Tenants have moved out owing money – what are the landlords options?

FlatsHere is a question to the blog clinic from Gerran who is a landlord:

I have an abandoned apartment situation & rent arrears clouded by a water problem that the tenant probably caused themselves – but hard to prove.

AST commenced in September but within 2 weeks a pipe had been dislodged. Regrettably it could not immediately be determined where the leak was originating, so floors & tile work had to be lifted… The tenant requested a half rent situation for October, not having paid anything for October till 8th November.

During a face to face this was agreed and final cosmetic repairs would have been completed by 4 November. From here it just spiralled with the tenant cancelling a few times on the repairer. And me having to take entry rights on 13th to push through final repairs.

A report to the tenant was issued after this entry citing their repair wish list , which just kept growing … (Down to condensation and tap pressures). Within the first week of December I then emailed after unpaid rent and a few days later received a “we are still requiring further repairs” reply and have now moved out until these repairs take place. Keys back with estate agent – but not a word said to the agent.

I responded saying that I would now get an agent to check the condition of the flat , who verified it as fine and marketable (apart from the numerous holes in the walls for pictures, some of which they had poorly tried to fill). Obviously, I was of a mind that the flat was fine having pushed through with entry & final repairs.

At this stage I suggested that they surrender their current lease as we were in a stale mate. I have now, 27th January, just received their surrender request that they have backdated to 30 November.

That is unfair in my view – both the delay from them just before I can submit a section 8, and their total evasion of all arrears with a back date. Needless to say I have not signed an agreement on this surrender request.

Three debt collection agencies made contact with me, the concierge or via notice the week they vacated — all liability pertaining to their previous address which had not become evident on the home let checks. Seems they had to move on.

Do I follow through with section 8, and then apply for the rent arrears up to that point?

Clearly not going to return, but with 8 months AST left, do I just crack on with new tenants and accept their key return and and email saying they want out as enough to move on with new tenants?

Would you recommend a money claim against them instead of possession order? If so, what would be a reasonable claim request with half November, December and January all overdue, and February soon due?

They are not giving a forwarding address, but I have a works address and the respective parents addresses.  I also still hold the deposit on my deposits?

This is quite a complex question but to summarise, it looks as if your tenants have moved out after a long running dispute over disrepair which you consider is now resolved.

The tenants have asked to surrender the tenancy but want this backdated to November which you think is unfair.  You seek guidance on your options.

Surrender or eviction?

I think the first thing to consider is whether, in reality they are actually going to come back again.  From what you say it sounds not.  They have presumably moved all their possessions out of the property, they have handed the keys back to the agents and have written suggesting that their tenancy be surrendered.

It also looks as if they are being followed by a trail of debt collectors and CCJs so I think you are right when you say they are looking to move on.

So in all the circumstances I don’t think a section 8 notice followed by eviction proceedings is necessary.  The tenants have already said they want to surrender.  The only question is – how much back rent are they going to be liable for?

Your claim for rent

Turning to this, although their request may be a bit unreasonable in your eyes, it looks as if there have been problems at the property and so they do have at least some claim for compensation.

Obviously this will be wholly swallowed up by their rent arrears, but this is not a situation where tenants have failed to pay rent in a perfect property.  So for example if you were to bring a claim for a CCJ for the rent arrears there is potential for it to get snarled up in a disrepair based defence.

There is also the practical aspect.  Even if you refuse to accept their surrender – are you likely to actually get anything?  These are people who are being followed around by debt collectors.  Even if you were to get a CCJ, your chances of getting any recovery are, I would have said, low.

It may, on a practical basis, be best to agree that you will simply take the deposit money in lieu of outstanding rent and leave it at that.  At least then you will be able to move forward in re-letting the property and hopefully getting in a better tenant this time.

Incidentally on that point, you may want to have a word with your agents about why these people were ever approved as tenants.  What credit checking did they carry out?  It sounds as if the property should never have been let to them in the first place.

Conclusion

So in conclusion I think that although no doubt you do have a valid claim for rent, but there is potential for the claim to be snarled up by disrepair based defences.  Also also these tenants appear to be experienced in avoiding payment so you could spend a lot of time and money fruitlessly purusing them.  It sounds as if your best option is to just get what you can (ie the deposit money), write it down to experience and move on.

My feeling therefore is that your best option is to write to the tenants saying that you accept their offer to surrender on the basis that you take the deposit money and leave it at that, and that you will now be proceeding to re-let the property on that basis.

Give them a deadline of 14 days to get back to you if they object to this, then you will not have a problem of them coming out of the woodwork after you have re-let the property.

What would other people have done in this situation?

Buffer

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4 Responses to Tenants have moved out owing money – what are the landlords options?

  1. Yes I agree Tessa, I once heard a very good presentation from John Socha @ the NLA who put a compelling argument together which basically said – work out how much time & money you will spend perusing the claim in context of how much you get back (time = money) & often it makes more sense to be relieved they surrendered & walk away with your keys.

    When we discuss this in our landlord training the room is often divided as some landlords feel they have a ‘duty’ to pursue – to prevent it happening again & the tenant ‘getting away with it’.

    Hope this helps.

  2. They are clearly bad ‘uns and serial poor tenants so get rid and move on and learn from the experience.

    Try for the deposit if you like but they are bound to go to dispute

  3. A full Homelet reference was obtained for this couple. Homelet now inform me there is no feedback mechanism to alert prospective landlords of this couple given the new information that has come to light on their debts. If they exclude my name from future searches the report will still come up rosie for them.

  4. @Gerran – As I understand CCJ’s show up on homelet – one could always pursue until you get a CCJ against them – at very least should hamper them in future.




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About the post author:

Tessa Shepperson

Tessa is a lawyer specialising in residential landlord and tenant law. She runs the Landlord Law website (now in its 12th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google



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