6m ASTsigned and monies paid - now tenant changed mind and wants money back

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    #16
    Originally posted by MrJohnnyB View Post
    Although it does go on for about 20 pages thereafter about the subject to no real definitive conclusion!
    Neuberger LJ said:

    The difference between possession and occupation is rather technical, and, even to those experienced in property law, often rather elusive and hard to grasp.

    What I say below should therefore be treated with caution!

    In real property law the word "possession" is tricky because as well as "occupation" it can mean "entitled to receive the rent and profits". That means that a landlord is in possession of his property even though not entitled to occupation. However, when it comes to short term residential properties from the tenant's point of view "possession" is almost always going to mean, at least for practical purposes) "occupation."

    It has always been my understanding that the combined effect of sections 52 - 55 of the Law of Property Act 1925* is that tenancies can only be created in two ways:

    1. By deed, in which case the tenancy starts when the deed says it does so long as (subject to exceptions that need not detain us) it does not start more than 21 years in the future - see section 149 (3) LPA 1925**. Also note that a legal term cannot be backdated so that a deed dated 24th June 1927 purporting to grant a term of a 100 years starting on 25th March 1927 is the grant of a term starting on 24th June 1927 for 100 years calculated from 25th March 1927.

    2. By the tenant taking up occupation where the term agreed is for three years or less. I think that "occupation" must mean "de facto occupation" and not simply "entitled to occupation" or "given permission to occupy".

    *http://www.legislation.gov.uk/ukpga/...er-instruments

    **http://www.legislation.gov.uk/ukpga/...20/section/149

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      #17
      Originally posted by Lawcruncher View Post
      1. By deed, in which case the tenancy starts when the deed says it does so long as (subject to exceptions that need not detain us) it does not start more than 21 years in the future - see section 149 (3) LPA 1925**. Also note that a legal term cannot be backdated so that a deed dated 24th June 1927 purporting to grant a term of a 100 years starting on 25th March 1927 is the grant of a term starting on 24th June 1927 for 100 years calculated from 25th March 1927.

      2. By the tenant taking up occupation where the term agreed is for three years or less. I think that "occupation" must mean "de facto occupation" and not simply "entitled to occupation" or "given permission to occupy".
      Thanks for that LC, that's most interesting.
      That would indeed mean that in OP's case and my scenario above the tenancy hasn't started... Is there breach of contract or something to rely on in order to seek compensation?

      In any case, I think that's a very strong case for having the tenancy agreement executed as deed.

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        #18
        Thanks for that LC, that's most interesting.
        That would indeed mean that in OP's case and my scenario above the tenancy hasn't started... Is there breach of contract or something to rely on in order to seek compensation?
        Yes, I think it is the same as when any other contract is not honoured. The party who has not been given what was promised (in this case the LL) can sue for loss, but is required to mitigate his losses.

        In any case, I think that's a very strong case for having the tenancy agreement executed as deed
        The fact that most TAs are not executed as deeds would suggest that it is not a widespread problem, perhaps because the T usually moves in very soon after signing the TA. It is rare for a T to change their mind completely after signing but before moving in. I would think it's more common for T to want out after moving in!
        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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          #19
          Originally posted by jjlandlord View Post
          That would indeed mean that in OP's case and my scenario above the tenancy hasn't started... Is there breach of contract or something to rely on in order to seek compensation?
          There is still a contract. The OP can maintain the contract and claim compensation, but is under an obligation to mitigate her losses.

          Originally posted by jjlandlord View Post
          In any case, I think that's a very strong case for having the tenancy agreement executed as deed.
          Note though that a deed can be an executory contract i.e. an agreement to grant a tenancy. You need to get the wording right. A possible downside to a deed is estoppel by deed. See here: http://en.wikipedia.org/wiki/Estoppel_by_deed Ignore the examples as they do not relate to English land law.

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            #20
            OK.
            So while it seems best for OP to let the (not actual) tenant go, imo he should use the contract to keep all or part of what was paid as rent as compensation.
            3 weeks worth of rent does not seem an unreasonable amount for compensation considering the loss of time, admin, marketing, and future rent.

            Originally posted by mind the gap View Post
            The fact that most TAs are not executed as deeds would suggest that it is not a widespread problem, perhaps because the T usually moves in very soon after signing the TA.
            Yes. But I'm not sure that many people are actually aware of that loophole...
            The rather simple solution is duly noted in my little (not red) book.

            You need to get the wording right. A possible downside to a deed is estoppel by deed.
            Thanks. Useful stuff, as usual.

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              #21
              Without the "tenant's" agreement the OP has effectively two options: To maintain the contract and claim compensation or to agree there never was a contract and repay all monies paid by the "tenant". There is though nothing to stop the OP saying to the "tenant": "Look we have a binding contract. However I am prepared to release you from it in consideration of what you have already paid."

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                #22
                Originally posted by verysadgirl View Post
                Thank you for your reply - she viewed the property twice and then came again to sign in and complete the paperwork - all of this was at the property she was to live in

                her tenancy was dated the 3rd july (the day she got her keys) and she gave back word on 5th july asking for all her money back

                am not sure if the cooling off period applies in this circumstance?

                thanks again
                Just noticed this as I haven't followed the thread since my first post; suffice to say is the tenant wasn't given enough time to read the AST nor to take it to an independent person, CAB, Solicitor etc. in order to receive advice on its content. The OFT states that a tenant must be given "reasonbale" time in which to do this. If the first time the tenant saw the AST was on the day she signed and was given the keys then I think you would find she would have a case for repudiating the agreement.
                The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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