When is a contract for renting a house signed?

Keith99

My sister is going to rent a house, however the money for the deposit has fallen through. I've spoken to her and she said that she has signed for the house, however she hasn't paid the deposit or first month's rent.

I haven't rented for a while and was wondering whether she has actually signed the lease as she hasn't paid deposit etc.

I know you helpful people won't know but what would the normal process be for getting a house, she has paid the agency fee but I always thought it was when you paid the deposit that you confirm your lease?

I could be wrong but hopefully some one can give me some advice to tell her.

She was going to get a loan for the deposit (not impressed when I heard this!) but she went through enhance finance (£70 fee) and I don't think she will get her loan as googled them and found loads of bad reviews!

Thanks for any help!

ruggedtoast

When the landlord has also signed the tenancy and returned it to you. Doubtful they will do this until the deposit is paid I am afraid.

Currently its just a piece of paper with your sisters name on it.

G_M

Depends what you mean by 'deposit'?

Many agents/landlords take a 'holding deposit' - this shows good faith by the prospective tenant. The LL stops advertising the property and takes up tenant references etc. If the references fail, the 'deposit' may or may not be returned, depending on the terms.

If the references are passed, then the tenancy agreement is prepared. It becomes binding when both sides have signed, which may happen simultaneously, or the LL may sign in advance and then get the tenant to sign, or vice verse. Usually the 1st months rent and 'damage' or 'security' deposit are taken when the tenant signs.

What has she signed? Has the LL/agent signed? If so, there's a contract, irrespective of what she has/has not paid.

Keith99

They have taken a holding deposit.

She has signed the tenancy agreement but I am unsure if the LL has signed it yet. Would a LL really sign the agreement if no damages etc deposit has been taken? She can not afford the deposit now, what is the worse case scenario if the LL has signed it?

She has no assets or money for the LL to recover any money owing.

G_M

Keith99 wrote: »

They have taken a holding deposit.

She has signed the tenancy agreement but I am unsure if the LL has signed it yet. Would a LL really sign the agreement if no damages etc deposit has been taken? She can not afford the deposit now, what is the worse case scenario if the LL has signed it?

She has no assets or money for the LL to recover any money owing.

Breach of contract.
Sued.
County court judgement against her.
Default of CCJ.
CCJ recorded on credit record.
Bailiff and /or salary deduction/ etc ordered by court.

Keith99

G_M wrote: »

Breach of contract.
Sued.
County court judgement against her.
Default of CCJ.
CCJ recorded on credit record.
Bailiff and /or salary deduction/ etc ordered by court.

Yep thought something like that... she has been very silly. I am hoping the LL has not signed it.

G_M

You asked for worst case scenario. But the likely scenario is either
1) landlord has not signed, sister withdraws asap, holding deposit is lost.
2) landlord has signed, sister withdraws, LL does not relish the time, stress, agro taking someone to court esp as she has no assets, holding deposit is lost.

End of story. But the key is the quicker she explains, the more likely to get sympathy.

Keith99

G_M wrote: »

You asked for worst case scenario. But the likely scenario is either
1) landlord has not signed, sister withdraws asap, holding deposit is lost.
2) landlord has signed, sister withdraws, LL does not relish the time, stress, agro taking someone to court esp as she has no assets, holding deposit is lost.

End of story. But the key is the quicker she explains, the more likely to get sympathy.

Cheers for the post, I have TOLD her to phone them when they open tomorrow to find out. Explain the situation and hopefully go from there, I asked her if she could afford it... turns out she couldn't!

may_fair

G_M wrote: »

You asked for worst case scenario. But the likely scenario is either
1) landlord has not signed, sister withdraws asap, holding deposit is lost.

If the sister has signed the tenancy contract and given it to the LL or agent, then it's unlikely she could simply withdraw and lose only the holding deposit; LL would have a claim for any additional losses caused by breach of contract.

saabay

Has your sister been in touch with the agent yet?
Whilst she may have signed the agreement in advance of completing it, without any consideration, i.e. the money, there isn't a contract. Also, they cannot complete it unilaterally - it must be agreed to be completed by both parties.
If the landlord was able to demonstrate that there was a contract (unlikely) then what damages is he seeking to recover? He has kept the holding deposit. It is likely to be a few quid in administration and lost rent for a few days. He cannot claim for the whole six months rent because your sister will not have had the benefit of the property.
She must speak to them as soon as possible.

G_M

may_fair wrote: »

If the sister has signed the tenancy contract and given it to the LL or agent, then it's unlikely she could simply withdraw and lose only the holding deposit; LL would have a claim for any additional losses caused by breach of contract.

If you look at my earlier post mayfair, I advised on worst case scenario. This post attempted to consider what a reasonable LL might actually do - not what he legally could do.

As for what he will do, only time will tell!