Overpayment of Rent

davidmorrison

Hi.

I have purchased the house that I was renting. The new contract for tenancy started in July 2018 as a 6 month AST with 6 months being paid up front.

The sale dragged on for a long time, and although completed, got to the point that the landlord served a section 21 to remove us in case it didn't go through. The house sale eventually went through in October.

We have since got the deposit back but are in dispute over the overpayment of rent for November and December.

The contract agreement stated that the rent would be in advance, 6 months and non-refundable if the tenancy was terminated. However, Section 21C of the Housing Act 1988 seems to contradict with this part of the contract, stating that tenants are owed rent rebates from landlords if:

a) they have been served a section 21 (which we have had)
b) tenant paid in advance for the period (which we did)
c) the tenant did not live in the house for one or more days of the tenancy (the house was no longer the landlords, thus we were not his tenant)

Just wondering if anyone has had this before, knows about rebate and rent or understands what to do next?

This was not entirely unexpected of the landlord. They thought we should be forced to pay 6 months in advance so they could make more money as we didnt offer the full asking price - even though their agent advised them it was up for too much money in the first place. They deemed it as 'recouping money on the house sale'

Regards


PoI: The contract also has the usual bits including that state that any contract agreements are nullified if they conflict with the Housing Act

G_M

The S21 i irrelevant. You were not evicted by a court following expiry of the S21- you agreed an Early Surrender of the tenancy with the landlord.

What were the terms of the ES that you agreed?

(and why on earth did you pay 6 months in advance if you were planning to end the tenancy....)

Slithery

G_M wrote: »

you agreed an Early Surrender of the tenancy with the (previous) landlord.

Did they?

I would have thought that they agreed an early surrender with themselves (as their new landlord) upon completion. The matter of the rent apportionment should have been dealt with by the solicitors when the sale contracts were being drawn up.

Or have I misunderstood something?

G_M

well either way the S21 was not the reason the tenancy ended.


Yes, I agree - it should have been discussed if not in context of surrendering the tenancy then in context of the sale/purchase.

saajan_12

davidmorrison wrote: »

Hi.

I have purchased the house that I was renting. The new contract for tenancy started in July 2018 as a 6 month AST with 6 months being paid up front. - when was the prospect of purchasing the house first discussed? Likely before July 2018, so why did you sign a fixed term tenancy AND pay rent upfront if the expectation was to purchase the house possibly before the 6 month were up?

The sale dragged on for a long time, and although completed, got to the point that the landlord served a section 21 to remove us in case it didn't go through. The house sale eventually went through in October. - okay, but was there ever a court possession order? the S21 notice itself is fairly meaningless if they don't actually move to evict you on the back of it.

We have since got the deposit back but are in dispute over the overpayment of rent for November and December. - well what did you expect the day before exchange? Why wasn't it negotiated alongside the purchase?

The contract agreement stated that the rent would be in advance, 6 months and non-refundable if the tenancy was terminated. - ah, at a time it was clear there was a possibility of terminating early, hence weakening the argument that this wasn't a specifically negotiated clause. Sounds like the intention was the ex LL keeps the rent no matter what. However, Section 21C of the Housing Act 1988 seems to contradict with this part of the contract, stating that tenants are owed rent rebates from landlords if:

a) they have been served a section 21 (which we have had) - check
b) tenant paid in advance for the period (which we did) - check
c) the tenant did not live in the house for one or more days of the tenancy (the house was no longer the landlords, thus we were not his tenant)- ah but you weren't evicted based on the S21, if there was no formal surrender then the purchaser steps into the shoes of your ex LL and the tenancy continues, with you (tenant) indeed living there as your (owner) landlord

Just wondering if anyone has had this before, knows about rebate and rent or understands what to do next?

This was not entirely unexpected of the landlord. They thought we should be forced to pay 6 months in advance so they could make more money as we didnt offer the full asking price - even though their agent advised them it was up for too much money in the first place. They deemed it as 'recouping money on the house sale'- irrelevant what the agent thought once you agreed and exchanged on that price.

Regards


PoI: The contract also has the usual bits including that state that any contract agreements are nullified if they conflict with the Housing Act

Three interpretations:
1) When you purchase a property, you do so with any liens, leases etc it is subject to. In your case, the property is still subject to a tenancy, and you step into the shoes of the landlord. Any rent splits should be agreed as part of the sale contract. So, the 3rd condition you quote of the Housing act 21C is not satisfied as you were still a tenant, albeit the landlord changed.

2) You step into the shoes of your LL upon completion so any recompense should be from your new landlord, ie yourself.

3) If the tenancy was mutually terminated before / upon completion, then any terms and amendments to the original tenancy would need to be specifically negotiated. The original tenancy stated rent not returnable. In this case, the tenancy ends by agreement, not by Section 21. If you want it to be returned or pro rata'd in any way, this should ahve been separately agreed.

Effectively, either there was a mutual surrender of the tenancy or it continued and you became your own landlord so can only claim from yourself. In either option, the time to negotiate would be with the early surrender or sale negotiation.

If there was no discussion, I think the assumption would be no refund.

theartfullodger

(Arguably) ...you (as new landlord) owe yourself (as tenant) any refund. See s.3 Landlord and Tenant (Covenants) Act 1995.
http://www.legislation.gov.uk/ukpga/1995/30/section/3

(Which says when a new landlord takes over he takes on the benefits and liabilities of the old landlord.
- so "old" landlord/owner owes you nothing....

However, you wouldn't fully become new landlord unless you have served yourself notice(s) compliant with s48 & s3.
- s48 - or no rent due.
- s3 - if not sorted fast enough, possible fines and criminal record.

Do let us know when the case gets to court!

G_M

theartfullodger wrote: »

.

Do let us know when the case gets to court!

Better still let us know in advance when the date is. I'd love to attend as a member of the public and see what arguements are put forward on each side, and how the judge rules.