united-kingdom england-and-wales tenancy-rules
Can damages be claimed from someone who backs out of a contract (before signing)
<p>Can a landlord (UK, English law) make a claim from a potential tenant who wants to back out of signing a Tenancy Agreement?</p>
<p>If a tenant makes a repeated commitment (via emails, face-to-face conversations and text messages) that they want to sign a Tenancy Agreement and rent a house, and at the same time repeatedly (5 times) adjust the start of the contract by one more week forward.</p>
<p>If the tenant then finally admits he can't/won't be able to move in, does the landlord have any legal rights to claim compensation?</p>
<p>On the landlord's side:</p>
<ul>
<li>The tenant has verbally and unambiguously committed that they want to move in.</li>
<li>The landlord has paid for referencing.</li>
<li>The landlord has paid for a contract to be drawn up</li>
<li>The landlord has paid for the dates on the contract to be changed (repeatedly)</li>
<li>The landlord has paid for a detailed inventory to be taken.</li>
<li>The landlord has turned down other potential tenants</li>
</ul>
<p>On the tenant's side:</p>
<ul>
<li>The tenant has not signed any legal document</li>
<li>The tenant has paid a holding deposit (equal to one week's rent)</li>
<li>The tenant feels that the reasons for not moving in as soon as planned are outside his control.</li>
<li>The tenant didn't ask for an inventory to be taken.</li>
<li>The tenant didn't ask to have his references checked.</li>
</ul>
<p>On a related issue, what's the situation if the tenant <em>still</em> claims they want to move in, but the landlord wants to withdraw because they no longer trusts the tenant's promises? Can the tenant then make a finical claim against the landlord?</p>
<p>Update regarding costs</p>
<ul>
<li>The landlords rent-guarantee insurance requires that the AST (the contract) is written and edited by legal professionals only. (this is a requirement of the insurance company only, not sure it's legally correct)</li>
<li>According to the Association of Inventory Clerks the inventory should be taken 'immediately prior to moving in' so if a new Tenant is has to be found, a new inventory will be required (unless they can be persuaded to move in at very short notice). The AIIC also advise that tenants don't sign inventories that weren't taken immediately prior to moving in.</li>
<li>The 'Tenant Fees Act' restricts the holding deposit to a maximum of one weeks rent, this is less than the costs incurred. (the act makes no mention of how long the holding deposit can be held, nor the circumstances under which it can be retained)</li>
<li>The total delays in moving in add up to five weeks beyond the initially agreed date - more than one months rent.</li>
</ul>
<p>Update - just for completeness, rent guarantee insurance is no longer available (not in the UK anyhow) due to covid.</p>

<blockquote>
<p>Can a landlord (UK, English law) make a claim from a potential tenant who wants to back out of signing a Tenancy Agreement?</p>
</blockquote>
<p>No. Your description reflects that in this particular scenario there is no tenancy contract. The only actual contract relates to the holding deposit, and your description suggests that both parties fully complied with their obligations pursuant to that contract. Accordingly, neither party has a viable claim against the other.</p>
<p>Regardless of whether verbal agreements are cognizable under UK tenancy law, the <a href="https://en.wikipedia.org/wiki/Meeting_of_the_minds" rel="noreferrer">meeting of the minds</a> you portray is that <em>this</em> tenancy ought to be formalized only by signing a contract. That supersedes customer's prior verbal expressions of intent about moving in.</p>
<p>The landlord incurred expenses that either were covered by the customer's holding deposit or were unreasonable. An example of the latter is the fees &quot;<em>landlord has paid for the  dates on the contract to be changed (repeatedly)</em>&quot;, a task that any person can perform with a text editor at a negligible cost. Likewise, &quot;<em>turn[ing] down other potential tenants</em>&quot; is covered by the holding deposit the customer paid. As for taking &quot;<em>a detailed inventory</em>&quot;, that is a task the landlord would perform with any potential tenant and which would render the same outcome regardless of who the tenant would be.</p>
<p>The holding deposit must be associated to a deadline or holding period. Beyond that deadline, it is up to the landlord to grant customer's requests for postponement. But the landlord is not entitled to compensation for a risk he deliberately took without even requiring a [renewed] holding deposit.</p>
<blockquote>
<p>what's the situation if the tenant still claims they want to move in, but the landlord wants to withdraw because they no longer trusts the tenant's promises?</p>
</blockquote>
<p>That depends on the deadline associated to the holding deposit. Once the holding period has elapsed, the landlord is entitled to do with his property whatever he wants. The customer would have a claim only if (1) landlord withdraws prior to the deadline and (2) customer <em>provably</em> intended to move in.</p>
