Hello all. My first post as a Landlord. Although a contract has been signed and the deposit paid, my prospective tenant has backed out at the last minute.
Do you know if I can claim from the deposit because of the obvious loss of rental income as I now need to re advertise?
I’m a relatively inexperienced landlord and would love to know what some of you would do in this situation. Many thanks in advance for any replies.
1 Like
[Edited to add a cautionary note: Apparently what I’ve written here isn’t actually true because although they did sign the contract, they haven’t moved in]
They haven’t backed out at all. They signed a contract. The terms of that contract should allow for early surrender (which is what they are now obliged to do). You are only obliged to accept that surrender if you agree to the terms. The terms would ideally be that they compensate you for readvertising and costs for processing another application e.g. referencing. They are also obliged to pay the first month’s rent up front (along with deposit but you haven’t mentioned that) and would continue to pay rent until a new tenant is found.
That’s a lot of negotiating power. Worth using it wisely.
And it’ll need to be a proper deed of surrender with all compensation detailed, two copies of which are signed and witnessed by you both. Give them one and keep the other.
If they’ve signed the tenancy agreement but not moved in, then they have a contract, but not a tenancy. You can claim for your losses against the deposit or sue them for the same, but as they don’t yet have a tenancy, you would have to mitigate your losses by immediately looking for a replacement tenant.
2 Likes
ah right… didn’t know that. Thanks for clarifying David. You’ve mentioned that the OP can claim for losses but not specified these. Would loss of first month’s rent be included? What if their applicant had paid the first month’s rent already?
If a new tenant moved in in 10 days, the loss would be 10 days rent, plus the costs of advertising, referencing the new tenant etc. Ie costs incurred. If the ‘withdrawn tenant’ had already paid more, then the Landlord would refund the remainder.
You cant just charge 1 months rent, if you have only lost 10 days rent.
It might take 2 months, but the Landlord must be pro-active to minimise their losses.
1 Like
In theory the loss could be the rent for the whole term, but the landlord would have to show that it was not possible to find another tenant. In practice its likeky to be losses of rent and possibly utility/CT costs etc until someone moves in as Karl says.
1 Like