Tenant signs lease then changes mind and situation turns ugly!

by Readers Question

10:57 AM, 18th August 2015
About 3 years ago

Tenant signs lease then changes mind and situation turns ugly!

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Tenant signs lease then changes mind and situation turns ugly!

I have an ugly situation on my hands here despite my many years experience in lettings.
Our new tenants (& guarantor) signed an AST last month. After they signed and returned it, a full week later I was informed that they had changed their mind. They had made a partial payment (not even close to what was due) and have been insisting they want this returned.ugly

Now, being a reasonable person I said I would not hold them to the 6 month contract but re-advertise, and then they could pay a daily rent up until a new tenant came in, which happily, happened very quickly.

Despite weeks of negotiation the previous tenant is not in agreement and insists they want all their money back and refuse to pay any rent even though they signed the contract.

They are calling the part payment their deposit. I have tonnes of email correspondence demonstrating our weeks of negotiation, as I was hoping it would all be resolved amicably. As it hasn’t been resolved I took the precaution of sending this small payment to the custodial scheme, but they’ve now realised its four days past the 30 day allocated time to register and want to take me to court.

I have said that’s fine but of course, I’ll be issuing a counterclaim for breach of contract and rent owed. Will the judge automatically make me pay them x3 of this money? I have heard judges look at cases individually and clearly this is not a black and white case!

Any feedback would be appreciated!

Jo



Comments

Neil Patterson

11:01 AM, 18th August 2015
About 3 years ago

Hi Jo,

Considering the small sum off loss to both parties this situation has indeed got needlessly ugly.

If you have lots of documentation hopefully the judge will see this as 3x the deposit is the maximum not automatic.

11:54 AM, 18th August 2015
About 3 years ago

Reply to the comment left by "Neil Patterson" at "18/08/2015 - 11:01":

Thanks Neil. I'm willing to take a chance on this given how lenient I have been with these people and how accommodating we were. The prescribed info was even in the agreement they signed.

Steve Masters

11:59 AM, 18th August 2015
About 3 years ago

What is the status of this initial payment? Is it a deposit, a holding deposit or rent in advance?

12:00 PM, 18th August 2015
About 3 years ago

HI Jo. You are entitled to 6 months rent as they signed a legally binding contract. I they had not paid the full sum due I can not see how they can say about taking you to court over the deposit. Check out my profile to contact me if you want some legal help on this matter. This needs nipping in the bud before it gets even uglier.

Steve Masters

13:09 PM, 18th August 2015
About 3 years ago

According to the gov.uk "Tenancy deposit protection" page:-
"Your landlord doesn’t have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed). Once you become a tenant, the holding deposit becomes a deposit, which they must protect."
BUT
logically a deposit is a sum of money that is held long term over and above the rent.
When the AST is signed then any holding deposit should first be offset against what is contractually due first ie the rent. Only when all the rent in advance has been paid then any extra money becomes a deposit.

In Jo's case the advance sum is less than the rent so should be offset against the rent and not considered a deposit.

I hope I am right. If not then this opens another can of worms over deposit protection.

Teg's Dad

13:17 PM, 18th August 2015
About 3 years ago

Jo, are the threats coming from the ex-tenants or their guarantor? If the ex-tenants, then it may be worth contacting the guarantor advising that you intend to name them in any court action.

Did what they did pay cover the first month's rent?

I hope, when you initially responded to them, you also stated that you would charge them any re-advertising/re-letting costs/

David Griffith

13:40 PM, 18th August 2015
About 3 years ago

Did these "tenants" ever live in your property or did they change their minds before the start date of the tenancy?

14:44 PM, 18th August 2015
About 3 years ago

Hi guys
They never moved in. The amount they paid was less than the rent pcm. Its equivalent to half the deposit amount. I didnt threaten a reletting fee but did insist on a daily rent charge until the property was re-let. The deposit amount is clearly stated in the agreement they signed. They pulled out two daya before the inception date, but 7 days after signing the tenancy. Guarantor is fully aware and condones the tenants actions.
Thanks for the comments guys.

14:47 PM, 18th August 2015
About 3 years ago

Hi Jo, I had a similar situation on my of my places and ended up charging for my time and rent till I found a new tenant - they did argue even after they went to a solicitor.

14:49 PM, 18th August 2015
About 3 years ago

Hi Jo - even though they argued they gave in after they were given advice

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