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View Full Version : Diminution in value of the reversion



MrJohnnyB
21-09-2011, 09:53 AM
If a letting agent were to tell an existing tenant who'd given notice that they've already signed another party up to take over the property at the passing rent, would they have any claim to damages? Completely hypothetical situation to be honest!

I understand in commercial if it were the case that tenant left property in a poor state but that new tenant took FR&I with no rent free at the old passing rent then the whole concept of diminution would rule out much in the way of damages.

jjlandlord
21-09-2011, 10:00 AM
I think it was LC who mentioned section 18 of the Landlord and Tenant Act 1927 as saying as much.

It remains to be seen what e.g. a deposit scheme's arbitrator would make of such a defence by tenant.

At least regarding cleaning, it would seem unfair to grant LL any compensation if he managed to re-let at market rent without carrying out any.

Lawcruncher
24-09-2011, 10:18 AM
I understand in commercial if it were the case that tenant left property in a poor state but that new tenant took FR&I with no rent free at the old passing rent then the whole concept of diminution would rule out much in the way of damages.

Up to a point. First, I think it is a question of whether the property is let at the market rent whether that be higher or lower than the old passing rent. Secondly, the courts tend to take the view that if the premises are tired, rather than in a poor state, an incoming tenant expects to do his own fitting out and jolly the premises up.