Fixed term rental contract default

Comms69

Simonr66 wrote: »

No, but it does create a contract and once signed and agreed by both parties become binding.
An extract from this web source https://www.thehouseshop.com/property-blog/when-does-a-tenancy-agreement-become-legally-binding/11898/


When Does a Rental Contract Become Legally Binding?

A tenancy agreement is just like any other contract, so as soon as both the tenants and landlord have signed the agreement, it becomes a legally binding contract. While the contract will become legally binding as soon as all parties have signed, this does not mean that the tenants are liable to start paying rent from this date. The contract will usually specify the move in date for the tenants and the date when the first rental payment is due.
If you have any concerns about the contents of the contract, or if you take issue with a specific clause in the agreement, you should discuss this with the other party before you sign on the dotted line. Once you add your signature to the document you are agreeing to uphold your duties and responsibilities as they are written in the contract, and it can be incredibly difficult to change or edit the contract once all parties have signed – so make sure you’re happy with everything contained in the tenancy agreement, and don’t forget to read the small print.

No-one disputed that.


But there is a principle in law, that any losses due to a breach of contract must be mitigated.


- Whilst I appreciate the simplistic explanation provided. I fail to see your point

System

Comms69 wrote: »

No-one disputed that.


But there is a principle in law, that any losses due to a breach of contract must be mitigated.


- Whilst I appreciate the simplistic explanation provided. I fail to see your point

My point is the prospective tenants decided to not move in after signing the contract and by doing this are still responsible for any rent, council tax and utility payments up until the point the landlord secures a new tenant that move in or the end of the fixed term which ever is soonest.


The OP asked how he stood legally and once signed a contract becomes legally binding including any lawful clauses stipulated. I don't know how else to put it.


Of course the landlord would have to show that he mitigated any losses that's not in dispute.

G_M

As explained, and as your own link confirms, there is a distinction between a contract, and a tenancy.

Simonr66 wrote: »

No, but it does create a contract and once signed and agreed by both parties become binding.
An extract from this web source https://www.thehouseshop.com/property-blog/when-does-a-tenancy-agreement-become-legally-binding/11898/


When Does a Rental Contract Become Legally Binding?

A tenancy agreement is just like any other contract, so as soon as both the tenants and landlord have signed the agreement, it becomes a legally binding contract. While the contract will become legally binding as soon as all parties have signed, this does not mean that the tenants are liable to start paying rent from this date. The contract will usually specify the move in date for the tenants and the date when the first rental payment is due.
If you have any concerns about the contents of the contract, or if you take issue with a specific clause in the agreement, you should discuss this with the other party before you sign on the dotted line. Once you add your signature to the document you are agreeing to uphold your duties and responsibilities as they are written in the contract, and it can be incredibly difficult to change or edit the contract once all parties have signed – so make sure you’re happy with everything contained in the tenancy agreement, and don’t forget to read the small print.

Yes the contract becomes binding from the point it is agreed (usually by signing).
But the tenancy does not start till the tenant moves in on the start date.


If he does not move in, no tenancy is created (though the contract is still binding: hence the right to claim consequential losses (mitigated) for any breach).

CIS:

They are liable only if they actually hold/held a tenancy with a term of 6 months or more - that way they meet the definition of holding the material interest and become the 'owners' for council tax purposes. On that basis they don't have to be (or have been) resident to be held liable. It is the same overall concept at that in Leeds v Broadley.

I note that Leeds v Broadley applies to tenants who have left a tenancy early, and the distinction in liability between a periodic and a fixed term tenancy. In this case the tenants never took up occupation so the case would surely not apply?



Where there is no tenancy and never was, as here, but there is a contract for a 6 month tenancy, I doubt CT would be due from the tenant?

Geordielad

Although I'm not grateful for all your replies I'm somewhat confused.
Are they liable for the rent from the day they should have moved in is basically what I'm asking. I apologise if I sound ungrateful, I'm certainly not, but could I ask for a more simplistic answer please?
Are they responsible for the rent until I find another tenant or not?

Geordielad

CIS wrote: »

Assuming England or Wales

They are liable only if they actually hold/held a tenancy with a term of 6 months or more - that way they meet the definition of holding the material interest and become the 'owners' for council tax purposes. On that basis they don't have to be (or have been) resident to be held liable. It is the same overall concept at that in Leeds v Broadley.


If there was no tenancy of 6 months or more than they don't hold a material interest and would only be liable if they were actually resident.

Thanks CIS , they signed to take the tenancy for 12 months.

Comms69

Geordielad wrote: »

Although I'm not grateful for all your replies I'm somewhat confused.
Are they liable for the rent from the day they should have moved in is basically what I'm asking. I apologise if I sound ungrateful, I'm certainly not, but could I ask for a more simplistic answer please?
Are they responsible for the rent until I find another tenant or not?

Sort of.


You have a contract with has been broken.


Yes you can reclaim some of your losses as a result of that breach.


BUT you must act swiftly if trying to fix the problem by finding new tenants.


(the law isn't simple - and if you don't understand this principle; and please don't be offended; write off this debt and just get new tenants. A solicitor will cost you way more than the debt owed to try recover)

Comms69

Geordielad wrote: »

Thanks CIS , they signed to take the tenancy for 12 months.

You've misunderstood.


They DO NOT 'HOLD' a tenancy.


The point both myself and G_M have been trying to explain.


CIS has provided the correct information, but you've misinterpreted it.

Geordielad

Comms69 wrote: »

Sort of.


You have a contract with has been broken.


Yes you can reclaim some of your losses as a result of that breach.


BUT you must act swiftly if trying to fix the problem by finding new tenants.


(the law isn't simple - and if you don't understand this principle; and please don't be offended; write off this debt and just get new tenants. A solicitor will cost you way more than the debt owed to try recover)

Certainly no offence taken, I've been trying to get new tenants since they said they weren't moving in. So far no joy and if no tenants found very shortly I'll be 900 down at 450 a month

saajan_12

Geordielad wrote: »

Although I'm not grateful for all your replies I'm somewhat confused.
Are they liable for the rent from the day they should have moved in is basically what I'm asking. I apologise if I sound ungrateful, I'm certainly not, but could I ask for a more simplistic answer please?
Are they responsible for the rent until I find another tenant or not?

All this talk of when a tenancy starts is irrelevant.
They signed a binding contract with you which states for at least the minimum fixed term,
* you will receive £x per month in rent
* you will pay no council tax / utility bills

If they fail to fulfill this contract, then you can sue for your losses ie
* £x per month rent
* council tax / utility bills you end up paying
* readvertising / re referencing costs that YOU paid for (not if the tenant paid already)

However you do have to mitigate your losses, by reletting the property asap, ensuring no usage on the utility bills, claiming empty house discount on the council tax if applicable.. (also be able to demonstrate you've relet as fast as pos)

[To those still discussign the tenancy angle, yes the fact that they never took occupation means the tenancy didn't start, so the (would be) tenants are not liable [U]to the council[/U] for CT, but that doesn't stop them being liable to the OP for any CT OP ends up paying, jsut as any other cost. ]

ThePants999

G_M wrote: »

even if you win in court they'll have no assets

Apart from the redundancy payment, which even if statutory could be as high as £15,240 each.