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Can a tenant claim a refund of rent paid in advance when cancelling early?
11 April 2020 Keith Martin
Here is a question from Jo who is a landlord:
"Hello, I would be really grateful for your opinion.
I rented out a property under an AST dated 19 October 2016. The AST rolled into a contractual periodic tenancy which began on 19 October 2017, with rent paid quarterly in advance, on the 19th of October, January, April and July.
I needed to sell the property and therefore asked my agent to serve a Section 21 notice. Although I asked the agent to serve the notice on 18 January 2020 requesting the tenant to leave on 18 April 2020 (the last day of a tenancy period), they put the wrong dates: the S21 was dated 20 January, requiring my tenant to leave the property on 20 April.
The tenant, having seen the error, informed me of her intention to remain in the property until the next period of the tenancy, ie 19 July, to which I agreed.
In the event, my tenant found a new flat and asked to meet me at the property on 9 March to hand over the keys, which I did. The flat has remained untenanted since then.
I have returned the tenant’s deposit, but she is now asking for a proportion of the rent that she paid for the period 19 January to 19 April to be refunded to her.
Please could you advise on whether I am obliged to return a proportion of the rent? The tenant has given me until 12 April to do so, otherwise she will begin court proceedings. I would also be interested to know the position regarding Council Tax and other bills (I am prepared to pay these – just wondered what the official position is.)
Many thanks in advance for your help."
Answer
It’s a difficult one as the answer really is ‘it depends’. The question is – did the tenancy end on 9 March or not?
Was the tenancy ended by a tenant’s notice to quit?
All periodic tenants have the right to end their tenancy by giving notice of not less than the period of their tenancy.
A ‘period of the tenancy’ in your case though is unusually long at three months. When your tenant handed back the keys on 9 March she had not given anything like the requisite notice period.
So the tenancy was not ended by a tenants notice to quit. In fact, the notice she had given had been to vacate on 19 July.
Was the tenancy ended by agreement?
The tenant may well say that by accepting the keys on 9th March you were agreeing to a ‘surrender’ of the tenancy which would then have ended at that time. If this is the case, then she would be entitled to the refund of her money.
It’s hard to say whether this is the case or not as I don’t know exactly what was said at that meeting.
The situation prior to that meeting was that the tenant had paid up to 19 April and had given notice to leave on 19 July.
What I would have advised you to say at that meeting was that although you were accepting the keys this was not on the basis of a surrender of the tenancy as at that date and that she would remain liable until the end of the period she had paid for. I would also have advised you to immediately confirm this in writing.
Even better would have been for you to write to her immediately before the meeting on 9 March to say that although you would accept the keys in order to secure the property as she was vacating, this would be on the basis that she would remain liable for the rent until the end of the quarter, but that you would waive any further right to rent in lieu of notice.
As landlords are entitled to notice when tenants vacate a periodic tenancy and as it looks as if you had received no or very little notice of your tenant’s intention to vacate on 9 March I would be surprised if any Judge would order a refund of the rent paid in advance. It is possible that you could even be entitled to rent until 19 July.
In conclusion
It really depends on what was said and agreed at and about the meeting on 9 March and the basis upon which you accepted the keys. Was it acceptance of the end of the tenancy as at that date, or were you accepting them because she was leaving in order to keep the property secure?
It is not totally impossible that a Judge in a court hearing would find that you agreed to end the tenancy on 9 March and order a proportionate refund of the rent. However, I think it is more likely that a Judge would find that you had accepted the keys to accommodate the tenant and that she remains liable to the end of the period.
A plan of action
I would suggest therefore that you write to her saying that there was no intention on your part to accept a surrender as of 9 March. You accepted the keys in order to secure the property as she was leaving and that technically she was liable until the end of the notice period she had previously given ie 19 July.
Go on to say that, without prejudice, you are prepared to accept the rent paid up to 19 April in lieu of notice but that if she brings legal proceedings you will defend and counterclaim for the rent in lieu of notice to 19 July.
It might be an idea also to send her a cheque for a smaller amount, say 1 week’s worth of rent, under a separate ‘without prejudice’ letter saying that although you do not accept that she has any claim, you are prepared to pay this sum without prejudice and without any acceptance of liability, in full and final settlement of her claim.
If she then accepts the cheque and pays it into her bank account she will be deemed to have accepted your offer and will not be able to proceed further.
If she refuses the offer then you will have to decide whether you are willing to fight things out with her in court or not. I think you would be more likely to win but it is by no means certain.
So far as the utilities are concerned, liability for these will depend on the terms of your tenancy agreement and when the tenancy is deemed to have ended
Tips for Landlords who want to offer a rent reduction during the coronavirus emergency
16 April 2020 Keith Martin
Are rent reductions an option?
Many tenants are struggling with financial problems during the Covid-19 crisis and as a consequence, they are asking their landlords for a rent reduction.
Every case is different – some landlords are better placed than others to be generous, and while some tenants have lost most of their income, others will have felt little if any financial impact.
Suspending or reducing the rent will be a matter for negotiation, but when landlords have decided they are going to offer financial help to their tenants there are some traps they should avoid such as:-
Breaching the Tenant Fees Act 2019 or
permanently reducing the rent
What type of rent reduction?
If you have agreed on something with your tenant, you should make sure that both parties actually understand the details of the deal which has been agreed upon. Landlords can suspend the rent entirely for an agreed amount of time.
One way to structure this is to agree that the rent is suspended until the landlord gives one month’s notice that the rent will resume. However, it would probably be easier to agree that the rent is suspended until a particular date, and then extend that later if necessary.
A rent reduction works the same way – you need to agree on what the temporary rent is, and for how long the reduced rent is in effect.
Instead of fully extinguishing the rent liability, landlords can agree to give extra time to pay. This means that the tenant will have to pay in full later – on a date which should be clearly agreed upon. If the tenant fails to pay by the agreed date, they could still be evicted.
Before responding to requests for reductions landlords should think about their own circumstances, and the tenant’s situation. They should also check the terms of any rent protection insurance they hold.
Formalising the agreement
It is unnecessary to have a formal contract signed by both parties (and during the lock-down unnecessary journeys to sign contracts must be avoided). However, a reduction should always be recorded in writing. That could be an exchange of emails or text messages.
If text messages or WhatsApp messages are used, both parties should keep copies. It is always better to keep screenshots than assume that messages will be available to look at later.
Periodic Tenancies
If the landlord and tenant have agreed to vary the rent during the fixed term, that varied rent could still apply when a period tenancy arises. To avoid this, landlords could agree that a rent suspension (or a reduced rent) applies for certain identified months.
That will make it clear that the reduction is only temporary.
In a periodic tenancy, the landlord may be stuck with the lower rent if the landlord and tenant agreed a lower rent and there is no agreement for the rent to be increased again later. The ‘section 13 notice’ procedure might be available to the landlord to increase the rent, but again it would be much easier to just agree specific months with a reduced rent in effect.
Granting a new tenancy
The current lock-down permits people to move house when necessary, but few people will be moving right now. If you are granting a new tenancy and you want to offer a reduced rent during the Covid-19 crisis, you could offer to accept say half the rent in the first three months.
Rent is a ‘permitted payment’ under the Tenant Fees Act 2019, but landlords are forbidden from charging an increased rent at the start of a tenancy (which would otherwise be a way to impose a hidden charge). However, there is nothing to prevent a higher rent being charged later in the tenancy.
Do tenants risk penalties if they are unable to vacate at the end of their notice period?
9 April 2020 Keith Martin
Here is a question regarding the corona-virus emergency to the Tenant Assist from Marie (not her real name) who is a tenant:
"We are renting from a letting agency. Our landlord served notice (section 21) early February 2020 (before the measures had taken place). Our lease ends on 15th April. Our household is affected by the Corona-virus and we are a family of 3, 2 adults (father and mother ) and a 4-year-old boy.
We contacted the letting agency and the landlord and explained the situation that we are unable to move out on 15th April as we are unwell. We told them we will pay the rent normally, as usual, every month.
The landlord told us we have 10 days and its more than enough for self-isolation and that he has new tenants lined up and he will want us out.
We feel extremely worried and we feel its extremely unsafe for us to move homes at this time and to be in contact with movers for at least 4 or 5 hours and still we will need to buy all furniture.
We know that the landlord or agency cannot evict us at the time being, but can they sue us for not moving out on time as they served us notice and we have an assured short-hold tenancy? Can they claim any compensations or ask for double rent?
We want to know if we are covered by these new measures, as our landlord served the notice before the measures as mentioned above.
We would appreciate your advice and guidance in these difficult times.
Answer
Short answer – you should stay in your home and not move if at all possible.
The reason why the government have introduced lock-down measures and arranged for a stay on all eviction proceedings is that any property moves at this time could help spread the virus which is what we are all trying to avoid.
A section 21 notice does not end the tenancy, it means that if the landlord goes to court, a Judge must (if the notice has been drafted correctly and if all the pre-conditions have been complied with) make a court order for possession.
However until that court order has been made, your tenancy remains in place and you are entitled to live in the property.
After a fixed term comes to an end, statute (ie s5 of the Housing Act 1988) brings into force a ‘periodic tenancy’ which will run from month to month – assuming your rent is paid monthly, which will be under the terms and conditions of your preceding fixed term tenancy agreement.
Your landlord cannot, therefore, require you to leave and if he persists in this, this will be deemed harassment which is a criminal offence. Residential tenants can ONLY be physically evicted by court bailiffs (or High Court Enforcement Officers) after a court order for possession has been obtained.
In short:
You will still have a tenancy and a tenancy agreement after 15 April
You cannot be required to leave without a court order
Your landlord cannot obtain a court order at this time
To answer your specific questions:
Your landlord cannot sue you for not moving out
Your landlord cannot claim compensation for the difficulty they are in with their incoming tenants – landlords should never sign a new tenancy agreement with new tenants until they have vacant possession – if they do they are taking a risk. You cannot be held responsible for this.
You will not be liable for double rent – this is sometimes payable if a tenant has given a tenants notice to quit and then fails to vacate. This is not the case here, it is the landlord who has served notice, not you.
I would suggest you write to your landlord telling them that you are unable to move out on 15 April and that you do not know when you will be in a position to vacate. However, you have been advised that from 15 April your tenancy will continue as a periodic tenancy. You will continue to pay rent as normal.
If the landlord starts putting pressure on you, keep a record of everything which happens (eg a diary) so if necessary you will be in a position to prove harassment.
Government Guidance
You can also refer your landlord to the relevant sections of the government’s advice for landlords and tenants paragraphs, for example
Paragraph 1.11
Which says:
If you are a tenant, the Protection from Eviction Act 1977 means that you cannot be forced to leave your home without a court order and warrant for execution of that order. The 1977 Act also protects some people who occupy their home under a licence. Breaches of the Act can give rise to a civil action and be a criminal offence.
Paragraph 2.1
Which refers to the suspension of court proceedings for 90 days from 27 March 2020 and then says
For landlords, this will mean not expecting tenants to move even where you have already issued notice of your intention to regain possession of the property, or if you go on to issue notice for any reason during the next three months.
And finally
This is a difficult time for everyone and landlords and tenants are expected to be reasonable about things and not expect the impossible.
If you are paying rent, your landlord is fortunate as many tenants are (wrongly and unlawfully) failing to pay.
Stay in your home, pay your rent and wait until this dreadful time is over. Or at least until things become less difficult and property moves less dangerous.
If a house is let to the occupiers limited company, not them personally, how can you get it back?
11 April 2020 Keith Martin
Here is a question from Gail (not her real name) who is a landlord:
"I wish to give my tenants notice. They have not been a problem – just want my house back to live in.
I originally let it through an agency who dealt with everything. I then took over the periodic tenancy. I have only just received my contract (after much nagging to agents) and it has been let to the company of the couple and not the couple themselves.
The start of the document states it is let to the ‘……an organisation…..not covered by Part 1 of the Housing Act 1988’. Does this mean that I cannot give them a Section 21 notice?"
Answer
No, you are fine, you will be able to get it back. But you won’t be able to use section 21.
Section 21 can only be used for assured shorthold tenancies. These were set up by the Housing Act 1988 which also prescribes how they work, including the rules for evicting tenants.
However not all tenancies are assured shorthold tenancies. Lets to a limited company are excluded. Which means that they are governed by the original ‘common law’ rules which applied to all tenancies before the various housing acts came along to change them.
Evicting company tenants
You can’t use section 21 so a section 21 notice will be of no effect. You need to serve an old-style ‘Notice to Quit’ which needs to have prescribed wording on it. You can find them in Law Stationers and my Landlord Law service has them.
The notice period is one full ‘period’ of the tenancy or 28 days whichever is the longer. So if your periodic tenancy is monthly you actually do not need to give as long a notice period as you do under section 21 (which requires a minimum of two months notice).
You also do not need to worry about all the rules that surround section 21 claims as they do not apply to other types of eviction – so it should actually be easier. Your ground for possession will be that you have served a Notice to Quit on the tenants (ie the company) and you have not been given vacant possession.
Incidentally, I am a bit surprised that your agents let to a company rather than the occupiers themselves without telling you, and this may be why they were so reluctant to let you have the tenancy agreement.
Desperate landlord needs her home back but tenants are refusing to vacate
11 April 2020 Keith Martin
Here is a question from Gail (not her real name) who is a landlord:
"I am an accidental landlord and my rental flat in London is my one and only private home.
I am returning from abroad after a traumatic totalitarian lock-down and desperately need my home back. My tenant is refusing to leave until coronavirus/state of crisis ends which from experience is indefinite. They are not currently financially struggling (I am) and the flat downstairs from mine is available at a reduced rent temporarily for them, but they ‘aren’t keen’ and forcing me to live there or in an AirB&B instead.
During my weeks of solitary totalitarian lock-down, my mental health suffered, and when I learned I had no home and no hope of getting my home back indefinitely, I feel almost suicidal.
The tenant is saying I can find temporary accommodation and move during the crisis – so I ask why can’t they? What assistance can I get to claim my home back? All the eviction courts are now closed too. Can I threaten to sue after the lock-down lifts for emotional damages? I feel like my home has been seized in a socialist coup"
Answer
I feel for you but this is a difficult time for everyone.
However, even in normal times, there is no way you can recover possession of your property without going through the eviction process, which generally takes in the region of six months, assuming nothing goes wrong.
The rules for recovery of property are set by the legislation and there is no provision for relaxing these to take account of the landlord’s circumstances, however unfortunate. It would be unfair if the security of tenants in their homes varied according to the personal circumstances of their landlord.
At the moment, of course, we are in the middle of a pandemic and are in lock-down to protect us from catching and spreading the coronavirus and overwhelming the NHS.
This is why the government has changed the law to increase notice periods and the courts have suspended all possession actions for 90 days from 27 March 2020. The government have also said that property moves should be avoided if at all possible.
In light of this, your tenants are doing the right thing by refusing to move during the pandemic.
I assume that their fixed term has ended but this will not end their tenancy as they will now have a periodic tenancy which will run from month to month (assuming they pay monthly).
I am afraid you will have to face the fact that your home is unavailable until such time as either your tenants are able to move, or until the courts lift their suspension on court proceedings and you are able to evict them through the courts. Although inevitably there will be long delays in eviction proceedings when that time comes.
It sounds however as if your tenants are paying their rent, in which case you should be able to afford to rent somewhere else, maybe the flat downstairs, for the time being.
HOW TO END YOUR STUDENT LETTINGS AGENT WORKING RELATIONSHIP
1 April 2020 Keith Martin
Lettings agents can be great choice for most landlords. They manage the let, collect fees and rent, sometimes carry out repairs, and do all the background checks on new tenants. Yet despite this range of services, there may come a point where you wish to do this yourself. If you’re considering bringing your working relationship with a student lettings agent to an end, here is the correct way to go about it.
FIRST: WHY DO YOU WANT TO END IT?
There are two main reasons why a landlord wants to end a student lettings agent working relationship. The first is that you have received a bad service or feel that what they do is poor value for money. They never carry out repairs, but merely inform you of the problem and insist you make arrangements. The second is that your student tenants wish to stay longer, and you want to save them and your business the renewal fee and increase your margins. Most undergraduates stay only one year, but some prefer to stay longer. Doctoral students, for example, often look for a multi-year let.
CONSIDER MINIMUM PERIOD AND TERMINATION CLAUSE
Firstly, check that you are able to cease a working relationship with your student letting agent in the timeframe that you wish to end it. The contract might specify a minimum contractual period of several years. If that is not about to expire, you may have to wait a little longer. You will also need to give a minimum notice period. At the time of publication, it is February and your student tenants for next year are likely already searching for property. This may not be the right time to consider ending such a working relationship.
PUT IT IN WRITING
Nothing is worth anything in contractual law without written notification. This does not have to be a letter; it can be an email. So long as you make your intentions clear on the end date – acknowledging that you understand the contractual requirements of notice. They may require three months minimum, but the longer notice you give, the better it is for you and for them to get the final details transferred over. The less hassle, the easier the process will be for everyone.
FULL DISCLOSURE
Be courteous and helpful, handing them any and all information they made need from you in acceptable time frame. You may need their services in the future so make the transition as smooth and as prompt as possible. It’s likely they won’t need much information from you. If anything, they will be handing information to you for the transition.
If you are happy with their service, you may wish to reconsider leaving. Truly good agents that go the extra mile are rare. The work you take on could prove too much.
WHY WE USE FACEBOOK TO MARKET YOUR PROPERTY
25 March 2020 Keith Martin
Unsurprisingly, Facebook has become massively popular among Facebook users (which is pretty much everyone on the planet with an internet connection).
Facebook is very similar to Gumtree, it’s an online marketplace where [Facebook] users can advertise items for sale.
Since its launch, Facebook has been slowly opening up the types of items you can shift on their platform, from clothing to toys. In late 2018 they opened it up to the UK rental market, allowing landlords to advertise their vacant properties to the Facebook community.
Again, similar to Gumtree, while Facebook can generate a TONNE of enquiries, the quality of leads can often be questionable, so it’s important to ensure you rigorously vet all prospective applicants, and be wary of scams.
HOW TO ATTRACT INTERNATIONAL STUDENTS IN POST-BREXIT BRITAIN
9 March 2020 Keith Martin
Earlier this year, Prime Minister Johnson’s new government voted down an amendment to keep the UK in Erasmus after Brexit. Some analysts believe the UK will remain in the scheme as part of a wider trade deal negotiation though. the future of Erasmus in the UK is unclear and may not be decided until close to the end of the transition period.
Undoubtedly, international students will become a dwindling resource in the coming years. This will be the case regardless of whether the UK remains in Erasmus . The UK is becoming a less attractive place to study. Nevertheless, they have not dried up completely. Landlords still have a ready pool of tenants looking for property.
WHY INTERNATIONAL STUDENTS ARE VITAL
Most landlords already blame the government’s handling of the Brexit process. They feel it has led to the loss of foreign student numbers, not just those on the Erasmus scheme. However, The NLA and other landlord representative groups are looking at new ways of enticing international students.
international students and foreign workers are a desirable customer base. Why? They offer higher rental yields and responsible tenancies compared to the general population. With higher income, home country bursaries and funding they are financially more stable while wanting to study here.
LANDLORD PERKS FOR INTERNATIONAL STUDENTS
Faced with this problem, landlords are going the extra mile. Some of these are standards offered to all students for their convenience:
Utilities and internet in your name so they don’t have to worry about finding a supplier
Paying for super-fast broadband for the best connections for regular communication with home
Regular communication and contact details if things go wrong
Naturally in both these cases, the cost goes on top of their rental cost. There are other steps landlords are taking to entice such students:
Transport from the airport at the beginning of their stay in the UK and transport at the end of their tenancy
Information packs and books on negotiating life in the UK. How to go about getting public transport, and all the things that visitors find difficult
Basket of food items at Christmas or at Easter. If they are from another faith, food traditions at a certain time of year (Eid, Chinese New Year, Passover etc)
STUDENTS REMAIN LUCRATIVE
Of course, international students are not the be all and end all. The student market is currently stable. It remains a lucrative end of the market for landlords. But to attract the much smaller pool of international students, it takes much more effort. International students look for a living experience that make things as easy and convenient as possible.
However, don’t focus solely on Erasmus and other international students. Domestic students are a much larger population.
Moving Home? How to Do the Perfect Home Clearance
25 February 2020 Keith Martin
When it comes to a home clearance, many of us can get overwhelmed by the idea. As, with seemingly endless rooms to clear that are full of stuff, it can feel like your home clearance is just too much to handle.
Well, not to worry, as with our handy guide you’ll be able to perform a perfect home clearance – all with as little stress on you as possible!
1: Organise a Time Frame for Your House Clearance
Often, we get stressed when we don’t have a clear picture of how something will happen in our heads. Which is why it’s so important that we put a time-frame on a house clearance, as from there you’ll be able to backwards plan everything that needs to be done.
So, once you’ve planned a deadline for your house clearance, you will need to give yourself plenty of time to get the work done. Generally, if there are two people undertaking the workload, you should give every room in the home around half a day to clear (remembering to include a garage or outdoor space as a room in your plan).
Of course, if the rooms are very large or cluttered, you may need to allocate more time in your plan.
2: Choose What Belongings You’re Keeping and Donating
A colour coding system will make your life much easier when it comes to your home clearance. Here you’ll be able to easily and cheaply get coloured stickers online, then stick on furniture or items to show what will happen to them. For instance:
Green sticker – keep
Orange sticker – donate
Purple sticker – sell
Red sticker – junk
Then, when it comes to moving items, you’ll be able to easily put everything into separate piles based on what is to happen to them. This will also really help when it comes to getting an estimate for removal or waste services.
3: Be Very Careful Over Documentation
The last thing you want is for a piece of furniture to be sold that contains a document with personal information in it, especially if there’s a chance that document could lead to identity theft. So, it’s important that you look through every piece of furniture, handbags and boxes for any documents that need to be kept or destroyed.
4: Arrange for Pickups
Once you get towards the end of your home clearance, you need to start to plan when and how you’re going to transport belongings, depending on what they’re destined for.
For belongings you want to keep, you will likely need to hire a removal company to move them to their new home. If you have a deadline for your clearance, it’s important that you book these removals in as soon as possible.
Charities will often come and collect large items for donations, again you will need to book this in well in advance to ensure everything gets lifted. Depending on how much stuff you have, you might need to ask multiple charities.
It’s also important to arrange for any rubbish to be collected to. When choosing a company, always look for one that will responsibly dispose of your belongings, reusing and recycling as much as possible, rather than sending to a landfill.
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