Amount of deposit in dispute: £333
Dispute initiated by: Tenant
This month’s case looks at a dispute over a claim made by a landlord against the tenants’ deposit for rent in lieu of notice.
The landlord and tenants entered into a fixed term assured shorthold tenancy agreement for the period from and including September 26, 2014, to and including March 25, 2015.
The landlord provided a signed tenancy agreement which contained a clause requiring the tenants to provide a minimum of one month’s written notice to the landlord in the event the tenants wanted to vacate the property at the end of the fixed term.
The tenants left the property on March 25, 2015, the last day of the fixed term, without giving notice to the landlord.
The landlord argued that due to the failure by the tenants to give the required notice this meant that he was entitled to claim a deduction from the deposit in lieu of one month’s rent.
In this case the adjudicator noted the clause within the tenancy agreement; however the tenant of a fixed term assured shorthold tenancy is entitled to end the tenancy by giving the landlord vacant possession at the end of the fixed term.
In general, no notice of termination is necessary, unless the term initially granted gave rise to a contractual, rather than a statutory periodic tenancy. As the tenants gave vacant possession at the end of the fixed term, the tenancy – and with it the tenants’ liability to pay rent – ended on the last day of the fixed term.
No award was made to the landlord for the rent claimed. The tenants were however in breach of their contractual obligation to provide one month’s notice – the remedy for which would be compensation, which did not form part of the landlord’s claim.
So what are the key points here?
Whilst it is not unreasonable for a landlord to ask a tenant to make their intentions known a month before the tenancy ends (to ensure that the landlord has sufficient warning of the tenant’s intention to leave, and to provide an opportunity to begin looking for a new tenant in good time to reduce the risk of the property being empty for an extended period) this does not create a liability to pay rent if notice is not given.
Any claim for compensation would be for the amount that would put the landlord back into the position he would have been in if the tenants had served the required notice.
The landlord has an obligation to take reasonable steps to keep losses to a minimum, for example by checking with the tenants before the end of the fixed term whether they intended to stay.
As in all claims for compensation, the burden of proving the loss rests on the claimant. So, the landlord would need to show not only that the tenants did not give notice of their intention to vacate, but also that this failure caused financial loss.
In summary, the tenants were not liable for payment of rent beyond the fixed term but may have been liable to a claim for compensation for breach of contract, if the landlord could show that the tenants’ failure to give notice resulted in loss and the deposit clause within the tenancy agreement made provision for such a claim.