Here is a question to the blog clinic from Fiona (not her real name) who is a landlord
I have let my property out last year to a couple. We had a 1 year fix contract and it started on 25th Aug 2013. They asked to renew the contract this May. I told them I won’t renew it as I am going to sell this property. Then they asked to end the contract early.
We agreed to change the notice time from 2 months to 30 days (I lacked experience). Then on 9th June they sent a notice to me to end the contract on 9th July. On 25th June, they paid full month rental.
Before they handed the keys over to me, they asked me to return 16 days rental to them. They still handed the keys over on 9th July. And I have returned their full deposit back. Now they emailed me to say they will move the case to court if I don’t return 16 days rental to them.
Two points they argued in their letter of claim:
- 30 day notice has overruled other clauses such as the property is rented monthly and rental is payable monthly
- They argued they didn’t receive the receipt of the the deposit. They will start proceedings for statutory compensation for non-compliance with Section 213 of the Housing Act 2004-Information relating to protection of the deposit to be provided to tenants within 30 days of receipt of the deposit.
For deposit, I have registered their deposit in TDS last Sep. I signed Prescribed Information and sent the TDS certificate and Prescribed Information to them by post. But they didn’t return the forms to me signed.
The first time they inquired about their deposit protection was 2 days before they moved out (7th July). I sent the TDS certificate to them when I returned the deposit (17th July). But they still argued this in their letter of claim.
I think I have complied with my obligation but I am not 100% sure what judges may think.
So I am emailing to you to ask for your advice
- whether their claim is lawful to the contract
- whether I will have a bad position in court because of deposit notice.
Answer:
My view is that you should refund the money.
Although the rent is payable monthly, if you agreed to allow them to surrender the property early on a specific day, I think it is arguable that you should not receive rent for the subsequent proportion of the fixed term when they were not in occupation, in the absence of any agreement to the contrary.
If you do this again, it would be best to make it clear exactly what the arrangements are as to the rent, in writing.
So far as the deposit is concerned, I think you may be vulnerable to the penalty. You say you protected the deposit ‘last September’. But was it before or after the 30 days deadline landlords have for protecting the deposit under the legislation? You need to check this.
However the real problem is the prescribed information. When did you send it, exactly? Do you have proof of postage?
If your tenants claim that they have never received it then (as you will not be in a position to prove it was actually delivered to them) the Judge may well take the view that it has not been served properly and impose the penalty.
It is not up to the tenants to confirm receipt of the deposit paperwork at the time – it is up to you to protect your position by ensuring that you can prove that it was served.
16 days rent is considerably less than the penalty you would have to pay if the Judge found against you, so I think you would be best making payment and then putting this all down to experience.
I am afraid I will have to disagree with Tessa. Unless your tenancy agreement has a clause saying that money will be refunded in these circumstances or you agreed to do so you are not legally obliged to refund the money. The Apportionment Act deals with this and requires refunds of rent. However it only applies to rent paid in arrears not rent paid in advance. If the tenants elected to leave early then that was their decision. This actually came up less than 12 months ago before the Court of Appeal in relation to commercial tenancies but the same law applies.
Obviously there is a moral case for returning the money but I am a lawyer so I lack morals!!
It sounds to me like you’re on the hook for the overpaid rent and the potential liability for failing to serve the prescribed information.
The part about changing notice from 2 months to 30 days is a bit confusing but I don’t see that it’s relevant.
What is relevent is that you accepted their notice and surrender of the tenancy on the 9th July, therefore you should refund any over-payment beyond this date.
As Tessa mentioned, if you pay back the 16 days rent it may dissuade them from taking further action over the prescribed information.
I bow to David’s superior knowledge on the apportionment act, but you still have the problem with the deposit / prescribed information.
Thanks very much for all these kind comments.
The deposit was protected by TDS 7 days after I received it. So it was within 30 days deadline.
I don’t have anything to prove as I just posted it. But I have incorporated the clauses from TDS within the tenancy agreement. Does this make any difference?
Kudos to you for being honest and telling them of your intention to sell. But I can only imagine that they regret paying you the full month’s rent on June 25th now. Why seek to keep any money that doesn’t belong to you? You seem like a nice person who really had some empathy for your tenants; don’t start looking for the easy buck now, it’s not worth it.
One imagines that they reduced the notice period to 30days to give them the best chance of snapping up the next property they found. Now, just imagine if handover dates had to be on the last day of the month.. life wd be easier for everyone.
[Did you know, in Switzerland, there are only two possible handover dates in the year. 31 March and 30 Sept! And if you get a new job offer in a new city in June … hmmm.]
you are right. It just waste my time.
They suggested 30 days notice and I agreed. I didn’t realize so much trouble.
I’m trying to read between the lines now… but did you think that they wd see the tenancy through till 25th August .. and maybe misunderstand why they requested to reduce the term of notice?
You helped them out though. That was a nice thing to do.