This is a question to the blog clinic from Alan who is a landlord.
Hi I have a tenant with a letting agent AST with break clause. Tenant moves out 3 months early , no notification from agent of this, no notification to landlord either , can landlord insist that three months rent still due or not? Landlord still holds deposit.
Answer
The normal rule in any contract situation is that where person A is in breach of the terms of the contract, the other person, person B, is entitled to be put in the position they would have been in had person A done what they should have done.
So in the context of a tenant moving out with no notice:
- They are liable for rent to the end of the fixed term (on a month by month basis) or
- If it is a periodic tenancy the landlord is entitled for rent in lieu of notice (normally this will be one month).
- Where the tenant moves out during a fixed term where there is a break clause, the landlord will be entitled to rent to cover the notice period in the break clause.
So if under the break clause the tenant has to give two months written notice (as is normal) then the landlord is entitled to two months rent in lieu. When can be deducted from the tenancy deposit.
Under a periodic tenancy the landlord is entitled to treat the tenancy as continuing until the tenant serves a valid notice to quit.
Under a fixed term tenancy the landlord is entitled to treat the tenancy as continuing until the end of the term, whether the tenancy includes a break clause or not.
What if the local authority are footing the bill, do they still have to keep paying for the two months?
I understood that any loss to landlord had to be mitigated by him/her marketing the property as soon as possible, and tenant only liable until new tenant replacecs him?
The tenant is only liable until a new tenancy agreement is signed with a new tenant (as that will end the original tenancy).
However the landlord is under no duty to ‘mitigate his loss’. There is case law to support that.
Thanks. It seems different to breach of contract in Tort then ?
The law of Tort is not about breach of contract. It is to do with compensation for civil wrongs – outside of contract.
Sorry I should have said Contract Law where person suffering the loss has a duty mitigate it.
@ConceptaHit I am afraid there is no duty on Landlords to mitigate their losses if tenants move out part way through a fixed term. As I say above this is supported by case law.
If a tenant signs up for a years tenancy that is what they are signing up for. They are not entitled as of right to renege on that and expect the landlord, at his own expense, to find new tenants to get the outgoing tenant ‘off the hook’. It would be nice for tenants if that was the case but I am afraid it isn’t.
If the point is ever revisited by the Supreme Court in an appeal in the future it is possible that they may come to a different conclusion but that is what we have at the moment.
The case is Reichman v. Beveridge http://www.bailii.org/ew/cases/EWCA/Civ/2006/1659.html