Here we have a question to the blog clinic from Derek (not his real name) who is a landlord:
My letting agent has received valid notice to quit from our tenant (periodic tenancy). The agent has confirmed acceptance in writing.
The tenant is buying a property but now at the last minute wants to stay longer because the purchase is delayed.
Having made maintenance and holiday arrangements around the original notice date I want to hold the tenant to it.
I’ve read that that a tenants valid notice always ends the existing tenancy and it then requires the landlords consent to offer a new tenancy and that if the tenant holds over they will be trespassing. The agent tells me this is not the case in law.
My letting agent tells me that the tenants notice is not binding and that the tenant can withdraw the original notice and submit a new written notice to get the one month extension requested by the tenant. They cite the 1988 Housing Act in support of their position, and say that the existing tenancy agreement just carries on until the tenant vacates?
Yes, the tenant would most likely pay the rent and be gone before a section 21 could come into effect so I realise that despite the inconvenience, it’s probably a case of ‘live with it”.
However I want to know whether the agent has advised me correctly as to the exact legal position (as opposed to what is pragmatic and easy for them in the circumstances)?
Is the original valid notice to quit binding on the tenant? Can the tenant withdraw and replace it unilaterally as the agent suggests?
Answer
My understanding is that if the tenant serves a proper notice to quit, then that will end the tenancy. I am not aware of any rules saying that it can be retracted. (Although you can resurrect the tenancy by accepting rent without qualifying that it is accepted as ‘mesne profits‘.)
So if you act in reliance on the Notice to Quit and suffer loss when he fails to leave, it is arguable that you should be entitled to compensation.
There is also the very old rule in the Distress for Rent Act 1737 which I discuss here which says that where a tenant gives notice to quit but then fails to move out, the landlord is entitled to charge double rent.
I suggest you draw your tenants’ attention to this.
So far as bringing proceedings for eviction is concerned, yes, they will be long gone before you could make much headway.
Although the notice to quit ends the tenancy, strangely we do not use the quicker ‘squatters’ procedure designed for trespassers in this situation, but the standard procedure as used for tenants.
Its a bit odd I know but there you are, thats the legal system for you.
So the double rent option fills the gap rather nicely.
Adrian Thompson of the Guild of Landlords confirmed in a comment to this post that he has used it and it has been used many times by the members of his site.
We’re just starting this process with a tenant at the moment. We have just put them on notice of intended action and made it clear about the acceptance of payment as mesne profits (for the uninitiated, it’s pronounced ‘mean’ profits).
Hopefully he’ll leave before it gets to court action.
I agree with Tessa. Googling fails to reveal any authority to confirm the position, but there are many sites which agree and I found none which disagree. It really has to be the case or otherwise the landlord would not know where he stood.
I think it is important that no landlord acting without legal advice should accept or demand payment for any period after the notice expires designating it “mesne profits” because it is not difficult to get it wrong. The safest policy, even where lawyers are involved, is not to accept or demand any payment and to restrict any claims for mesne profits to court papers.
It’s quite straightforward really, provided one makes it clear – in writing of course – that payments are accepted not as rent but as mesne profits based on a daily rate as compensation for occupation of the property beyond the lawful end of the tenancy and that by accepting payments there is no intention to create a new tenancy.
This should satisfy any district judge and we’ve never had it challenged.
Although of course, as with anything to do with landlord and tenant law, if in doubt seek specialist advice.
So obviously you do not claim for any period in advance.
Are you referring to the fact that if rent is paid in advance by say Direct Debit and that when it turns up in the account a tenancy has already been created?
Or that if you’re demanding or accepting it in advance it’s possible to be interpreted as rent?
I am no expert on the finer points of the law here since I was never a litigator. However, as I understand it, mesne profits are compensation for occupation where the occupier has no right to be in occupation. No one is entitled to compensation for something which may happen, only for what has happened. So, whilst you can demand mesne profits for past occupation, if you demand it for future occupation you are anticipating continuing occupation and effectively condoning it. If you condone it the occupier is in occupation with your consent and if there is (exclusive) occupation with consent and money changes hands you have a tenancy unless it is one of the recognised exceptions which distinguish a tenancy from other forms of occupation with consent.
Claiming in proceedings for possession is different because the claim for mesne profits is (or ought to be) general.
Since it is easy to get it wrong the best advice for a landlord who wants to maintain that a tenancy has come or will come to an end is either (a) not to accept or demand money in respect of any period after the tenancy ends or (b) to take specialist advice on precisely what he can and cannot do.
It is the Law of Property Act which implies that an interest in land is created in the absence of a written contract where rent is accepted.
By accepting a tenant’s notice, persuing court action and specifically stating the payments are mesne profits and there is no intention to create a tenancy, I don’t see how a judge could interpret that at as a periodic tenancy.
What is important here is not so much an expressed intention, but rather what intention is to be inferred from the conduct of the parties. If everything points to a new tenancy having arisen calling any money the landlord received mesne profits will not help. Mesne profits are damages for trespass for the period of unauthorised occupation. Is it not for the court to decide what the damages are?
The very basic point here is that where someone is in exclusive occupation and pays money for it a landowner needs to come up with a good explanation for why there is no tenancy if the point is contested.