Prioritising expenses and arrears on tenant deposit and disputes

haveabreak

saajan_12 said:

haveabreak said:

saajan_12 said:

No need to wait, your total losses are £7500 arrears + £500 property damages. Claim £1500 of it against the deposit and raise a MCOL for the remaining £6500. 

The rental arrears are probably more of a sure thing, so would claim that against the deposit as you already have that while with the MCOL you still have to actually recover the money once you get a CCJ. 

Thanks for your informative reply. Some questions:

1. Should I claim the utility from the deposit also as a sure thing? Aa mentioned on the edit, i pay some utility by management charge and invoice the tenant annualy. Tenant has been sent two invoices  (so 2 year worth) which have been unpaid. - depends on whether the utility really is a sure thing (typically aren't, so hopefully the adjudicator doesn't jump to conclusions). Does your contract specify this should be reimbursed to you? 
Whats wrong with just keeping it simple and claiming the arrears here?

2. Mutually agreed with tenant (as have done with all prior tenants) via email in 31/03/22 to end tenancy on 31/05/22. - what exactly did the agreement say, and was it in writing? 
Tenant came back 2 weeks prior to end date stating they need section 21 for rehousing by council. Had already done viewings and found new tenants to move in 01/06/22. Served section 21, encouraged existing tenant but did not vacate. Ended up cancelling new tenants contract (which was £150pm higher rent than current) - okay, so your losses are the £150pm between 1/6/22 and when the old tenants move out, plus your reletting costs, plus court costs for the eviction, plus any successful claim that your proposed new tenants make for you cancelling their contract. 
and paying a letting agent cancelling fee of £1000. - was the £1000 negotiated after the fact, or did you have to pay that? Was that just for the agent or going to the new tenants to get them to cancel the contract? The issue will be if this was a voluntary payment when you are supposed to mitigate your costs. 
Can I claim £1000 breach of contract and/or loss of higher rent with MCOL? 

The key questions are
1) did you have a binding early surrender agreement with the old tenants to vacate by May, in the same formality as the original tenancy etc?
2) If yes, then the next question is did you agree to cancel it 2 weeks before? (as they could argue had you not said you'd do the S21 to help their council case, they would have figured out how to move out and not incurred all the costs). 

If yes and no respectively, then you may have a contract breach to vacate by 31 May, and may be able to claim the resulting damages:
- court costs for the eviction
- £150pm between 1/6/22 and when the old tenants actually move out
- reletting costs (to re-advertise, re-reference, etc)
- new tenants' claim because you cancelled their contract (if successful, since you have to mitigate costs). 
However not a guarantee, you could try to claim these via a MCOL. However the issue is still whether you actually recover anything if they don't willingly pay. 

Does your contract specify this should be reimbursed to you?  Yes
Whats wrong with just keeping it simple and claiming the arrears here? Yes it probably makes sense to keep it simple with arrears. I guess the utility can be claimed via MCOL, right?

The key questions are
1) did you have a binding early surrender agreement with the old tenants to vacate by May, in the same formality as the original tenancy etc? There was a renewal 12m fixed term AST in place ending on 31/05/22. Discussed renewing it 2 months prior but could not agree on rent/terms, so sent email to tenant 31/03/22 confirming will not be renewing and tenancy will end at end of fixed term.
2) If yes, then the next question is did you agree to cancel it 2 weeks before? (as they could argue had you not said you'd do the S21 to help their council case, they would have figured out how to move out and not incurred all the costs). As mentioned tenant came back to me 2 weeks prior to 31/05/22 stating suddenly they need section 21 to be rehoused. Tenant stated council advised him to stay in current property otherwise they would be making themselves voluntarily homeless. Previously assumed tenant was looking for alternative private property (tenant wanted lower rent and claimed other properties were cheaper during renewal discussion). Therefore I served section 21 as I had no other choice.

haveabreak

saajan_12 said:

Also I want to point out tenant advance paid rent covering up to end of fixed term agreement 31/05/22. From this point (as the tenancy went periodic because tenant failed to vacate) rent is delayed and underpaid each month by Universal Credit (hence accumulated rental arrears). Tenant for months has claimed to have applied for a Discretionary Housing Payment (DHP) to clear rental arrears but I have heard nothing from it. 

So to add to your question "Whats wrong with just keeping it simple and claiming the arrears here [on the deposit]?" My line of thinking was  if outstanding utilities/damage/ lost £1k letting fee etc, or any sure thing, can be claimed from the deposit then do this first. Any remaining amount is rental arrears claimed from the deposit. All remaining rental arrears may be paid via a Discretionary Housing Payment. I.e. the rental arrears element for DHP claim is kept high (since the other 'sure things' have been covered by the deposit).

Also, if required, it makes the MCOL more simple (as it will be mostly arrears). I guess another question is which side should be kept more simple, claim on deposit or claim on MCOL?

But I think this approach (the DHP) may be risky. I do not know about much about DHP and if it will cover rental arrears and by how much, and if it is applicable after eviction. Tenant has been going on about council processing it for months and I am dubious.

anselld

As said previously, the £1k letting fee is a non-starter.  The only sure things are rent and utility arrears assuming you have the financial evidence.  The deposit is the only thing you have any chance of getting your hands on so concentrate on that and keep that one simple.
The Tenant is just stringing you along with the DHP story.  You won't get anything there.  Mcol is worth claiming if only to ensure the Tenant receives a CCJ but again it is unlikely you will see any money.   You need to get used to seeing the rest as a loss.

TripleH

The tenants don't have to renew their contract or leave at the end of the fixed period as they move to a rolling contract.

I suspect there is misunderstanding (whether deliberate by tenants thinking you do not know the rules) which lead to the arrears. They maybe thought 'no contract so we don't pay rent'.

I think you may struggle to get the rent increase awarded as a judge may well view the tenants were renting it at their previous rate.

Was the increase notified correctly?

saajan_12

haveabreak said:

saajan_12 said:

haveabreak said:

saajan_12 said:

No need to wait, your total losses are £7500 arrears + £500 property damages. Claim £1500 of it against the deposit and raise a MCOL for the remaining £6500. 

The rental arrears are probably more of a sure thing, so would claim that against the deposit as you already have that while with the MCOL you still have to actually recover the money once you get a CCJ. 

Thanks for your informative reply. Some questions:

1. Should I claim the utility from the deposit also as a sure thing? Aa mentioned on the edit, i pay some utility by management charge and invoice the tenant annualy. Tenant has been sent two invoices  (so 2 year worth) which have been unpaid. - depends on whether the utility really is a sure thing (typically aren't, so hopefully the adjudicator doesn't jump to conclusions). Does your contract specify this should be reimbursed to you? 
Whats wrong with just keeping it simple and claiming the arrears here?

2. Mutually agreed with tenant (as have done with all prior tenants) via email in 31/03/22 to end tenancy on 31/05/22. - what exactly did the agreement say, and was it in writing? 
Tenant came back 2 weeks prior to end date stating they need section 21 for rehousing by council. Had already done viewings and found new tenants to move in 01/06/22. Served section 21, encouraged existing tenant but did not vacate. Ended up cancelling new tenants contract (which was £150pm higher rent than current) - okay, so your losses are the £150pm between 1/6/22 and when the old tenants move out, plus your reletting costs, plus court costs for the eviction, plus any successful claim that your proposed new tenants make for you cancelling their contract. 
and paying a letting agent cancelling fee of £1000. - was the £1000 negotiated after the fact, or did you have to pay that? Was that just for the agent or going to the new tenants to get them to cancel the contract? The issue will be if this was a voluntary payment when you are supposed to mitigate your costs. 
Can I claim £1000 breach of contract and/or loss of higher rent with MCOL? 

The key questions are
1) did you have a binding early surrender agreement with the old tenants to vacate by May, in the same formality as the original tenancy etc?
2) If yes, then the next question is did you agree to cancel it 2 weeks before? (as they could argue had you not said you'd do the S21 to help their council case, they would have figured out how to move out and not incurred all the costs). 

If yes and no respectively, then you may have a contract breach to vacate by 31 May, and may be able to claim the resulting damages:
- court costs for the eviction
- £150pm between 1/6/22 and when the old tenants actually move out
- reletting costs (to re-advertise, re-reference, etc)
- new tenants' claim because you cancelled their contract (if successful, since you have to mitigate costs). 
However not a guarantee, you could try to claim these via a MCOL. However the issue is still whether you actually recover anything if they don't willingly pay. 

The key questions are
1) did you have a binding early surrender agreement with the old tenants to vacate by May, in the same formality as the original tenancy etc? There was a renewal 12m fixed term AST in place ending on 31/05/22. Discussed renewing it 2 months prior but could not agree on rent/terms, so sent email to tenant 31/03/22 confirming will not be renewing and tenancy will end at end of fixed term.

This bit means everything else is a non starter. Saying that you wouldn't renew the tenancy is not a specific agreement to end the tenancy. After the fixed term if not renewed, the tenancy just continues as a rolling contract. You were hasty in arranging for another tenant, etc

So they didn't breach any agreement, and so you can't claim for any losses as a result of things not going how you expected. So no £1k agent fee, no £150 rent difference, etc. 

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haveabreak said:

saajan_12 said:

Also I want to point out tenant advance paid rent covering up to end of fixed term agreement 31/05/22. From this point (as the tenancy went periodic because tenant failed to vacate) rent is delayed and underpaid each month by Universal Credit (hence accumulated rental arrears). Tenant for months has claimed to have applied for a Discretionary Housing Payment (DHP) to clear rental arrears but I have heard nothing from it. 

So to add to your question "Whats wrong with just keeping it simple and claiming the arrears here [on the deposit]?" My line of thinking was  if outstanding utilities/damage/ lost £1k letting fee etc, or any sure thing, can be claimed from the deposit then do this first. Any remaining amount is rental arrears claimed from the deposit. All remaining rental arrears may be paid via a Discretionary Housing Payment. I.e. the rental arrears element for DHP claim is kept high (since the other 'sure things' have been covered by the deposit).

Also, if required, it makes the MCOL more simple (as it will be mostly arrears). I guess another question is which side should be kept more simple, claim on deposit or claim on MCOL?

But I think this approach (the DHP) may be risky. I do not know about much about DHP and if it will cover rental arrears and by how much, and if it is applicable after eviction. Tenant has been going on about council processing it for months and I am dubious.

Your claims are just for the rent arrears, property damages and utility bills that should have been paid via you. Those can be equally via the deposit or MCOL, but you physically hold the deposit money whereas any decision you win via MCOL means you still need to recover the £. So there's no point in risking the arbitrator disagreeing with you on a claim you make against the deposit, having to return part, and then having to recover more via MCOL.

Even after the deposit, there's still £6k of rent arrears.. I'd guess any DHP won't reach that. That's if there even is a DHP for this, as opposed to being prioritised to keep tenants in properties vs those already being evicted.