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  • Landlords in Distress

    Agreed rent free period - can I change?

    Hi all,

    Really need some advise here. I feel like I’m drowning  due to none payment of rent and no fix in sight yet.

    Background: I have a property that I purchased a few months ago. One day before the new tenants were to move in, a water leak was reported by the neighbour. Apparently at the time, water was leaking into the neighbours garden. The plumber went to investigate and had to end up digging into the kitchen floor as it was some kind of water leak or drainage issue coming from under the house.

    The management agent said the tenants are still happy to move in but they would want a rent free period until the work has been finished. At the time I agreed as I thought that this shouldn’t take longer than a few days or at the most a few weeks.

    It’s now 2-3 months later and the insurance company still haven’t got to the cause of the leak and investigations are still taking place. Many companies have been called out. What makes matters worse is that It takes roughly a week for each visit (after reports and the go ahead given by the insurance). So it’s a very long drawn out process.

    Given the above, it seems likely that this could go on for another month or two until this issue is sorted. If a new water supply needs to be fitted this could be another 3 months.

    The tenants are refusing to pay anything towards the rent. They are not even willing to pay 30-40% of the rent, which I think is very unfair since they are using the house. It has three bedrooms and a living room all of which are in great condition.

    I made a mistake to agree to a complete rent free period. I should have said 50% rent until the issue has been resolved.

    So my question is - can I do anything about receiving any kind of rent from the tenants? I made the decision of a rent free period with the assumption that this will be very short term. The tenants are using the house and have access to most of it apart from the kitchen.

    Does anyone have any advise here? At the moment I’ve paid out about £1800 to get this issue resolved and the insurance company have sent 3 companies to investigate. From my side I’m doing everything possible to get this issue resolved.

    Would appreciate any constructive feedback and/or advice. Thank you in advance.

    Regards

    Rebel

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    It might be worth going over what you agreed to see if there are any gaps bit if you agreed a rent free period you are very likely bound by it and will have trouble changing your mind now. Might be worth exploring whether your insurance is covering consequential losses like no rent though

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    David Smith
    Landlord & Tenant Solicitor
    Anthony Gold Solicitors

    Find me on LinkedIn: uk.linkedin.com/in/dsnsmith

    All opinions are my own and do not reflect those of my firm. No comment made should be taken as legal advice and you should consult a solicitor or other legal professional for advice on your specific situation.

    Is there an AST in place?

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    There is a 12 month AST in place. I verbally agreed this with the letting who I guess then agreed this with the tenant.

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    I am no expert but if AST says there is a specified rent - then without any ever having been paid is there even a contract in place - eg an agreement validated by money (or monies worth) having changed hands?

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    They have put down a deposit and both parties signed the TA.

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    Thanks for the feedback guys. Looks like I had thought - not much I can do here. I’ll be trying the insurance route though. Big learning lesson here and a painful one at that!

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    At least you can give S.21 at just before 10 month stage - so they leave on expiry of the 12 month AST

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    Agreed! Hopefully I’ll have everything fixed by then. Fingers crossed.

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    Insurance policies will typically provide cover for loss of rent that is a consequence of an insured peril. Sounds like your policy would need to have "trace and access" cover though as the only damage appears to be caused by finding the leak. As the insurance company appear to be directing things, it sounds like there is cover in place and I would ask them to meet all the costs that you have lost. Given that the tenants were moving in before the issue was discovered, I can't see you  having any problem with the claim succeeding. Your agreeing to the rent free period was an attempt to mitigate your loss.

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    Thank you Paul. That’s a good few points. They make sense. I’ll see if they will cover the losses.

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