Is this AST binding or not? - Please help!!!

[fred18]

Hi all, just found this site after a sleepless night. Can anyone help?

My brother and three others signed a joint AST agreement in March for a rental starting at the beginning of July. This included the standard contract and a supplementary agreement 'forming part of the standard agreement' which included guarantor etc.

One of the three others signed the contract, but not the second part (and didn't pay deposit). The landlord then told them (and us) several times quite clearly that the agreement wasn't valid until all four had completed all the formalities (i.e. including the supplement), and that we didn't have a rental agreement until this was done.

The fourth person didn't do this, and the landlord said that he had in effect withdrawn. Since then, they've been trying to find a fourth person, and the landlord had given them deadlines to do this, advertising the house for four, and saying he had other interested parties.

The latest is that the landlord has now told them, less than a month before the tenancy is due to start, that the original agreement IS valid, and that the three who did complete all the parts are liable to pay the extra rent until they get a fourth person, and that he wants a month's notice in writing from all three if they want to rescind the agreement. We don't know whether there was any verbal arrangement with the others to go forward as three, but my brother certainly didn't agree to it. He has already found somewhere else.

Can anyone please help? Is that original agreement valid, is my brother still bound and liable for the extra rent? Any advice would be much appreciated...

[Aequitas]

The important thing here is that it is the action of the landlord that is paramount in granting the tenancy. Altthough writing is not essential to create a tenancy for three years or less, if nothing was signed by the landlord and no rent was paid and no one went into occuaption it is difficult to see how in your brother's circumstances a tenancy can have come about. In fact, strictly, even if the landlord did sign something the best he could have done is to enter into a contract to create a tenancy since the tenancy does not start until the tenant goes into occupation. The signing of the parts by the the three who signed does not bind them to the terms unless and until the tenancy comes into effect.

So first argue: there is no tenancy nor a contract to create a tenancy.

Secondly argue, even if there was a contract the landlord has rescinded it by stating that there was no agreement. Your brother, relying on that statement, has made other arrangements and it would be unconscionable for the landlord to now seek to rely on it.

[fred18]

Thanks for that Aequitas.

Just to clarify, we believe that the original four signed as well as the landlord (although the name of the fourth person was wrong - he was a late replacement - and corrected afterwards on his copy by the landlord, and there may well have been other inaccuracies). We don't have a copy of this agreement, but we have asked for one.

The landlord refused the fourth person without the additional agreement and deposit, but said that he had 'effectively withdrawn.' So he essentially decided that the agreement was invalid, and then said this on several occasions in emails. If it was valid without the additions, why would he be allowed to reject the fourth person, then demand the shortfall from the three remaining? This is clearly different from if everything had been fine, and then half-way through the rental a tenant had run away!

Am I right in thinking that my brother can withdraw from this joint agreement without penalty before the disputed tenancy comes into effect in July?

[Esio Trot]

For there to be a valid contract there needs to be a consideration i.e. money must have been paid under the contract. Was there?

[fred18]

Three of the four signatories paid a deposit, stipulated on the contract as payable on signing. The fourth did not, hence the problem.

Does this mean that the entire contract was invalidated (i.e. for all of them) if one of the four did not pay his deposit?

[Aequitas]

If all parties signed there was a contract. The fact that one party did not pay his deposit makes the contract rescindible by the landlord, but not the tenants.

As I suggested above, I believe that the landord's action following non-payment rescinded the contract. He cannot now undo the recission.

[Aequitas]

Originally Posted by Esio Trot

For there to be a valid contract there needs to be a consideration i.e. money must have been paid under the contract. Was there?

I think that is better phrased as "For there to be a valid contract there needs to be a consideration i.e. money must have been paid or be payable under the contract."

[fred18]

Thanks for the excellent advice, Aequitas.

The line we're taking is certainly that the landlord rescinded any agreement there was: his statements and behaviour overwhelmingly suggested this. Only when he thought he was going to miss out did he bring up the old deal.

Presumably this means he rescinded the entire agreement (as a joint contract), rather than being able to pick and choose, keeping the other three to their parts all that time later...

[Aequitas]

He cannot pick and choose - it is all or nothing.