Can the landlord forfeit the deposit if he agrees to let the tenants leave early?

This is a question to the blog clinic from Simon (not his real name) who is a tenant.

I have been renting a flat with minimum 6 months contract with private landlord. Unfortunately I had some family issues(we have all proofs like medical papers and death certificates or the immediate family member); so we surrendered the property with the landlord’s permission.

He has found the replacement tenants on time but now still he is demanding the rent for fix term and forfeited our deposit. Do we have any chances to claim from the court for the same?

Answer

There are a number of issues here. Let’s take a look at the deposit first

Deposit issues

You say your landlord forfeited the deposit – but you should be able to challenge this. All deposits need to be protected with a government authorised tenancy deposit scheme and prescribed information served on you within 30 days. If this was not done then you are entitled to bring a claim for the whole of the deposit money and for a penalty fine of up to 3x the deposit sum.

You should check this out – the best way to do this is to contact the three schemes to see if your deposit was protected with them. If they say no – you will have a valid claim, and you have a six year period within which to bring it.

Rent claim

The general rule when you sign up to a fixed term is that the landlord is entitled to rent for the whole of this period on a month by month basis (if rent is paid monthly). The landlord does not have to agree to end this early if he does not want to.

However if the landlord DOES agree to end the tenancy early, and if a new tenant is found and a new tenancy agreement signed, he cannot then claim rent. He cannot claim rent simultaneously from two different tenants for the same property! The new tenancy agreement to the new tenant will have ended your tenancy agreement and from then on, no rent will have been due from you.

Termination conditions

It is possible however (in fact quite likely) that your landlord will have made it a condition of ending the tenancy early and finding new tenants that you forfeit your deposit. This is not unusual. It is a lot of work finding a new tenant, doing the referencing and checking and dealing with the inventory and deposit issues.

As your landlord is not obliged to do this (as he will be within his rights to refuse to end the tenancy early) he can make his agreement conditional upon either reimbursement of these costs or your giving up any claim to the deposit money instead.

You need to have a look and see what was agreed at the time.

Conclusion

The first thing to do is check the deposit situation. If this was not protected, then you can bring a claim for the penalty.

You may not be able to recover the deposit itself if the landlord is able to show that it was agreed that you would forfeit the deposit money as a condition of ending the tenancy early.  However, this will not affect your right to bring a claim for the penalty fine, although this is not a straightforward claim to bring and you should seek legal advice before doing anything.

If the deposit was protected properly, then the best course of action would have been for you to challenge the deduction under the schemes adjudication service. It is probably too late for this now.

You may be entitled to bring a claim through the courts. However before doing anything you should check to see what the terms were when the landlord agreed to allow you to leave early.

If the deduction was in respect of this and/or in respect of his costs in finding and referencing a new tenant, then you probably cannot challenge his claim.

However if the claim was specifically for rent after the property was re-let to a new tenant – he is not entitled to do this.