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Breaking Tenancy Agreement....


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#1 LC1

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Posted 15 April 2012 - 09:02 AM

Hi,

to cut a long story short, I have had to break my 12 month tenancy agreement to move for work.

The complicating factor is that I was under the impression that I had a 6 month break clause in the contract, given that I had specifically requested one and been assured that "no problem, it's standard practice" by the LA.

On attempting to notify them of my intention to use break at the 6 month period, I was informed that there was no such break clause. Feeling stupid for not having checked the contract properly (this was a stressful time, but no excuse and have learned my lesson!), I reluctantly accepted that I would be financially liable for the rent until they could find new tenants and release me from the contract.

Now, here's the rub: It seems that the LA is being really slack in trying to get us viewings on the flat. About 5 in 5 weeks.

It also seems that there is a surplus of rental properties in my area compared to when we rented, and I fear that we paid over the odds too (like I say we were in a stressful situation and needed a flat urgently, didn't feel confident about haggling price down on a flat that had only just come on...)

All in all, it seems to me that the flat won't rent unless the LL agrees to a price reduction, which he doesn't want to do (well, why would he when we're on the hook for full amount!?).

I'm going to be paying two rents from the beginning of May unless they find new tenants soon.....my question is what sort of consequences could I expect if I just stopped paying the rent on my current place?

I'm assuming some sort of credit blacklisting? But I can't help thinking it's the only thing that will get the LL's and LA's attention!? He'll have to drop the rent anyway after my contract expires...Or any other tactics to consider?

Ta in advance for your wise insights... :)

#2 tim123

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Posted 15 April 2012 - 10:21 AM

Hi,

to cut a long story short, I have had to break my 12 month tenancy agreement to move for work.

The complicating factor is that I was under the impression that I had a 6 month break clause in the contract, given that I had specifically requested one and been assured that "no problem, it's standard practice" by the LA.

On attempting to notify them of my intention to use break at the 6 month period, I was informed that there was no such break clause. Feeling stupid for not having checked the contract properly (this was a stressful time, but no excuse and have learned my lesson!), I reluctantly accepted that I would be financially liable for the rent until they could find new tenants and release me from the contract.

Now, here's the rub: It seems that the LA is being really slack in trying to get us viewings on the flat. About 5 in 5 weeks.


The bad news for you is that a (now, not quite so recent, court case) defined the total rent due on a letting contract as a "debt" meaning that the common law requirement for a harmed person (in this case the LL) to mitigate their loss from a breach by the other party (you), doesn't apply.

So, in law, the agents are obliged to do absolutely nothing to extricate you from your position, and if you want to find a replacement tenant your best course of action is to try and find one for yourself.

Sorry that I can't be more helpful

tim

#3 erat_forte

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Posted 15 April 2012 - 10:22 AM

... I was under the impression that I had a 6 month break clause in the contract, given that I had specifically requested one and been assured that "no problem, it's standard practice" by the LA....


Is this not a verbal contract, that they are legally bound by?
CAESAR AD ERAT FORTE BRVTVS ADSUM IAM CAESAR SIC INTRA LIBUS BRVTVS SIC INTRAM

#4 porca misèria

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Posted 15 April 2012 - 01:33 PM

Don't the horror stories from a landlord's side involve tenants who just disappear and can't be traced? Would that be possible/tempting?

Many years ago I was in a slightly comparable position. Landlord (having evidently taken advice from agent) said he'd sue for the full rent, but would waive that right if I forfeited the deposit. I accepted that compromise. In practice I suspect neither of us could've hoped for better: even if we had legal rights against each other, the cost of enforcement (and in his case, of tracking me down) would've been prohibitive.

#5 zebbedee

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Posted 15 April 2012 - 01:58 PM

Worst case if tim )you got a linky) is right, you need to find someone and get them in, if that means they pay a portion of the rent and you cover the difference then that what is needed, you can offer a pros[ective tenant a low ball rent to get them in and reduce your own liability rather than be paying the full rent for 6 months.

Edited by zebbedee, 15 April 2012 - 01:59 PM.

As I wandered in the darkness a voice came unto me, it said "smile, be happy, things could get worse". So I smiled and was happy and behold, things did get worse.

"Credit is indeed vital to an economy, but it does not constitute an economy within itself. ... When businesses borrow to fund capital investments, the extra cash flows that result are used to repay the loans. When individuals borrow to spend, loans can only be repaid out of reduced future consumption."-Peter Schiff, Jan 19 2009; <a href="http://www.321gold.c...iff011909.html" My link

"The bold effort the present bank had made to control the government... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."-Andrew Jackson on the Second Bank of the United States

"The problem with socialism is that eventually you run out of other people's money."-Margaret Thatcher

"If tyranny and oppression come to this land, it will be in the guise of fighting a foreign enemy. Of all the enemies to public liberty, war is perhaps the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. The loss of liberty at home is to be charged to the provisions against danger, real or imagined, from abroad." - James Madison

"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof."
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#6 opt_out

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Posted 15 April 2012 - 04:14 PM

If you accept that you are going to have to pay for the mistake, find out how much to buy yourself out of the contract.

#7 Flopsy

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Posted 16 April 2012 - 02:45 AM

Do you have any proof that you asked for a break clause in the AST and that the agent didn't add one?
Are there any emails or correspondence between you and the agent on this that you could use in court?
Where is your bond held - is it with a scheme?

I'm just thinking of some legal advice I took in a similar situation but this was before the latest bond regime

If you leave the first recourse your LL will have is to your bond. Have you spoken to your LL to see if you can come to some agreement rather than talking to the agent?

Sometimes you will find that the LL is quite reasonable and it is the agent that is causing the problems.

If it did all go horribly wrong and you had to leave the LL would go for your bond first of all and then would have to look at suing you for the rest. That could be in the small claims court for example. It depends as well if you simply stopped paying your rent and abandoned the flat.
.
The Landlord would still have to prove in court (if they decided to take this option) that they had suffered a loss and they would be expected to try and mitigate their loss. For example if they accepted a new tenant for a lessor amount and they sued you for the difference. If they had notice that you were leaving and then turned down tenants then it could be argued that you would not be reasonable for the full amount but just the difference.

I'd approach the LL and try and come to a resolution. They do have some responsibilities here on their losses and may not be interested in court. That was the legal advise I received but it was a few years now and in my case I didn't have to use it as the circumstances changed for me and we stayed on at the flat.

#8 tim123

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Posted 16 April 2012 - 11:07 AM

.
The Landlord would still have to prove in court (if they decided to take this option) that they had suffered a loss and they would be expected to try and mitigate their loss. For example if they accepted a new tenant for a lessor amount and they sued you for the difference. If they had notice that you were leaving and then turned down tenants then it could be argued that you would not be reasonable for the full amount but just the difference.


Wrong.

As I posted above - a recent court case (which no, I can't find a link for), decreed that the oustanding due rent was a *debt* and that, as such, no mitigation by the creditor was required.

tim

#9 Flopsy

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Posted 17 April 2012 - 12:59 AM

If you find that link could you please post it Tim? I've done a search and can't find anything.

My legal opinion was a few years ago and I'd be interested in that case.

Thanks!

#10 zebbedee

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Posted 17 April 2012 - 03:01 AM

If you find that link could you please post it Tim? I've done a search and can't find anything.

My legal opinion was a few years ago and I'd be interested in that case.

Thanks!

I found this
http://www.consumera...es- new caselaw
Apparently quite an old decision.
but won on appeal
http://www.letlink.c...tlett-2006.html

I'm not a lawyer but is the final appeal saying that the LL had a duty to mitigate the loss but that if a tenant had not been found would have to sue for each rental installment as it fell due.

Or is there some other case, eg a residential tenant usually cannot sublet.

Edited by zebbedee, 17 April 2012 - 03:08 AM.

As I wandered in the darkness a voice came unto me, it said "smile, be happy, things could get worse". So I smiled and was happy and behold, things did get worse.

"Credit is indeed vital to an economy, but it does not constitute an economy within itself. ... When businesses borrow to fund capital investments, the extra cash flows that result are used to repay the loans. When individuals borrow to spend, loans can only be repaid out of reduced future consumption."-Peter Schiff, Jan 19 2009; <a href="http://www.321gold.c...iff011909.html" My link

"The bold effort the present bank had made to control the government... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."-Andrew Jackson on the Second Bank of the United States

"The problem with socialism is that eventually you run out of other people's money."-Margaret Thatcher

"If tyranny and oppression come to this land, it will be in the guise of fighting a foreign enemy. Of all the enemies to public liberty, war is perhaps the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. The loss of liberty at home is to be charged to the provisions against danger, real or imagined, from abroad." - James Madison

"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof."
John Kenneth Galbraith

#11 Small Potatoes

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Posted 17 April 2012 - 09:45 AM

I found this
http://www.consumera...es- new caselaw
Apparently quite an old decision.
but won on appeal
http://www.letlink.c...tlett-2006.html

I'm not a lawyer but is the final appeal saying that the LL had a duty to mitigate the loss but that if a tenant had not been found would have to sue for each rental installment as it fell due.

Or is there some other case, eg a residential tenant usually cannot sublet.


For a similar reason we have had to recently take legal advice on our rental property (but in our case it's that the letting agency is trying to back-track on a break clause) - the property solicitor said that the landlord does have to try to mitigate his losses and the courts would frown on him if he, say, hiked the rent up to a level not supported by the market.

#12 porca misèria

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Posted 17 April 2012 - 10:10 PM

For a similar reason we have had to recently take legal advice on our rental property (but in our case it's that the letting agency is trying to back-track on a break clause) - the property solicitor said that the landlord does have to try to mitigate his losses and the courts would frown on him if he, say, hiked the rent up to a level not supported by the market.

It could be a Very Good Idea to gather and keep some record of rental prices for similar properties in the area right now.

A set of rightmove and zoopla search results, and a page of local paper on property-ads day.

#13 LC1

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Posted 18 April 2012 - 02:24 PM

Thanks to everyone for your considered replies. I've been without internet unexpectedly for a few days, hence why I haven't been responding to individual posts...

And as it transpires, it appears as though the flat has been rented! B)

I've been printing off ads to put around the block and putting free ads on gumtree etc,, but it seems like the agents finally came good with a couple who viewed at the weekend.

Thanks for all the advice, it hasn't been wasted - I'm determined to brush up on some of the finer points of tenancy law, break clauses and contracts etc.

Already I've been proactive with my new LA whom I asked to send me a draft copy of the tenancy contract. It's a brand new flat and I noticed that they had not included any clause to allow for fair 'wear and tear'. When I asked them to clarify their policy in an email, they got back to me by phone to tell me that they don't expect a pristine flat at the end of our tenancy, but as long as there are no great big scratches in the walls/floors etc....

But the suspicious part of me can't help thinking that they phoned rather than emailed so that there wouldn't be a hard copy of this 'policy' that I could refer back to if necessary in the future....?

Thanks again wise HPCers!




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