Sections 37 and 194 - Deemed Termination of Tenancies
The following is a general note for guidance only and individual circumstances of particular cases may vary.
If the tenant serves notice of intention to terminate that is not the required amount in the required manner and moves out at a time when the rent has run out, the tenancy is deemed terminated. If the tenant does not serve any notice of intention to terminate but moves out, then, at a time when the rent is 28 days in arrears, the tenancy is deemed terminated. In these circumstances the landlord is entitled to recover possession of the dwelling even if the tenant has left some belongings behind. However, the tenant remains liable to pay rent for the correct period of notice that should have been given.
In the case of a periodic tenancy, therefore, the tenant who has not served a valid notice of termination giving the required period of notice is vulnerable to the landlord's entitlement to retain the portion of the deposit attributable to the appropriate notice period.
Unless the agreement provides otherwise, tenants of a fixed term tenancy may only terminate where there has been a failure by the landlord to comply with the tenancy obligations (section 58(3)) or where the landlord has refused consent to an assignment or subletting (section 186). If, notwithstanding this, the landlord agrees to a termination and to a notice period less than the specified statutory amount and agrees that there will be no implications for the deposit refund, then the tenant could get the deposit back.
If the landlord accepts the inevitable (that the tenant is breaking the lease) but indicates that he/she will be expecting the rent until he/she has a replacement tenant or that there will only be a deposit refund if he/she is not at a loss of rent, then the tenant is only entitled to a refund to the extent that there is no rent owing when the question of a refund is being considered by the landlord.
The existence of section 37 does not relieve the tenant of the obligation to pay rent, however that obligation arises. A landlord does not have an entitlement to double rent so, once a dwelling has been re-let (and the landlord is obliged to re-let as speedily as possible), any liability of the former tenant for rent ceases. Prior to re-letting, however, the landlord can legitimately retain deposit money towards a rent liability that still exists on the part of the tenant as the landlord requirement to refund is based on there being no default in the payment of rent.
Example of Deposit Case Referred to PRTB vacated on 7th July 2005.
Lease for 1 year entered into on 26 November 2004, deposit of €800 and one month's rent (€ 800) paid in advance. Tenants gave 7 days notice of termination on 30th June 2005 and Example of Deposit Case Referred to PRTB vacated on 7th July 2005. Landlord had indicated a desire that tenants would find a subtenant but they informed the agent of failure to do so on 7th July 2005 and returned the keys after their last rent payment expired on 25th July 2005. The dwelling was re-let in mid August 2005. Although the tenants moved out on 7th July 2005, as the rent did not fall into arrears until 26th July 2005 and notice (albeit inadequate) was received, the tenancy would only be deemed terminated from the latter date. If the tenancy had been periodic, the correct notice period by way of a valid Notice of Termination would have been 35 days, expiring on 4th August 2005 and the landlord would have been entitled to rent up until that date. Accordingly, the landlord would have been entitled to deduct from the deposit refund rent arrears of 10 days.
However, as the tenancy was a fixed term tenancy and was not terminated by reason of a breach of the landlord's obligations, the landlord was entitled to rent until an alternative tenant had been found. As the dwelling was re-let from the middle of August, the former tenants were liable for the rent up to say 14th August 2005. Accordingly, the landlord would have been entitled to deduct from the deposit refund rent arrears of 20 days. In accordance with section 186, if the landlord had refused consent to a sub-letting or assignment of the fixed term tenancy, the tenants would have been entitled to terminate by way of a valid Notice of Termination giving 35 days notice and to a refund of the deposit less arrears of 10 days rent - however the landlord had in fact indicated a willingness to sub-let so section 186 did not apply in this case.
“Even though care has been taken in the preparation and publication of this guidance note the Private Residential Tenancies Board, its servants or agents assume no responsibility for and give no guarantees, undertakings or warranties concerning the accuracy, completeness or up to date nature of the information provided in this guidance note and do not accept any liability whatsoever arising from any errors or omissions contained therein".