Resolution case study: Withholding rent for property repairs

Withholding rent for property repairs

In the event of a dispute over the deposit at the end of a tenancy, our alternative dispute resolution service provides an impartial adjudication facility to landlords,
agents and tenants.

Head of Dispute Resolution, Suzy Hershman reviews an adjudication decision of a dispute over withholding rent for property repairs.

Case Summary – Tenant claims against Landlord

Background: This case involved a dispute over unpaid rent and fees for re-letting the property following the tenant’s decision to withhold rent and terminate the tenancy early. The tenant claimed this was due to the landlord’s failure to complete repair work.

Disputed deposit value: £625.

Dispute details: Half way into a six month tenancy the tenant claimed the landlord breached the terms of the tenancy agreement by neglecting their duty to carry out repair work to a defective boiler and faulty electrics and as a result, the tenant terminated the tenancy. Subsequently, the tenant vacated the property and ceased to pay the rent for the remaining contracted rental period.

Outcome: Following the adjudication process and based on the evidence provided £505.60 was paid to the landlord and £119.40 was paid to the tenant.

Key topics: Withholding or ‘setting off’ of rent

Case details

The landlord submitted that the tenant was responsible for the payment of outstanding rent for a 17 day period until new tenants were found and that agent fees were also incurred to re-let the property, which were to be covered by the deposit. The tenant’s claims relate to their assertion that the property had become inhabitable after having no heating or hot water for eight days and that the property was without electricity for two days.

Evidence

The tenant submitted two gas safety warning notices and emails of correspondence between the tenant and landlord. The landlord submitted a copy of the tenancy agreement, and a copy of a possession notice (S21) which was served to the tenant

Adjudicator’s findings

From the tenant’s evidence the adjudicator found that the landlord was notified of the issues of the defective boiler, faulty electricity, and the kitchen fire and boiler were labelled dangerous and disconnected by National Grid. Based on the evidence provided by the landlord, the adjudicator found the landlord acted reasonably by addressing their obligations and did in fact arrange for the removal of the kitchen fire and replacement of the boiler. However, there was insufficient substantive evidence provided by the tenants to demonstrate that the property was uninhabitable when the repairs were required. In this instance the tenant may have been able to deduct the cost of any remedial work from the rent if the landlord had refused, or if there was an unreasonable delay in the undertaking of the repairs, providing specific steps were taken. However, the tenant did not attempt to arrange for the repairs themselves and the adjudicator found that the tenant was not entitled to withhold rent. Based on the terms bound by the tenancy agreement the adjudicator found the tenant was not able to terminate the tenancy early without the agreement of the landlord and thus the sum of £349.35 was awarded to the landlord for unpaid rent. The landlord is only entitled to compensation for losses incurred as a direct result of the tenant’s actions. The landlord did not submit any evidence of costs incurred for re-letting the property by way of invoices or receipts; however the tenancy agreement stated the tenant’s responsibility for any reasonable costs or damage suffered by the landlord as a consequence of any breach of the agreement.
In light of this the adjudicator found that the costs to re-let the property were incurred three months earlier than they were expected by the landlord due to the tenant vacating the property. As such the adjudicator found it reasonable to award the landlord half of the sum claimed towards the re-letting the property – £156.25.

What we’ve learnt from this case

• It is important to submit all evidence which shows costs incurred such as receipts and invoices
• If a landlord is in breach of their obligations to repair a property and not acting in a reasonable time to put things right the tenant may be able to withhold rent, however
  strict criteria would need to be met
• In the event of a dispute, correspondence between the landlord and tenant, such as emails and letters are often key documents to submit as relevant evidence

Note: All ADR services recognise that dispute cases vary, therefore the outcome will depend on the interpretation of the evidence presented