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Question Title: Student Lettings
| Question: 326 |
| We are aware of a landlord who takes deposits from a group of students who would like to occupy the premises for the following academic year. He normally takes the deposit in January or February in anticipation of occupation by the students in the following September. The landlord also asks the students to sign the tenancy agreement on acceptance of the deposit. Is this arrangement legally binding ?
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| Answer: |
| The situation that you describe is not an uncommon one though the period from January/February to September does seem rather a long one. I would argue that, at best, this type of arrangement, whether a tenancy agreement is signed or not, is simply a contract to create a tenancy at a date in the future. The tenancy agreement itself only comes into legal effect once the tenants take possession - normally by occupying the property. The retainer is the consideration for that agreement to create a tenancy. If the student pulls out then he/she would be liable for damages for breach of that contract. The amount of the damages would be the reasonable costs to the landlord in finding a new tenant. That amount would be taken from the retainer. A student could reasonably claim, for example where another student immediately took over the proposed tenancy, that the landlord was not entitled to the whole of the retainer. The landlord cannot claim damages for breach of the tenancy agreement as the tenancy was never created and does not exist once one of the parties has clearly indicated a withdrawal of their intention to be legally bound. Having said that, if a student left withdrawing until the last minute then not only might the landlord have greater difficulty in finding a replacement tenant as a result but also the damage suffered could be greater than the amount of the retainer and could be recovered from the student in a small claims action in the County Court. I hope that this clarifies the position a little, but no two cases will ever be the same and each should be looked at individually. For more information there is an article on pre-tenancy agreements in the Letting Update Journal for April 2002 at page 16.
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References:
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Pages:
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Hyperlinks:
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Letting Update Journal |
Oct 2001 page 16 |
letting-update-journal.html
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Letting Handbook |
Chapter 12 |
letting-handbook-and-factsheets.html
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For more information, discuss on the Forum
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