Wrongful tenancy termination leads to £2,400 compensation orde

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If you are a landlord and wish to remove your tenants and recover your property, it can be expensive if you do not follow the proper procedure.

In a recent case, tenants were served with a notice to leave on the basis that the landlord wished to recover the property to live in himself. However, shortly after moving into the property, the landlord then instructed estate agents to put the property on the market for sale. The tenants, who had found another property were, understandably, upset and lodged an application with the First Tier Tribunal claiming that the notice to leave was illegal.

What are the facts of the case?

The landlord, Mr Ross, had let the property to Ms Munro and Mr McNicoll on 6 February 2018. There was nothing unusual about the tenancy and the tenants were happy renting the property. The Landlord served a notice to leave on the tenants on 3 December 2020. The basis of the notice to leave was Ground 4 of Schedule 3 to the Private Housing (Tenancies) (Scotland) Act 2015. This is one of the reasons allowed whereby a landlord can recover the property if it is required for his own use to live in. The notice indicated that the tenants had to vacate the property by 6 March 2021.

The notice was valid and properly served and contained the correct notice period to the tenants.

When they received the notice, the tenants immediately began a search for an alternative home and, once they’d found one, they served their own notice of termination on the landlord. The tenants served that notice on 18 December 2020 and the lease came to an end on 13 January 2021.

Once the tenants had vacated the property, the landlord moved in. However, a mere 19 days later, on 2 February 2021, the landlord instructed a firm of estate agents to market the property for sale. The tenants discovered the property was on the market and, on 8 February 2021, lodged an application with the First Tier Tribunal seeking a wrongful termination order.

What did the First Tier Tribunal say?

When the case was heard by the First Tier Tribunal, they noted the dates set out above were agreed by the parties. They also discovered that the property was placed on the market for sale on 5 February 2021, a closing date for offers set for 11 February 2021 and sold with a date of entry of 30 March 2021.

The tenants informed the tribunal that they were happy with the tenancy and would have remained as tenants in the property had the landlord not served the notice to leave on them. When they did receive the notice to leave, they immediately instigated a search for an alternative property and when they found one, then served their own notice of termination on the landlord. Again, there as nothing at all wrong with the tenant’s actions. Indeed, at the time of the hearing, the tenants were still living in the property they had moved to.

At the hearing, the landlord had advised that between the date of the original notice of 3 December 2020 and 13 January 2021, it was his intention to live in the property. However, a mere 19 days later he instructed estate agents to market the property. When questioned by the tribunal was to why he had decided to place the property on the market, he could give no “coherent explanation”.

The Ground on which the landlord had based the notice to leave provides that the minimum period on which to base that notice is 3 months. Clearly a matter of days between moving in and placing the property on the market is not a basis which is supported by the Act.

The tribunal decided that the landlord had served a wrongful termination order. They said The only realistic conclusion that we can reach is that the respondent misled the applicants, and, as a result of his misrepresentation, the applicants surrendered occupation of the property.”

The maximum compensation payment that can be order by the tribunal is six times the monthly rental. However, the tribunal took into account some financial and health problems the landlord had been experiencing and, in those circumstances, make a compensatory award of three times the monthly rental. The monthly rental was £800 per month to the total award made was £2,400 and it was to be paid to the tenants within 14 days of the date of the decision.

This is an important decision and a stark warning to landlords that should they mislead tenants through using false notices then they are likely to be penalised by the First Tier Tribunal.

If you wish to read the case in full, you can do so by clicking here.

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