Claiming for loss of rent
Introduction
People may assume that loss of rent is the same as rent arrears, but this is not quite accurate. Rent arrears is rent that was not paid by the tenants whilst they were residing in the property. Loss of rent is rent that the landlord has lost out on whilst their property is vacant due to being uninhabitable.
If your property is deemed uninhabitable due to the act or omission of your tenant, it is both understandable and logical that you would like to recoup these losses from your former tenant. However, this is not always as straight forward as it sounds and there are certain things landlords should bear in mind in the case of this eventuality.
Case study
There have been cases recently whereby landlords have attempted to claim for the loss of rent and have been unsuccessful. One case in particular stands out; In this matter, the landlord wished to claim for loss of rent over the course of a year because the property had been left in disrepair by the tenants, but the landlord had not been able to get the appropriate tradesmen in to do the works in a timely manner due to the Covid-19 pandemic. Therefore the property was left vacant for an extended period of time, causing the landlord a loss of rent.
This element of the claim was not successful for multiple reasons, many of which could have been avoided with proper preparation on part of the landlord. Firstly, the landlord did not obtain a proper independent inventory when letting out the property. This is crucial to show that the damage done to the property rendering it uninhabitable was done during the course of the tenancy, and the doing of the tenant. Without this, no losses for damage can be recovered from the tenant.
Secondly, the landlord failed to show that he had attempted to mitigate his losses. You must show that you are being proactive about your circumstances; In this matter, the landlord should have been able to show that he had contacted multiple tradesmen and attempted to get them into the Property as soon as possible, starting with the most crucial works that would have been necessary to get the property into a habitable state again. You cannot wait around for the most ideal scenario and expect your tenant to foot the bill for all that time wasted.
Thirdly, the landlord then went on to sell the Property without ever re-letting it, and therefore could not show that he ever had the intention of re-letting the property. This meant that there could be no loss of rent because no rent would ever have been received anyway.
Practical tips
It is important to remember that loss of rent can only be recovered from your previous tenant if, but for the previous tenants actions, the property would have been re-let again straight away. Therefore, to claim for loss of rent, you will have to show this. The key pieces of advice we would offer to landlords who may find themselves in this circumstance are:
1. Always obtain an independent inventory and check out report, preferably done by the same company. This is key to easily compare the condition of the property when the tenants took up occupation, to the condition when the tenants vacated.
2. Secondly, always try to mitigate your losses, and document this process. You need to be able to show that you have made reasonable attempts to re-let your property and mitigate the losses you are now claiming from your previous tenant.
Our team of specialists regularly deal with claims for loss of rent and other losses arising from the letting of their property. We are always happy to answer your questions so if you need any help then please get in touch - you may even get some money back in your pocket!
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