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bongo_boy
Posts: 24 Forumite
Dear Forum,
I am a live in land lord. I let 2 rooms in my house, and we all share the kitchen, lounge, bathroom. Any party that rents a room is by law a lodger (as opposed to a tenant), or excluded occupier.
The following is a situation that is new to me I would appreciate advice with please, as I am struggling to find information online. I will list the facts as I have them.
A new lodger viewed my property.
He agreed to let the room verbally - and confirmed in writing (SMS).
We agreed a move in date verbally - and confirmed in writing (SMS).
The rent amount was clearly stated in the advert. The tenant said he accepted the rent amount - verbally only.
We agreed the length of his stay - 3 months - confirmed in writing (SMS)
The lodger paid the deposit, and was due to move in this weekend.
I stopped advertising the room.
Yesterday the lodger decided he no longer wants to move in and informed me in writing (SMS), and requested a full refund of his deposit.
I accepted his decision to end his 'tenancy', but declined to refund his deposit.
I informed the lodger that he had agreed to 3 months (verbally and by SMS). As such he owes 3 months rent.
I said that as a gesture of good faith I would charge only one month's rent and refund the balance, so partially covering the rental income lost by me, on the assumption I could get another lodger.
The lodger provided his bank details and I refunded the balance.
Today the lodger contacted me and wrote the following:
Dear xxx
Thank you for recently returning £xxx of the £yyy deposit paid.
Given the situation I have sought independent legal advice as to my position.
I paid the above mentioned sum to you in good faith, as requested, as deposit funds for a fixed term tenancy of 3 months. By your own admission, and only after I requested return of the funds, the "deposit covers shortfall in rent". No agreement was made for the funds to be held for any other reason than the aforementioned. Given that no agreement was signed, despite the intention to do so, no relationship of landlord and tenant began. Rent can not therefore be payable, thus no shortfall can arise.
I trust that you will be returning the outstanding balance to me as a matter of urgency, less £zz as a reasonable gesture by myself for your costs and time. Should payment not be received within 5 working days, I will be instructing my solicitor to issue a claim to the county court money claims centre (Wales). Given that you have suffered no pecuniary loss, I would hope that you recognise my suggested course of action to be in the best interests of both parties."
The lodger is correct, no contract was signed.
However, my understanding is that 'giving' and 'receiving' possession means the act of the landlord saying how much rent is and when the lodger can move in, and in return the lodger saying they want it and will move in on that date. The agreement/tenancy then commences from that date and it is irrelevant if no contract is signed.
In this instance the contract is verbal - with written confirmation via SMS.
I want to do what is correct by law.
If I have no legal right to deduct rent owed from the deposit that was paid, I will refund all monies owed.
However, as I rely on this income, I fully intend to keep the 'rent' retained that I deducted which is in my possession.
I would appreciate advice on this situation from the legal standpoint.
Am I entitled to withhold the deposit or not?
Many thanks in advance for your assistance.
I am a live in land lord. I let 2 rooms in my house, and we all share the kitchen, lounge, bathroom. Any party that rents a room is by law a lodger (as opposed to a tenant), or excluded occupier.
The following is a situation that is new to me I would appreciate advice with please, as I am struggling to find information online. I will list the facts as I have them.
A new lodger viewed my property.
He agreed to let the room verbally - and confirmed in writing (SMS).
We agreed a move in date verbally - and confirmed in writing (SMS).
The rent amount was clearly stated in the advert. The tenant said he accepted the rent amount - verbally only.
We agreed the length of his stay - 3 months - confirmed in writing (SMS)
The lodger paid the deposit, and was due to move in this weekend.
I stopped advertising the room.
Yesterday the lodger decided he no longer wants to move in and informed me in writing (SMS), and requested a full refund of his deposit.
I accepted his decision to end his 'tenancy', but declined to refund his deposit.
I informed the lodger that he had agreed to 3 months (verbally and by SMS). As such he owes 3 months rent.
I said that as a gesture of good faith I would charge only one month's rent and refund the balance, so partially covering the rental income lost by me, on the assumption I could get another lodger.
The lodger provided his bank details and I refunded the balance.
Today the lodger contacted me and wrote the following:
Dear xxx
Thank you for recently returning £xxx of the £yyy deposit paid.
Given the situation I have sought independent legal advice as to my position.
I paid the above mentioned sum to you in good faith, as requested, as deposit funds for a fixed term tenancy of 3 months. By your own admission, and only after I requested return of the funds, the "deposit covers shortfall in rent". No agreement was made for the funds to be held for any other reason than the aforementioned. Given that no agreement was signed, despite the intention to do so, no relationship of landlord and tenant began. Rent can not therefore be payable, thus no shortfall can arise.
I trust that you will be returning the outstanding balance to me as a matter of urgency, less £zz as a reasonable gesture by myself for your costs and time. Should payment not be received within 5 working days, I will be instructing my solicitor to issue a claim to the county court money claims centre (Wales). Given that you have suffered no pecuniary loss, I would hope that you recognise my suggested course of action to be in the best interests of both parties."
The lodger is correct, no contract was signed.
However, my understanding is that 'giving' and 'receiving' possession means the act of the landlord saying how much rent is and when the lodger can move in, and in return the lodger saying they want it and will move in on that date. The agreement/tenancy then commences from that date and it is irrelevant if no contract is signed.
In this instance the contract is verbal - with written confirmation via SMS.
I want to do what is correct by law.
If I have no legal right to deduct rent owed from the deposit that was paid, I will refund all monies owed.
However, as I rely on this income, I fully intend to keep the 'rent' retained that I deducted which is in my possession.
I would appreciate advice on this situation from the legal standpoint.
Am I entitled to withhold the deposit or not?
Many thanks in advance for your assistance.
0
Comments
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* is this person (or was he going to be) a tenant or an Excluded Occupier?Dear Forum,
I am a live in land lord. I let 2 rooms in my house, and we all share the kitchen, lounge, bathroom. Any party that rents a room is by law a lodger (as opposed to a tenant), or excluded occupier.
The following is a situation that is new to me I would appreciate advice with please, as I am struggling to find information online. I will list the facts as I have them.
A new lodger viewed my property.
He agreed to let the room verbally - and confirmed in writing (SMS).
We agreed a move in date verbally - and confirmed in writing (SMS).
The rent amount was clearly stated in the advert. The tenant said he accepted the rent amount - verbally only.
We agreed the length of his stay - 3 months - confirmed in writing (SMS) Mad! But that's history now.
The lodger paid the deposit, and was due to move in this weekend.
I stopped advertising the room.
Please clarify 'deposit'. Was this a security deposit or a holding deposit? What (exact words) did you write on his receipt?
Yesterday the lodger decided he no longer wants to move in and informed me in writing (SMS), and requested a full refund of his deposit.
I accepted his decision to end his 'tenancy', but declined to refund his deposit.
If he's a lodger, why are you granting a tenancy?
I informed the lodger that he had agreed to 3 months (verbally and by SMS). As such he owes 3 months rent.
a) I seriously doubt a contract was formed by SMS
b) if it was, you still have to minimise your losses eg by getting a replacement lodger - you cannot charge rent from 2 lodgers for the same room
I said that as a gesture of good faith I would charge only one month's rent and refund the balance, so partially covering the rental income lost by me, on the assumption I could get another lodger.
The lodger provided his bank details and I refunded the balance.
Seems harsh. A week's rent at most would be fair.
Today the lodger contacted me and wrote the following:
Dear xxx
Thank you for recently returning £xxx of the £yyy deposit paid.
Given the situation I have sought independent legal advice as to my position.
I paid the above mentioned sum to you in good faith, as requested, as deposit funds for a fixed term tenancy of 3 months. By your own admission, and only after I requested return of the funds, the "deposit covers shortfall in rent". No agreement was made for the funds to be held for any other reason than the aforementioned. Given that no agreement was signed, despite the intention to do so, no relationship of landlord and tenant began. Rent can not therefore be payable, thus no shortfall can arise.
see my point a) above
I trust that you will be returning the outstanding balance to me as a matter of urgency, less £zz as a reasonable gesture by myself for your costs and time. Should payment not be received within 5 working days, I will be instructing my solicitor to issue a claim to the county court money claims centre (Wales). Given that you have suffered no pecuniary loss, I would hope that you recognise my suggested course of action to be in the best interests of both parties."
The lodger is correct, no contract was signed.
However, my understanding is that 'giving' and 'receiving' possession means the act of the landlord saying how much rent is and when the lodger can move in, and in return the lodger saying they want it and will move in on that date. The agreement/tenancy then commences from that date and it is irrelevant if no contract is signed.
In this instance the contract is verbal - with written confirmation via SMS.
I want to do what is correct by law.
If I have no legal right to deduct rent owed from the deposit that was paid, I will refund all monies owed.
However, as I rely on this income, I fully intend to keep the 'rent' retained that I deducted which is in my possession.
I would appreciate advice on this situation from the legal standpoint.
Am I entitled to withhold the deposit or not?
Many thanks in advance for your assistance.
* was the deposit a holding or security deposit?
* how much was the deposit? How much is the weekly/monthly rent?
* what were the dates in your timeline bove? I find it hard to believe you've lost a months rent - and claiming 3 months was taking the p*ss! No wonder he's fighting!
Return the money and move on with life.0 -
Hi G_M,
Thank you for your reply.
I apologise I was not clear enough on some aspects of my original post.
The person was a lodger / excluded occupier. Not a tenant.
I wrote 'tenancy' within marks because I was unsure of the correct term off of the top of my head. I should have said licence.
The deposit 'type' was not specified as either holding or security. This is the text taken from the advert:
"A £750 rent deposit is mandatory, refundable upon completion of the rental agreement period."
Other than an SMS confirmation of receipt of funds, the lodger did not receive a formal receipt as he did not attend the house after being requested to to receive the receipt and finish the written licence.
Further and specific details regarding the deposit were available to the lodger, but not read by the lodger, nor signed by the lodger.
The Deposit was £750.
The rent was £400.
The money retained was 1 month's rent - £400. The balance of £350 was refunded.
To clarify, I have not taken nor requested 3 months rent - I'm not sure where that notion came from.
Timeline:
6th August lodger confirmed intention to take lodging.
8th August deposit paid.
8th August all advertising deleted/removed.
9th August lodger confirmed move in date of 19th.
15th August lodger changes mind ask for a refund.
16th August - full refund declined. Partial refund offered, keeping 1 month's rent.
16th August lodger provided bank details & partial refund was processed.
17th august lodger forwards the above message.
From the time of verbal acceptance of licence to written acceptance of termination of licence is 9 days.
The deposit was stated as refundable upon completion of agreement.
The agreement period was never completed.
I have incurred a loss of income due to this, with additional admin costs involved in listing rooms etc.
Even if I can get another lodger (which I am trying to do to minimise my losses), this normally takes 2-4 weeks.
Thus at minimum, I will loose 3-4 weeks rental income.
This is the basis of my 1 month's rent not being refunded.
I thank you for making your point(s) and offering your opinion.
But, opinion aside, I would like to know if I have acted lawfully or not, as I am struggling to find any clear guidance on this situation.0 -
Give the guy his money back, if you feel you want to hold on to the amount he has suggested.
Then, sort out what this deposit actually is! Is it rent in advance, or is it in case of damages? The term 'rent deposit' is unclear and confusing.0 -
Not sure how it applies to lodgers, but for ordinary tenancy's:
https://england.shelter.org.uk/housing_advice/tenancy_deposits/tenancy_deposit_deductions_your_landlord_can_make
The problem here, though, is that no agreement was signed. I'm not sure you can rely on the SMS without having a signed acceptance of the terms. I think the lesson learned is to not take the property off of the market until a signed agreement is in place.0 -
A contract was formed verbally (the SMS's just evidence some of the terms but the basis was verbal). The to-be-lodger breached this contract, so is liable for your MITIGATED losses.
You should readvertise as soon as you found out the would be lodger was not moving in, in a similar way to last time. Your losses are then
- RENT from 19th – day before new person moves in
- Re listing fees
- Referencing costs for the new person
For a room, I would think 2-3 weeks is reasonable, for a whole property 1-2 months. If it takes you less time, you can't charge rent to two people for the same space. If it takes much longer, it could be argued you're not being reasonable and your rent losses should be capped at say 3 weeks rent.0 -
Hi,
I rent out a room to a lodger too, I would recommend getting some paperwork (can easily be sent by email) to cover yourself if this situation arises again.
In my opinion, if the deposit information said "until completion of rental period" and he did not complete you're entitled to hold his whole deposit.
Furthermore, after you informed him only £350 would be returned, he agreed to this by providing his bank details for it to be returned, and now he is reneging on this.
I suggest you reply along the lines of "you agreed that the deposit was until the completion of the rental period, and you have failed to complete it. I offered a good will gesture as I hope to re-let the room in 4-6 weeks and do not wish to profit from you, and you agreed by providing your bank details. The room has now been re-advertised and should it rent out sooner than 4 weeks, I'll refund the difference to you, minus the additional referencing and advertising costs"0 -
Thank you for your information fezster, saajan_12 and es5595.
I have take on board your helpful comments, though ultimately I am trying to find legal advice to be absolutely clear, so I may need to contact a solicitor directly.
If anyone has anything further to add (for or against) preferably with a legal basis I would be very interested to hear from you.
Thank you0 -
Given the amounts involved, this is something that would go to a small claims court if the lodger decided to do so. Neither you nor the lodger would need a solicitor for this.
1. What did your advert say about the deposit if the lodger/you decided to withdraw from the agreement before moving in? For instance, generally ads of this nature say that the deposit is non/partially refundable if the lodger withdraws and fully refundable if the landlord withdraws.
2. If it did not say anything specific about the above situation, and the lodger takes you to a small claims court, the judge will consider the situation in its entirety and form a opinion. You will most likely be allowed to keep a 'reasonable' amount to cover any actual loss to yourself and asked to refund the rest.
Unfortunately, there is no clear-cut legal advice that will directly apply to your situation. In your place, I would deduct the actual financial loss that I have had to suffer because the lodger withdrew and refund the rest (as the lodger seems to be suggesting in his letter). Then make that clear in written communication to the lodger and leave it at that.
I myself would not waste money on a solicitor, and I find it hard to believe that the lodger has actually engaged one given that the amount in question is just £400!Thank you for your information fezster, saajan_12 and es5595.
I have take on board your helpful comments, though ultimately I am trying to find legal advice to be absolutely clear, so I may need to contact a solicitor directly.
If anyone has anything further to add (for or against) preferably with a legal basis I would be very interested to hear from you.
Thank you0 -
If this this person changes his mind again and suddenly opts to move in, would you really want to live with him? I would not. If I were you, I'd cut my losses if you cant agree on an amount and move on but learn from the experience.
I also rent rooms out to lodgers and I typically take a non-refundable holding fee of about £100 for moves within 1 or 2 weeks or more if move-in date is in about a months time.
I also discuss this before taking the fee (and in sms acknowledgement receipt) as it really is to deter time wasters. It then forms part of the deposit which I only receive on move-in day.
I advertise on spare room using the free option but fee option is still less than £30 if I remember correctly. IMO you have lost little to nothing... wasted about 10 days at the most. Even estate agents typically retain a holding fee (till contract is signed) which does not equal one months rent.
Not worth considering a trip to the small claims court in my opinion....Life is too short and I'd rather save energy for bigger battles.
However do update on whatever the outcome is as I am curious and this is a learning exercise for me too.Working towards:
[STRIKE]*House Purchase (2015)[/STRIKE] [STRIKE] *Top-up pension (2016)[/STRIKE] [STRIKE] *Clear CC (2016) [/STRIKE]
*Mortgage Overpayment (50% LTV by Jan 2020) *Clear student Loan(by Jan 2020)[STRIKE]*Save for a Car (2017)![/STRIKE]
*Making the most of life!!!
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No.
The deposit 'type' was not specified as either holding or security. This is the text taken from the advert:
"A £750 rent deposit is mandatory, refundable upon completion of the rental agreement period."
Then that is clearly not a holding deposit - it is a security deposit. As such it should be returned in full if the offer of a licence to occupy is not being taken up.
A 'holding' deposit would be more likely non-returnable since its purpose is for the LL to remove the property from the market and hold it for the applicant (at potential loss of other applicants).
Other than an SMS confirmation of receipt of funds, the lodger did not receive a formal receipt as he did not attend the house after being requested to to receive the receipt and finish the written licence.
And you failed to send him an email? Or a written receipt in the post? acknowleging receipt and confirming the terms of the deposit?
Further and specific details regarding the deposit were available to the lodger, but not read by the lodger, nor signed by the lodger.
Available how? See above.
......
To clarify, I have not taken nor requested 3 months rent - I'm not sure where that notion came from.
Your OP said: "I informed the lodger that he had agreed to 3 months (verbally and by SMS). As such he owes 3 months rent."
Timeline:
6th August lodger confirmed intention to take lodging.
8th August deposit paid.
8th August all advertising deleted/removed.
9th August lodger confirmed move in date of 19th.
15th August lodger changes mind ask for a refund.
16th August - full refund declined. Partial refund offered, keeping 1 month's rent.
16th August lodger provided bank details & partial refund was processed.
17th august lodger forwards the above message.
So there were 9 days between removal of the property from the market and applicant informing you he had changed his mind. And you want a month's rent?? :eek:
From the time of verbal acceptance of licence to written acceptance of termination of licence is 9 days.
The deposit was stated as refundable upon completion of agreement.Occupation was never taken up so the security deposit should be returned in full. It was not a holding deposit.
The agreement period was never completed. Indeed
I have incurred a loss of income due to this, with additional admin costs involved in listing rooms etc.
Even if I can get another lodger (which I am trying to do to minimise my losses), this normally takes 2-4 weeks.
Thus at minimum, I will loose 3-4 weeks rental income.
This is the basis of my 1 month's rent not being refunded.
You are clutching at straws to justify the unjustifiable.
Putting aside the fact that you did not take a holding deposit at all, the most you have lost is 9 days advertising time.
But, opinion aside, I would like to know if I have acted lawfully or not, as I am struggling to find any clear guidance on this situation.
Had you made it clear you were taking a holding deposit pending the commencement of the arrangement, with the terms of refund/non-refund made clear, then you could retain all/some of the deposit as appropriate.
but you took a security deposit to be held till occupation ceased, and then returned.
You should now return it in full.0
This discussion has been closed.
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