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legally obliged to minimise the tenant losses

I fear I might be exposing my naivety with this query!

Can someone provide a link or informed comment that the "Subject Title" has legal merit.

I have heard this numerous times and can see no reason why LL would not allow this, but where does it state that it is a "Legal Requirement" to minimise tenant losses?

Could it be Chinese Whispers!

Notlob
Notlob
«1

Comments

  • dmg24
    dmg24 Posts: 33,925 Forumite
    What exactly do you mean by 'to minimise the tenant losses'? In what situation are you referring to?
    Gone ... or have I?
  • Guy_Montag
    Guy_Montag Posts: 2,291
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    Notlob wrote: »
    I fear I might be exposing my naivety with this query!

    Can someone provide a link or informed comment that the "Subject Title" has legal merit.

    I have heard this numerous times and can see no reason why LL would not allow this, but where does it state that it is a "Legal Requirement" to minimise tenant losses?

    Could it be Chinese Whispers!

    Notlob


    Not it's not:
    3.49 We would object to a term in a fixed term tenancy that requires a tenant who leaves early, without the landlord's agreement, to pay rent for the remainder of the period in full. Although a landlord is normally entitled to the rent for the whole of the term, whether or not the tenant remains in occupation, a tenant may have a valid defence to a claim for rent. In those circumstances such a term would be an excessive penalty. This would also allow landlords to escape their obligation to reduce (or 'mitigate') their loss, by re-letting the property to another tenant.

    OFT Guidance on unfair terms in tenancy agreements


    :cool:
    "Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
    Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
    "I think I'll become an alcoholic," said Betty.
  • Notlob
    Notlob Posts: 335 Forumite
    Thanks Guy_Montag, very useful link.

    I see it's a "guide" only, although from a heavyweight such as the OFT.

    It seems crazy to me that a LL wouldn't limit their losses.

    Notlob
    Notlob
  • Guy_Montag
    Guy_Montag Posts: 2,291
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    Notlob wrote: »
    Thanks Guy_Montag, very useful link.

    I see it's a "guide" only, although from a heavyweight such as the OFT.

    It seems crazy to me that a LL wouldn't limit their losses.

    Notlob

    It's not the LL's losses though it's the tenant's - so a LL could, if this was not the case, continue to take rent from the tenant without making any effort to replace them.

    I covered a bit of this sort of thing on an H&S course, the same basic principles apply. As I understand it a guide like this from the OFT (or as in the case I was covering the HSE) is considered best practice - it is possible to argue in court that in your case the circumstances are special enough to have your own procedures & these are fair (or safe), but obviously it's extremely difficult.
    "Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
    Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
    "I think I'll become an alcoholic," said Betty.
  • coal9011
    coal9011 Posts: 208 Forumite
    Yes Notlob, you are quite right.

    I considered bringing a claim using the "Unfair Terms in Consumer Contracts Regulations 1999" in a Landlord & Tenant dispute.

    However, a solicitor friend advised against this and sure enough in Court the District Judge would not allow this saying that there was sufficient scope in the exsisting Housing Act (1985) to deal with the matter. It seems that judges are reluctent to class a "tenancy agreement" or "lease" as a Consumer Contract so the OFT guide does not apply.

    In my case the Landlord also got himself tied-up with the very complicated legal doctrine of "Estopple" which greatly helped my case and turned out to be very expensive for my LL

    For those interested here is just a brief dictionary - not legal - definition of the word "Estopple": the principle by which a person cannot assert something contrary to their previous statements or to relevant judicial determination.
  • real1314
    real1314 Posts: 4,432 Forumite
    The roots of this are established through case law.

    If a tenant left after 3 months and notified the landlord, with 3 still remaining, and refused to pay any further rent after leaving, the landlord would have to sue for the unpaid rent.
    The courts would not rule for the full rent unless the landlord could show that they had taken steps to mitigate their losses by attempting to re-let the property.
  • silvercar
    silvercar Posts: 46,865
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    Just because the OFT, or any other consumer body, deems a contract term "unfair" it does not make it illegal.

    This is the basis of the current legal action on bank charges. The charges the bank made were deemed to exceed the work involved (and possibly a reasonable profit element) and so unfair. They were not deemed illegal. The current action that will eventually reach court is to determine whether the charges are actually illegal.

    Just because a contract term is deemed unfair it is still a legal term. As such you would have to go to court to get the term rendered illegal and unenforceable. A landlord may back down an accept that the term was too onerous but this is not automatic.

    The requirement to do all you reasonably can to mitigate losses would be a requirement the courts would expect.
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  • Guy_Montag
    Guy_Montag Posts: 2,291
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    Interesting stuff - especially you Coal. Are you saying that the OFT have no powers in this case? What do judges consider ASTs to be if not consumer contracts? Oooh! Update, was trying to find out for myself when I came across this:
    Tenants and new home buyers protected from unfair contract terms

    OFT welcomes Court of Appeal Judgment

    29/04 24 February 2004
    Tenants in both private and public sector accommodation and consumers buying new homes from developers are protected by the Unfair Terms in Consumer Contract Regulations (UTCCRs), the Court of Appeal confirmed today.
    Continues
    Looks like things have changed.


    Point to note silvercar - the OFT isn't just any consumer body they are a government department, which makes them pretty powerful.
    "Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
    Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
    "I think I'll become an alcoholic," said Betty.
  • The problem is that the agreement has been reached.

    Maybe the LL would have demanded a higher rent in return to terms that the OFT consider fair. For example, the LL may have sought a tenant for 12 months because, due to whatever reason (perhaps to travel the world), he did not want to have to find and vet another tenant within 12 months. Maybe he wanted to repossess after 12 months and if 8 months had passed, it would not be possible to find a tenant willing to take a 4 month AST.

    I guess this is not likely to be the case most of the time and that, in this case, the LL should reiterate the 12 tenancy requirement in BOLD UPPERCASE.

    :)

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • coal9011
    coal9011 Posts: 208 Forumite
    I think that judges - to a degree - seem to make up there own rules. I suppose the DJ in my case (less then 2 months ago) identified mine as a landlord and tenant dispute and desided that he was going to adjudicate using Housing law rather then Consumer Contract law even though the dispute was over the terms of the tenancy "agreement".

    I don't know how much I can say about it on this forum as the first part of the court proceeding are over (2 failed claims for possession by the LL) however my counterclaim for damages from my defence to his claim for possession is still to be heard before the end of Jan 2008.

    Its all about the Landlord granting a long term to the tenancy - for reasons to benefit him - then trying to end it early. Also the tenancy agreement contains 2 conflicting ways of giving notice 1) at the end of the term of the tenancy (21 years) 2) the other in the form of a 6 monthly break clause. Also the LL mis-dated the agreement which ment that the first 6 monthly break clause did not allow the tenancy to be able to run for the minimum period required by law - that being 6 months.

    A sober lesson for all you LL's out there. Your tenancy agreement is a very important document ..... get it right!
    Mistakes or trying to minipulate it may cost you dear. So far the court has ordered my LL to pay my costs to date (£4,500) stupidly he's got rid of his own solicitor because he's had a bill from them for £2,500 and when my damages and further legal costs are added my barrister says the LL could be looking of a bill of nearly £20,000! By the way, I have been his tenant for 9 years.
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