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yokel

Contract Signed, Deposit Paid, Landlord Backs Out

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Asking on behalf of a relative ( a student)

A group of four students had viewed and like a place through an agent. The landlord agreed to let it to them. They all signed the contract and paid the holding fee (£400 each) and even an agent's admin fee (£60 each). Since then, the landlord has told the agent that he has decided to re-let to the existing tenants and to cut out the agent. They don't think there will be any problem getting their money back, it is just that the supply of suitable alternatives is going to be diminishing.

Presumably the agent would have had a contract with the landlord giving the agent the right to let on the LL's behalf. The contract signed by the students does state that payment of the fees would secure the property and it would be taken off the market - but if the LL decides to keep it `on the market' without the agent's involvement I assume it invalidates that clause. I suggested they go into the agents and ask to see the most recent copy of the contract - in case the LL had actually signed it.

There is probably no way back for them to get this property now, but any advice on the legal situation, the questions to ask of the agent (probably blameless in this) and the LL in order to bite back would be greatly appreciated.

Y

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The landlord has to honour the contract, that means the tenants can live in the property for 6 months (for a standard tenancy - if it is a "license" the rules are different) with the landlord serving notice after 4 months. You can take him or the agent to court and ask for an equitable remedy - in other words the agent enforces the contract or finds an alternative.

Edited by davidg

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Asking on behalf of a relative ( a student)

A group of four students had viewed and like a place through an agent. The landlord agreed to let it to them. They all signed the contract and paid the holding fee (£400 each) and even an agent's admin fee (£60 each). Since then, the landlord has told the agent that he has decided to re-let to the existing tenants and to cut out the agent. They don't think there will be any problem getting their money back, it is just that the supply of suitable alternatives is going to be diminishing.

Presumably the agent would have had a contract with the landlord giving the agent the right to let on the LL's behalf. The contract signed by the students does state that payment of the fees would secure the property and it would be taken off the market - but if the LL decides to keep it `on the market' without the agent's involvement I assume it invalidates that clause. I suggested they go into the agents and ask to see the most recent copy of the contract - in case the LL had actually signed it.

There is probably no way back for them to get this property now, but any advice on the legal situation, the questions to ask of the agent (probably blameless in this) and the LL in order to bite back would be greatly appreciated.

Y

I agree with the poster above, the landlord has signed an AST and doesn't have a leg to stand on. He must honour the contract. Has he protected the deposit?

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Also keep your cards close to your chest on this one. He has 30 days to protect the deposit and if he doesn't, he'll be unable to give you a section 21 notice so you would be able to stay there for longer than 6 months.

I hope the property is in good condition as I doubt he'll be too eager to make repairs if you do choose to stay.

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This sounds like it would be worth talking to a lawyer, on the face of it it sounds like a perfect 'can't lose' case.

Their action is a) not legal and b ) making you homeless so you should be looking for a few thousand in compensation I would have thought.

If it was the other way around you can be sure their lawyers would be chasing you for the entire 6 months of rent.

Edited by oligotroph

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My last contract was signed by the LA and not the LL. When I wanted out early I was asked for the remaining term to be paid. I doubt that the LL changing his mind and agreeing to keep a house tenanted would void a contract already signed by your relative. TBH the LL got lucky that this was students as if a family had been in this situation it could have been disastrous for them. And for the LL too as I would imagine additional expenses could have occurred which the LL/LA may also be liable for.

Solicitor, preferably from Shelter or a housing background needed I think.

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Regards solicitors, does the Student Union offer free legal advice? My old one used to allow me to book an appointment with a solicitor who visited the student services centre every few weeks or so.

It's very hard to get legal aid for housing matters these days sadly, so Student Union seems best bet.

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There are two aspects to this.

One is whether there was sufficient to create a contract. A contract to let property for three years or less does not need to be in writing or require anything different from any other sort of contract. The key aspect here is whether there was an offer which was accepted. The fact that the students signed the contract is not on its own enough to create a contract. What is also needed is something on the part of the landlord to indicate either that he made an offer which was accepted by the students or that he accepted a offer made by the students. The signing of the contract by the landlord (and probably the agent - see next paragraph) and handing the signed copy to the students would put the matter beyond doubt. Allowing the students into occupation would also have been enough. Absent either, it is necessary to look at all the surrounding circumstances. In order to be able to say whether there is a contract here we need to know who said and did what in what order and what, if anything, was recorded in writing.

Assuming there was sufficient to create a contract, the other issue is whether the agent's actions bound the landlord. We do not need to be concerned with the terms on which the landlord instructed the agent, only with whether he was instructed. This is because a letting agent has ostensible authority to bind the landlord. In other words, anyone dealing with a letting agent is entitled to assume, unless notified to the contrary, that the agent has authority to bind the landlord. Still assuming there was sufficient to create a contract, there are two possibilities. The first is that the agent was instructed when the contract was made. If that is the case the contract binds the landlord. The second is that the agent was not instructed when the contract was made. If that is the case then the agent is liable to the students for breach of warranty of authority.

Clearly the students need to make some loud noises in the hope of making the landlord see sense. However, if everything paid is refunded in full, it is probably not worth the trouble of taking the matter further, especially if alternative accommodation is secured.

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There are two aspects to this.

One is whether there was sufficient to create a contract. A contract to let property for three years or less does not need to be in writing or require anything different from any other sort of contract. The key aspect here is whether there was an offer which was accepted. The fact that the students signed the contract is not on its own enough to create a contract. What is also needed is something on the part of the landlord to indicate either that he made an offer which was accepted by the students or that he accepted a offer made by the students. The signing of the contract by the landlord (and probably the agent - see next paragraph) and handing the signed copy to the students would put the matter beyond doubt. Allowing the students into occupation would also have been enough. Absent either, it is necessary to look at all the surrounding circumstances. In order to be able to say whether there is a contract here we need to know who said and did what in what order and what, if anything, was recorded in writing.

Assuming there was sufficient to create a contract, the other issue is whether the agent's actions bound the landlord. We do not need to be concerned with the terms on which the landlord instructed the agent, only with whether he was instructed. This is because a letting agent has ostensible authority to bind the landlord. In other words, anyone dealing with a letting agent is entitled to assume, unless notified to the contrary, that the agent has authority to bind the landlord. Still assuming there was sufficient to create a contract, there are two possibilities. The first is that the agent was instructed when the contract was made. If that is the case the contract binds the landlord. The second is that the agent was not instructed when the contract was made. If that is the case then the agent is liable to the students for breach of warranty of authority.

Clearly the students need to make some loud noises in the hope of making the landlord see sense. However, if everything paid is refunded in full, it is probably not worth the trouble of taking the matter further, especially if alternative accommodation is secured.

Thank you very much, all, for your comments - and Damocles - this is also very helpful.

I suspect that, as you say, the students could have a claim against either the LL or LA but as is so often the case the downside of kicking up a fuss outweighs the chances of getting the property that they wanted. You wouldn't want to be in a property by dint of a legal defeat of the LL and LA and you don't want to make an enemy of one of a very small number of letting agents. However they could possible make noises about taking action against the landlord if they can clarify the situations you have described.

To be fair to the LA, he does seem embarassed and angry at the LL - talked about blacklisting him.

But your analysis could prove to be very useful if they have no progress in finding an alternative.

Thanks again

Y

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