Assured Shorthold Tenancy Agreement - Termination before Term Starts

[ukocfan]

I signed a Assured Shorthold Tenancy Agreement with a fix period term, however due to a change in circumstances I need to terminate it. The contract does not say anything about termination before the start date of the term only after. What is my position legally?

[car2403]

I may be in a similar situation myself, as I've just signed one and I may be relocating with work - I know I paid a non-refundable application fee, which I wouldnt get back, but I haven't started the tenancy yet.

 

Will be interested to see what answers you get, as I'm not sure myself

Edited March 27, 2011 by car2403

[bedlington83]

If you signed an agreement (for whatever) why do you think that you can't (or shouldn't) be held to it?

[mariner51]

IMO OP signed a contract and is bound by it's T&Cs

Perhaps OP can provide more deatil eg

Date signed

Agreed moving in date

Date first rent and other moniespaid

 

Ifi is deemed T did not commence, LL has claim for compensation for breach of contract damages and OP cannot claim any deposit paid was not protected IMO

What was OPs 'change in circumstance'?

[car2403]

I'm not certain we've grasped what the OP is asking, here?

 

They have signed an AST agreement and are looking for some advice on if and how they can overcome that in their situation. What we're not to do, here, is to attack the OP for asking the question. A) they aren't the only ones that find themselves in a specific situation like this and b) we are not here to judge them. If you can't help, don't post. If you can, please do.

 

I'm not saying anyone is attacking the OP, but they have came here to be helped, not to be told that they are at fault for their situation happening - that helps no one and doesn't further the cause.

 

In my situation, work relocation is the potential reason I may not be able to fulfil my obligations, which is why I'm asking my employer to pay my rent of 6 months. I suspect the OP's situation is different and they don't have that benefit.

 

I believe that it's possible to get out of the AST agreement prior to it commencing, but you would need to contact the LL and advise of the situation ASAP to enable them to mitigate their losses, here. They may readvertise the property for rent during the same period and find another tenant to take over your obligations. The will probably seek to recover the costs of doing so against you, as that seems reasonable. Of course, then there's the situation where they can't find another tenant - in which case they may well seek to recover all the benefits of the agreement against you, if you aren't able to comply with your obligations under the agreement. How they choose to do that is up for discussion, they'd presumably prefer to negotiate payment with you, or seek Court action if an agreement can't be reached.

 

Just IMHO...

Edited March 27, 2011 by car2403

[rebel11]

Heres a useful guide:- http://www.communities.gov.uk/documents/housing/pdf/138289.pdf

Edited March 27, 2011 by car2403
Enabling the link :)

[MrShed]

I'm not certain we've grasped what the OP is asking, here?

 

They have signed an AST agreement and are looking for some advice on if and how they can overcome that in their situation. What we're not to do, here, is to attack the OP for asking the question. A) they aren't the only ones that find themselves in a specific situation like this and b) we are not here to judge them. If you can't help, don't post. If you can, please do.

 

I'm not saying anyone is attacking the OP, but they have came here to be helped, not to be told that they are at fault for their situation happening - that helps no one and doesn't further the cause.

 

In my situation, work relocation is the potential reason I may not be able to fulfil my obligations, which is why I'm asking my employer to pay my rent of 6 months. I suspect the OP's situation is different and they don't have that benefit.

 

I believe that it's possible to get out of the AST agreement prior to it commencing, but you would need to contact the LL and advise of the situation ASAP to enable them to mitigate their losses, here. They may readvertise the property for rent during the same period and find another tenant to take over your obligations. The will probably seek to recover the costs of doing so against you, as that seems reasonable. Of course, then there's the situation where they can't find another tenant - in which case they may well seek to recover all the benefits of the agreement against you, if you aren't able to comply with your obligations under the agreement. How they choose to do that is up for discussion, they'd presumably prefer to negotiate payment with you, or seek Court action if an agreement can't be reached.

 

Just IMHO...

 

That is spot on.

 

Basically, the "tenancy" element has never commenced and cannot itself be enforced.

 

However, the "contract" element is still in force - and the OP will be liable for the actual financial loss to the landlord for the termination of the contract.

[raydetinu]

I.e. any and all costs the LL has in reletting the flat. agents costs and lost rent while empty; LL is obliged to minimise costs, just cant let it go empty without trying to relet.

[car2403]

That is spot on.

 

Bliddy hell! I totally made that up!

[MrShed]

Well made up!

[Ed999]

My advice is applicable only if the rented premises are entirely within England and Wales, and only if the tenant was granted a shorthold tenancy (under which he [and his spouse/partner/children if any] had exclusive use of at least a bedroom, a kitchen and a bathroom, none of which were shared with another tenant nor with the landlord) and he was over 18 years of age when the tenancy was granted.

 

 

The legal rights of a landlord and a tenant, where the tenant leaves early, are summarised here:

 

Tenant leaves early: whether landlord has a duty to mitigate his losses - new caselaw

 

Note that where the tenant abandons the premises a landlord, suing for rent due, is not under a duty to mitigate his loss by re-letting [Reichman v Gauntlett, Court of Appeal, 2006].

[raydetinu]

Has Ed got a point?

It does seem reasonable that the LL should try to relet, however he has asigned contract and should be due some sort of compensation over and above his expenses.

[Ed999]

Summary of the Court of Appeal decision:

 

Reichman & Dunn -v- Beveridge & Gauntlett

Court of Appeal

13 December 2006

Landlord under no obligation to mitigate loss when seeking to recover rent due under a lease and tenant had abandoned the premises.

 

Source: Transcript [2006] EWCA Civ 1659

 

 

Miss Beveridge (B) and Mr Gauntlett (G) were in practice together as solicitors. They leased offices from Mr Reichman ® and Miss Dunn (D) for a term of five years from January 2000. In February 2003, B and G ceased to practise as solicitors and abandoned the offices. They did not pay the rent due on 25 March 2003 and made no further payments thereafter.

 

In January 2004, R and D sued for the rent arrears due. B and G served a defence contending that their landlords had failed to mitigate loss arising from any non-payment of rent, which they could have done by forfeiting the lease. B and G also argued that the landlords failed to instruct agents to market the premises; failed to accept an offer of a prospective tenant who wanted to take an assignment or a new lease of the offices; and failed to accept an offer from B to negotiate payment of a consideration for surrender of the lease.

 

The county court hearing considered whether it is necessary, as a matter of law, for a landlord to mitigate his loss when seeking to recover rent arrears. The judge held that a landlord was under no such duty. B and G appealed. The circuit judge dismissed the appeal. B and G appealed to the Court of Appeal.

 

 

Decision: Appeal dismissed

 

Held: There are very few cases where an innocent party to a contract (in this case R and D), having chosen not to accept a repudiation of the contract, was prevented from enforcing his contractual right to keep the contract alive and sue for any monies owed. This could only be prevented where damages would be an adequate remedy and where a decision to keep the contract alive would be wholly unreasonable.

 

The court considered whether R and D had acted wholly unreasonably in not finding a new tenant, rather than leaving it to B and G to propose one, or in rejecting a proposal made by B and G. The Court of Appeal decided that R and D had not acted wholly unreasonably.

 

Additionally, if market rent had been lower than the rent stated in the lease, damages would not be an adequate remedy for R and D if they had terminated the lease by way of forfeiture and re-let at a lower rent, because [as a consequence of forfeiting] they could not recover damages to compensate for the loss of rent.

 

Alternatively, if the market rent had been the same or higher, B and G could have taken their own steps to find an assignee. If they had done this, and R and D refused to accept them on reasonable terms, then B and G would have had a statutory remedy under the Landlord and Tenant Act 1985.

 

Finally, there was no authority to show that a landlord could recover damages from a former tenant in respect of loss of future rent after termination of a lease. Therefore, either damages were not an adequate remedy for the landlord, or the landlord would be acting reasonably in taking the view that he should not terminate the lease because he would not be able to recover such damages.

 

 

From Tenant leaves early: whether landlord has a duty to mitigate his losses - new caselaw

[Ed999]

My advice is applicable only if the rented premises are entirely within England and Wales, and only if you were granted a shorthold tenancy (under which you [and your spouse/partner/children if any] had exclusive use of at least a bedroom, a kitchen and a bathroom, none of which were shared with another tenant nor with the landlord) and you were over 18 years of age when the tenancy was granted.

 

 

SHORTHOLD TENANCY AGREEMENTS ARE COMPLEX LEGAL DOCUMENTS: SEE A SOLICITOR FOR LEGAL ADVICE AS TO WHETHER THE AGREEMENT YOU SIGNED ACTUALLY CREATES A FIXED TERM.

 

 

Reichman v Gauntlett (13 December 2006) [above] decided that where the tenant under a fixed term letting abandons the premises a landlord, suing for rent due, is not under a duty to mitigate his loss by re-letting.

 

The tenant argued that the landlord had a legal duty to re-let the premises, in order to thereby reduce the loss of rent which the landlord suffered as a result of the tenant's abandonment of the premises. But this argument failed.

 

 

Landlord re-letting

 

I do NOT say the landlord will refuse to re-let the premises, only that he has that option (due to Reichman v Gauntlett). If the landlord re-lets to new tenants, the rent under the current tenancy will cease to be payable on the date the premises are re-let.

 

 

Tenant Re-letting the premises

 

If the landlord does not re-let, there is nothing to prevent you re-letting the premises yourself. The tenant in Reichman v Gauntlett had overlooked this option; but if you are a tenant in a similar situation then it's an option that is open to you.

 

 

Surrender of Lease

 

Another option open to a tenant in a similar situation is to surrender the lease, something which requires the landlord's agreement.

 

It is essential to record the agreement in writing. A draft deed of surrender that might be adapted for this purpose is on-line at Deed of surrender

 

 

Signing a tenancy

 

A legally binding tenancy is created if you sign a written contract, agreeing to rent premises that constitute a self-contained dwelling for a period not exceeding 3 years.

 

Such a contract is binding once signed, even if NO money changes hands (e.g. because the agreement is to pay rent in arrear rather than in advance), and even it takes effect at a later date (hence the tenant has not yet actually moved in).

 

A tenancy for a fixed term exceeding 3 years is not valid unless granted by a deed (a contract signed under seal and witnessed); but the landlord could sue you for damages for breach of contract if you sign a contract agreeing such a tenancy but then refuse to sign the deed, even though specific performance will not normally be ordered against a tenant.

 

A periodic tenancy, i.e. any tenancy for an uncertain period, is treated as a monthly tenancy if the rent is payable monthly, and is valid without a deed, even though it is potentially capable of lasting longer than 3 years, and even if it actually lasts longer than 3 years.

Edited April 21, 2011 by Ed999