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Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
May I ask if the agent used the words "subject to contract" on correspondence with the prospective tenant please?
Was a deposit or rent accepted by the agent in respect of the tenancy?
I am not sure on the language they used with him. I can ask the agent for details?
Would you like me to explain the contractual position so you know what to ask and look for? Do you know if rent or deposit was accepted by them?
Yes if you can explain the contractual position that would help. We did not have an agreed contract and it had not yet started so this is where I am confused. There is a letter taking a confirmation of a holding deposit. It says on the letter to him, we are delighted you have decided to rent a property through Aspire Agency. in the interim , we have attached a draft copy of the tenancy agreement to read over. The tenancy agreement will be finalised once we have confirmation from the landlord to proceed with the references.
He got his money back straight away from agency that he had given them. They confimred this with me.
Thanks - but no deposit for the tenancy itself or rent was accepted to your knowledge?
It says on this letter that funds are due for deposit in a month but does not say if anything else needs to happen before money goes over. Basically he could have sent them over at that point if he wanted to. I am not sure if he did. The agency usually do this as standard then return if doesnt go through I think.
Thanks. The starting point is if the parties have clearly agreed to a tenancy and that has been reduced to writing then the fact of a signature is irrelevant. A verbal agreement is in fact sufficient to create a tenancy. It depends what you can evidence in this respect.
However if the agent used a subject to contract formula the subject to contract formula changes this. The formula comes into force once either party expresses an offer or acceptance of an offer as being ‘subject to contract’ and will remain in force even if following correspondence does not bear the same formulation until it is specifically brought to an end. Longman v Viscount Chelsea the Court made clear that this means that the “relationship does not become binding until there is a signed contract by both parties and until this happens either party is free to withdraw without any penalty whatsoever.
the formula can be brought to an end by either of you agreeing that the formula should no longer apply or one or more of the parties performing an action which sets the formula to one side. The most obvious of these is provision of the keys and the acceptance of rent and deposit payments. A deposit to enable the agents to start reference checks does not count and it would need to be deposit payable under the tenancy agreement itself as a damage deposit.
accordingly, much will depend hereupon whether the agency's be subject to contract formula in correspondence with the prospective tenant
if they did, providing no damage deposit more rent was accepted by the agent on your behalf, the fact that you did not sign the tenancy agreement should enable you to avoid the formation of a contract.
If however they did not use the subject to contract formula, the fact that a tenancy agreement was produced and agreed and the prospective tenant signed the same can be sufficient for the prospective tenant to claim the existence of a contract
and if there was an exisiting contract starting on the 20th MAy. Would this not mean there was an implied term to withdraw before this date? or what is my position on this contract not starting
so the first thing to establish is the use of the subject to contract formula as this is likely to be key in establishing your position as above. If you find that this phrase was not used and therefore a contract does exist then unfortunately there is no basis for you to withdraw from the contract unilaterally. The tenancy would need to be made available to the tenant unless a figure could be agreed between you for him to surrender the tenancy which is entirely a matter of negotiation
however, typically agents will or at least should use the subject to contract formula and I hope will be this agent did so and accordingly you will be able to avoid contractual relationship on the above basis
is there anything above I can clarify for you?
Does the above answer all your questions or is there anything I can clarify or help with any further?