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LondonlawyerJ
LondonlawyerJ, Advocate
Category: Law
Satisfied Customers: 793
Experience:  Solicitor with over 15 years experience.
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I would like to know what the law states if: 3 Chinese students

Resolved Question:

I would like to know what the law states if:
3 Chinese students sign a shorthold tenancy agreement and pay approximately 5 months' rent up front since they do not have a UK guarantor. They receive the keys and move in to the flat.
The agreement they sign is a 12 month contract with no break clause.
They were due to pay 6 months' rent in advance + a deposit to the estate agent and once it was received by the agent, the funds minus the agent's fees would be sent to me.
I received just under 5 months rent and was told that the remaining monies would be sent to my account shortly after.
Less than a week later, the tenants decide that they do not want to live in the property however do not inform me. Another estate agent contacts me directly saying that he just visited my flat and was asked by another man (a friend of the existing tenant) to find new tenants to move in.
Luckily that agent called me and made me aware of this. He recognized the flat and knows me personally.
I immediately called the original agent that found these Chinese tenants and informed him of what had been going on.
He explained that they were in breach of the contract and will be evicted.
The tenants had told the original agent that they no longer wanted to live in the flat.
These tenants are currently vacating the flat and the original agent is looking for new tenants to move in. This agent told me that that he has found some new tenants who can potentially move in later this week.
Since the Chinese tenants tried to sub-let the flat behind my back as well as the original agent's back, they have broken the agreement. Since they have decided to leave the flat , again they are breaking the agreement - there is NO breakclause.
Do I need to refund them any of their money?
The remaining money that they owed to me was "stopped and recalled by their bank in China". This money was also owed to me however I will not receive it.
The original agent has told me that I have to pay them back their deposit as well as some of the funds.
I believe that they are in breach of the agreement and should not be given back any of their funds.
Can you please advise me on what the law states in this case?
Many thanks
Submitted: 2 years ago.
Category: Law
Expert:  LondonlawyerJ replied 2 years ago.
LondonlawyerJ :

Hello, I am a solicitor with over 15 years experience. I will try to help you with this.

LondonlawyerJ :

If the agreement is for 12 months and hey have paid 5 months rent in advance I see no reason at all why they are entitled to get any of that back if they surrender their tenancy early.

Customer:

To provide more detail. The tenants paid me £12440. They were supposed to pay me £19200 in total before moving in.

LondonlawyerJ :

Is the deposit money with a deposit guarantee scheme or do you hold it? The deposit is different to the rent in that it is their money that you hold for them during the tenancy, usually against damage. It would probably be wrong to retain this as part of the rent dispute. Are you confident that you will be able to get new tenants in less than 5 months, If so you will come out of this ahead.

Customer:

They recalled £6760 from their bank in China which is not right either.

Customer:

The deposit is held in a scheme.

Customer:

I hope to secure new tenants before the 5 months yes.

Customer:

So you are saying I need to pay them back their deposit. The agent tells me I need to pay them back the deposit and £1040 on top.

LondonlawyerJ :

If it is in a scheme then you will not be able to get it as part of this dispute. Do you know why the agents say that you should pay some back. Is there something in their agreement with you or in the tenancy agreement that would override the position in general law that I have stated.

Customer:

no - I think the agent is trying to make some money from this situation.

Customer:

they told me that I will have to pay the deposit back to them (the agent) too.

Customer:

I do not think they will pay the tenants back....

LondonlawyerJ :

Then if you want to hold on to the money.

Customer:

yes, then what?

Customer:

oh..sorry - so just hold on to it....

LondonlawyerJ :

That would be the end of it.

Customer:

but then the agent will refuse to pay me the funds of the new tenants

Customer:

Legally, how does it work? What can they do if I refuse to pay them anything back?

LondonlawyerJ :

How can he possibly do that? Is is our flat to rent and you have got a windfall, he will get a second fee why would he have a difficulty with that?

Customer:

The new tenants pay him directly. He does not show me how much money is transferred into his account. He could just tell me that he did not receive all the funds yet...

Customer:

so, in this case, you think all I need to do is refund the deposit only.

Customer:

no need to refund anymore than that.

Customer:

correct?

LondonlawyerJ :

Yes that is correct. You don't seem to trust your agent very much, then again you know him better than I do. If he did that he would probably be committing a crime and wouldn't he have to pay soon any way?

Customer:

I suppose so. Ok thanks for your help. Fingers crossed all goes well.

LondonlawyerJ, Advocate
Category: Law
Satisfied Customers: 793
Experience: Solicitor with over 15 years experience.
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