Non-Residence – I signed up a new tenant and we completed all the formalities. He paid a month’s rent and deposit and took over bit did not take up residence. After a while he telephoned to say he did not want it and pushed the keys through the letter box. What should I do?
He never actually took up residence, so did a legal tenancy actually exist at all? Can he be held to this tenancy?
The answer is almost certainly yes: a tenancy exists because all the requirements for creating a legally binding contract existed.
Putting keys through the letter box has been held to be an offer to surrender, not surrender in itself. The landlord has not accepted surrender.
However, as he did not reside at the property, this is not technically an Assured Shorthold Tenancy. It’s a Common Law Tenancy.Therefore the landlord can hold the deposit and if necessary claim it in lieu of rent.
He can hold the tenant to the tenancy in any case but if he does take up residence then clearly the landlord will be obliged to meet the requirements of the Deposit Protection Scheme (DPS).
The options are:
- Let the tenant off the contract.
- Let the tenant off with an agreed cash settlement.
- Allow the tenant to find a replacement whilst paying rent.
- Find a replacement on behalf of the tenant and insist the rent and re-letting costs are paid.
But who pays the Council Tax and Utilities and any extra insurance premium for an unoccupied property?
Clearly, in cold weather the house will need heating or the heating system will need to be drained down – in either case costs are involved.
In the case of Council Tax, in order to be liable for Council Tax you must be resident in the building (and hold a tenancy of 6 months’ or more) otherwise the liability falls on the owner (Local Government Finance Act 1992 s6).
Therefore the landlord will be charged Council Tax, subject to the 6 months’ tax-free period when a property is empty and substantially unfurnished.
The landlord may likewise be charged by the utilities companies – water, gas and electricity – unless the tenant signed up contracts.
However, the landlord can pass on all these charges to the tenant providing their agreement allows this – the tenancy agreement should clearly state that the tenant is liable for all these charges.
©LandlordZONE All Rights Reserved – never rely totally on these standard answers which apply primarily to England and Wales. Before taking action or not, always do your own research and/or seek professional advice with the full facts of the case and all documents to hand.