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Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 7602
Experience:  BA (Hons), PgDip, Practising Solicitor
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I own a property in the UK. I rented it out via an agency.

Customer Question

I own a property in the UK. I rented it out via an agency. The agent secured tenants which were referenced checked and they met the criteria. We agreed a move in date that was one month later than what we wanted. However they appeared like good tenants so we agreed. They paid their deposit to the agent and we waited for the move in date. Some six weeks later and around 2 weeks before the move in date the tenants pulled out of the tenancy. We had signed contracts with the agent and agreed to the terms of the tenancy.

Question is; what recourse to funds do we have from the agency for the loss of the tenancy. Because we waited 6 weeks which was longer than what we wanted we had to cover our own costs for that period and wasn't looking for other tenants. As a result we had to spend another 2 weeks looking for new tenants at lower rent and were less desirable.

As it turned and what the agent didn't disclose was that the tenants were renovating their own home and didn't obtain building approval. If I knew that they were waiting on this element I may have not accepted them. This was kept from us by the agent - i presume that the was aware of their situation.

In the first instance I will take this up with the agent but is there also a case to be taken to the small claims if they fail to compensate myself for the loss of time (rental etc.)?
Submitted: 4 years ago.
Category: UK Property Law
Expert:  Thomas replied 4 years ago.

Can you please explain how the building regs issue effected the proposed tenancy please?

Customer: replied 4 years ago.
Story maybe a misanomia. The building regs issue belonged to the tenants. They were renovating their own place and whilst the work was being done they planned to rent my property. When they didn't recieve approval from ther local council they pulled out of my rental.
Expert:  Thomas replied 4 years ago.

Was a tenancy agreement actually execute with the Tenants?

What does the agent say about their failure to disclose that the tenants taking the tenancy was dependent upon thei building regs issue?

Customer: replied 4 years ago.
No mention that the tenacy was reliant on the building regs issue.

The agent just says sorry and not much else. They haven't divulged if they knew or not. My suspicion is they took their cut of the deposit from the tenant and didn't pass on to us. But I don't know this. It's just a hunch.
Expert:  Thomas replied 4 years ago.
Thanks, XXXXX XXXXX a tenancy agreement actually signed with the proposed tenants (albeit that they did not then actually take up occupation)?

Customer: replied 4 years ago.
Ii'll have to check but I don't think we signed a tenancy agreement with the tenants. Just the agreement with the agent.
Expert:  Thomas replied 4 years ago.

I'm afraid that I have a a meeting now for half an hour. I will be able to answer thereafter.

Expert:  Thomas replied 4 years ago.

Thanks for your patience.

If the tenants haven’t signed a tenancy agreement then you have no contractual relations so you would not be able to recover any money from them.

The agents are their to provide you with a service. Under the Supply of Goods and Services Act 1983 (s13) they have to provide you with a service with a reasonable care and skill.

So, if you were able to prove that they knew that the tenants would only take on the tenancy if their building regs were approved and they did not disclose this to you then you may potentially have claim against them. However, you would only be able to claim direct financial loss, which would be fairly difficult to quantify. The agents may be able to argue that it was not a certainty that the tenants would have taken the property even if their build regs came through (eg. They may have found another property that they preferred and went with that one.)

The issue seems to be proof, unless you can prove they had knowledge and did not inform you then you would not be able to issue a claim with an appreciable chance of success.

If they took a deposit from the tenant and the tenant’s did not execute the tenancy then they would have to return the deposit to the tenants.

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Kind regards,

Customer: replied 4 years ago.
So as it turns out there was a tenancy agreement and it was signed by me the landlord but I never recieved the copy back from the tenants. Thus I'm not sure it was executed?

Expert:  Thomas replied 4 years ago.

If the tenants did execute the tenancy agreement then they woudl be legall bound to perform the covenants in it (eg. to pay rent etc).

Therefore, you would be better off pursuing them for the rent payable under the tenancy agreement as a way of getting your costs back.

You are under a duty to mitigate your loss and so you would certainly get the rent that they would have paid up until the point at which you re-let the property.

Please rate my answer.

Customer: replied 4 years ago.
What happens if they didn't sign? and only I did?
Expert:  Thomas replied 4 years ago.

Then there is no binding contract so you can't sue them.

Please rate my answer now, you will agree that I have now answered your question.

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