Rescinding AST before start date...

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    Rescinding AST before start date...

    I have agreed to let my property and the tenant has signed the agreement. I have also signed the agreement. The commencement date is 1st June 2010.

    On the front of the tenancy agreement it states that:

    "Deposit of £2,000 due immediately when contracts are signed"

    I wish to pull out of the agreement for a variety of reasons. As the deposit has not yet been paid am I legally able to?

    Thanks


    Lee

    #2
    You have each signed. Have you exchanged signed copies and has T actually moved-in?
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Yes we have exchanged signed copies, but the tenant has not moved in...

      Thanks

      Comment


        #4
        Hmm. Exchange of contracts normally creates a binding legal obligation. Why the change of mind? Does T know, yet?
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #5
          1. The exchange of agreements created a contract.

          2. It was a condition of the agreement that a deposit was paid on exchange.

          3. The tenant has failed to pay the deposit.

          The question: does the tenant's failure to pay on time enable you to rescind the agreement?

          To answer that it is necessary to ask if the requirement to pay the deposit "immediately" makes "time of the essence". In contracts relating to land the general rule is that if you want time to be of the essence in respect of any time limit you have to spell it out. 'Time will only be of the essence where the contract so provides, or where “the nature of the subject matter of the contract or the surrounding circumstances show that time should be considered to be of the essence"' (Simmers v Innes).

          It does not look as if time is of the essence in your case. I think you would be entitled to deny the tenant access on 1st June if the deposit is not paid by then. What the position would be if tendered a day or two after I would not like to say. In the meantime I think the best you can do is to give the tenant notice requiring payment of the deposit within a reasonable time. Since the tenant is in breach you can probably make time of the essence in respect of any time limit in the notice - so long as it is reasonable.

          Comment

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