learn a landlording lesson from this. Always take a holding deposit. Until those contracts are signed and dated you have no chance of any legal action in spite of what you may have been told.

Q. Could we take her to small claims Court?

A. On what grounds? She changed her mind which legally she is permitted to do so. Foreforture of her holding deposit would have eased your situation a bit.
Facebook? is the way ahead for advertising your flat? I personally wouldn't have thought so, but hey! ho! 25 years in the business you learn something new every day.

Puzzler

15:10 PM, 3rd August 2014
About 6 years ago

Lorraine, I would advise against naming and shaming this person as it could be libellous. All the prospective tenant did was change her mind, she was not locked in due to the unfortunate naivete of the landlord. A good example of why you need an agent if you don't have the expertise. I agree with Percy that advertising for a tenant on Facebook is like telling your friends you're having a party and then complaining when you get gate crashers...

Since Matt and his wife are clearly inexperienced in this, they're lucky this is all that happened - do they understand the minefield of legal obligations? Deposit protection etc.? I am sorry they feel let down but I also think they got off lightly.

Steve From Leicester

9:22 AM, 4th August 2014
About 6 years ago

Reply to the comment left by "Puzzler " at "03/08/2014 - 15:10":

All good comments on this topic, I particularly agree with those who point out that, at the end of the day this lady simply changed her mind before she became legally bound by a tenancy agreement and there's probably not a lot you can do about that.

The other particularly good point was that amateur landlords letting their property informally could easily fall foul of the numerous rules and regs governing lettings.

Taking a "reservation fee" or "holding deposit" might have protected Matt from some of his losses . . . . but if the law defined this fee as an unregistered deposit he could have found himself facing a claim for three times the rent from his prospective tenant. And she could still have pulled out and left him in the lurch.

Percy Vere

14:41 PM, 4th August 2014
About 6 years ago

Reply to the comment left by "Steve From Leicester" at "04/08/2014 - 09:22":

Steve from Leicester said:

Taking a “reservation fee” or “holding deposit” might have protected Matt from some of his losses . . . . but if the law defined this fee as an unregistered deposit he could have found himself facing a claim for three times the rent from his prospective tenant. And she could still have pulled out and left him in the lurch.

No Steve, the holding deposit is not classified as an unregistered deposit. The registered deposit can only come into effect after a tenancy contract has been raised and signed by both tenant and landlord and then by law you are duty bound to register that deposit.

The holding deposit is taken and it is made quite clear to my prospective tenants that the money taken is fully refundable upon exchange and signed for tenancy contracts with rent money and deposit.
The holding deposit is to cover any expenses that I may incurr prior to tenancy contracts and occupation being taken up and to compensate me if my time and money is wasted by any person who thinks I can be messed about by changing their minds at the very last minute.

It is a nominal sum of usually £100. I have never had a problem with any of my tenants with this arrangement however, I have had one or two not wishing to opt for this arrangement and for me... great! I have weeded out the potential time wasters.

Steve From Leicester

16:20 PM, 4th August 2014
About 6 years ago

Reply to the comment left by "Percy Vere" at "04/08/2014 - 14:41":

Fair point Percy, I was making a more general point that an inexperienced landlord can easily fall foul of deposit protection regs but I agree that it would have been unlikely in this situation.

Ian Narbeth

16:41 PM, 4th August 2014
About 6 years ago

Reply to the comment left by "Ray Davison" at "01/08/2014 - 19:08":

Ray, your statement: "Unless a consideration has been made by both sides a contract has not been formed. By refurbishing the property to her specification you have given a consideration but if she has not done so by payment or some other identifiably valuable action then the contract was not formed." is not correct. Consideration is needed for a contract under hand to be created but the requirement is that "detriment moves from the promisee" see e.g. http://en.wikipedia.org/wiki/Consideration_in_English_law
I am not sure that is helpful to Matt in any case.

Jill Lucas

10:29 AM, 5th August 2014
About 6 years ago

Unfortunately this is a basic lesson in buy to let - unless you have a watertight contract there is no point in pursuing this - as it will just become a battle that is only winnable by a solicitor. My top tip is to find a good agent, pay a finders fee - get them to draw up the AST contract, a condition report and take the deposit! Going DIY often ends in disaster - when you discover the forms you have produced either have not been properly drawn up or witnessed etc. too much room for error! Of course you can go DIY and get contracts thru recognised legal stationers but at your peril i.e. if you don't want pets etc this must be highlighted from the start! You can waste hours of time and effort that you need to apply to your business which saves in the long run!

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