Tenants have signed agreement, paid holding deposit and fee to Reposit.
Tenancy begins 6th April but have just emailed to cancel the agreement due to family illness.
First time user of Openrent and not sure how to proceed.
Is it sufficient to reply to his email agreeing to cancel the tenancy agreement?
No, replying by email is not sufficient if you decide to accept their surrender. You need to get a deed of surrender witnessed which you sign two copies of, one for you to keep and one for them. Then theyâre free to go. But you have obviously lost out on some income here because you will have to readvertise and will have a longer void. You might want to come to some arrangement whereby they cover some of that cost in exchange for being let off the 6? 12? months rent that theyâve committed to paying. You havenât mentioned if theyâve paid the first monthâs rent. If so, you could keep that in lieu. Whatever details you agree should go in the deed.
Iâve no experience of Reposit. Others will have to advise what you do about that, but you should return the holding deposit anyway now that theyâve signed.
A deed of surrender isnât needed as the tenancy hasnât yet begun. What you have is a contract to supply with the applicant, although Iâm not sure whether the holding deposit would count as consideration and whether they would be required to pay the first months rent before the contract was made. Either way, there is no point trying to hold onto them. If you have a clause in your contract that notices can be served by email, then you can reply accepting that the contract is now terminated. If not, ask them to write to you by snail mail and you will reply to that in kind.
ah right, thanks for clarifying David. I now understand the difference between the contract signing and the move in date. Theyâre usually one and the same for me which is why I didnât realise that they required a different approach.
How are they going to hold them to account for potential loss of income without a deed though if they havenât already paid more than a holding deposit?
They can only sue them for compensation if theres a contract, which Im not sure about. Even then they would have to mitigate their losses as theres no tenancy. In practice the amount would be quite small and probably not worth bothering with.
I was assuming that the OP had taken the property off the market and would now have to pay to readvertise and would have suffered some losses with a void from the 6th until a new tenant can be found which would otherwise have been filled. And thatâs only material losses.
Thank you for your replies. It seemed like an awful lot of trouble getting a deed signed when itâs the tenant cancelling.
Yes I am out of pocket rent wise as there was a 3 week wait from the prospective tenant signing the agreement and the start of the tenancy. Then they cancelled 5 days before the tenancy was due to begin.
So now I will lose more rent while I am advertising again. But Iâm prepared to let it go. I shall only deduct the ÂŁ40 for the references from the holding deposit when Openrent send it to me.
Bad stuff happens to everyone, thatâs life.
If the tenant cancelled you can keep all of the holding deposit
Yep âthatâs my take - I explain upfront that the holding deposit is none refundable if they do not proceed for any reason whatso ever inc failed referencing [which I of course had to pay for, and my darlinâ scammers musta knew they had CCJ, and gave false info so⌠] duhâŚour time is valuable too.
Jillhughes40, your approach may not be legally water-tight. There are some circumstances where a holding deposit must be refunded. For example, unless you have written evidence that the applicant lied before failing referencing, you would not necessarily be able to keep the deposit. You should also have a written holding deposit agreement signed by the applicant or it becomes easy for them to force you to repay the money.
I am told that that the Openrent RentNow process does deal with these things, but if you manage the letting yourself, you must have the right processes in place.
I would take a different approach. Firstly âyou are deeply saddened to hear their news and how difficult that must beâ. Secondly âyou will put in every effort to work with them and get a replacement tenant just as soon as you can to minimise the sum you will be required to withholdâ. message: you care and you are working in their best interests
Later: When you sign up someone new take the difference between the two start dates and deduct that. Inform the cancelled tenant of the amount of rent withheld and add if that if they just confirm acceptance you will waive any admin / penalty fees.
Just get on and re rent it without delay, these people are already in the past and itâs statistically just tosh anyway, people just change their mind.
The worst case I had was a nurse who had split up from his wife, he was crying and desperate and called me every other day for 10 days saying he had the money coming through until the day and he was a no show and when I rang him he said he just got back with his wife and wouldnt be paying anything. I had an empty flat for a couple of weeks and a well earned lesson. - recent split ups are a red flag and best avoided.