Deposit paid, no contract signed

wackojacko

Hi
What happens if a deposit is paid but no contract is signed. Can you get it back if you pull out of the deal when renting
Thanks

D3PO

you still have a part 4 tenancy so you must still provide the correct notice, assuming then you have no outstanding bills, rent due or have caused any damage then you would be entitled to your deposit back.

how long have you lived there , how much notice have you given ?

StillWaters

I read it as the OP not having moved in yet, perhaps they can clarify.

wackojacko

StillWaters wrote: »

I read it as the OP not having moved in yet, perhaps they can clarify.

Correct not moved in yet. Signed a form alright but date supposed to move in hasn't happened.

Bluegrass1

wackojacko wrote: »

Correct not moved in yet. Signed a form alright but date supposed to move in hasn't happened.

If a deposit has been paid but no lease signed then the deposit must be repaid if the letting is not going ahead and the lease is not signed.

xper

wackojacko wrote: »

Correct not moved in yet. Signed a form alright but date supposed to move in hasn't happened.

So you signed something. What did it say?

D3PO

xper wrote: »

So you signed something. What did it say?

exactly. Stop drip feeing us information and give us the full detail if you want a proper response.

what did you sign ?
when are you due to move in ?
when did you pay the deposit ?
was the accommodation free immediately or just form the date you were due to move in ?

all of these have a bearing an the answer.

wackojacko

Signed a tennent application form.

Due to move in coming Friday.
Was supposed to move in Monday
Deposit paid last Friday
accommodation was free to move in but delay in getting ESB turned on.

D3PO wrote: »

exactly. Stop drip feeing us information and give us the full detail if you want a proper response.

what did you sign ?
when are you due to move in ?
when did you pay the deposit ?
was the accommodation free immediately or just form the date you were due to move in ?

all of these have a bearing an the answer.

StillWaters

In that case I feel the LL would be justified in deducting a week or 2 rent, as that is how much he is out by. Did the form you sign say anything about the deposit?

wackojacko

StillWaters wrote: »

In that case I feel the LL would be justified in deducting a week or 2 rent, as that is how much he is out by. Did the form you sign say anything about the deposit?

No it didn't say anything about the deposit. The landlord is not out by any amount as the house is not ready to be rented yet

StillWaters

wackojacko wrote: »

No it didn't say anything about the deposit. The landlord is not out by any amount as the house is not ready to be rented yet

You were due to move in this Friday, it's unlikely he will be able to readvertise and get someone to move in on that date now. It's going to take him another week at least.

Bluegrass1

StillWaters wrote: »

You were due to move in this Friday, it's unlikely he will be able to readvertise and get someone to move in on that date now. It's going to take him another week at least.

If there was no lease signed, that is the landlords problem.

Grandpa Hassan

If I understand this right, you paid a deposit and were supposed to move in Monday. There was a delay due to ESB. So now your scheduled move in date is Friday. You haven't paid any rent yet, so you're not out of pocket in respect of Monday to Friday.

So now 2 days before you are due to move in, you want to pull out.

That is too short notice and IMO the LL is justified in deducting a weeks rent from the deposit.

odds_on

Bluegrass1 wrote: »

If there was no lease signed, that is the landlords problem.

A rental agreement may be written or verbal.

The landlord made an offer and the prospective tenant agreed to that offer and paid a deposit. The fact that the first month's rent had not been paid may have a bearing on the situation.

Whose fault was it that there was a problem with the getting the ESB turned on - normally this would be in the tenant's name. Was there a problem on your side as regards the ESB?

Bluegrass1

odds_on wrote: »

A rental agreement may be written or verbal.

The landlord made an offer and the prospective tenant agreed to that offer and paid a deposit. The fact that the first month's rent had not been paid may have a bearing on the situation.

Whose fault was it that there was a problem with the getting the ESB turned on - normally this would be in the tenant's name. Was there a problem on your side as regards the ESB?

Judgment McWilliam J. delivered the 5th May.1978

The Plaintiff's claim is for specific performance of an oral agreement for the surrender of a lease of premises at 328, North Circular Road, Dublin, by the Defendant to the Plaintiff for the sum of £4,000.00

At some time prior to 25th August, 1975, the. Plaintiff purchased the entire premises comprising No. 328, North Circular Road, from the Defendant. The Plaintiff is a chartered accountant and had audited the Defendant's books for a number of years previously and probably had his offices in the premises during this period. On 25th August, 1975, the Plaintiff demised the shop and yard portion of the premises to the Defendant for a term of 21 years from that day at the yearly rent of £1,000.00 subject to periodic reviews as therein provided.

The Defendant is a family company of whom the shareholders were a Mr James Power, his wife, Mrs. Doris Power, and his son, Mr. Dermot Power. Mr. James Power appears to have been effectively in control of the business although another son, Mr. Brian Power, assisted in the management. The business is a wallpaper and hardware business and was carried on both in these premises and in premises at Talbot Street.
In 1976 the company was experiencing financial difficulties and the premises at North Circular Road were advertised for sale. The Plaintiff was regularly consulted by Mr. James Power with regard to various matters connected with the business and was made aware that valuations of £3,000.00 and £3,500.00 had been obtained for the Defendants interest in the premises. It is not clear whether offers of either of these sums were obtained or not. At all events, after some discussion, the Plaintiff agreed with Mr. James Power to buy the Power interest in the premises for the sum of £4,000.00 if he could get a loan from the bank. It appears from a letter of 16th December, 1976, from the Plaintiff to Mr. James Power that the bank would only advance the sum of £3,500.00 and, by this letter, the Plaintiff offered to pay a sum of £3,750.00 cash and forego fees due to him of £300.00. A further letter of 29th December, 1976, from the Plaintiff confirmed an agreement at a meeting on 23rd December, 1976, at which Mr. Power accepted this offer. A cheque for £200.00 was enclosed and the Plaintiff also confirmed that vacant possession would be accepted on 31st January, 1977. Mr. Power, who appears to have suffered from ill health for some time, died on 1st January, 1977, and the Plaintiff wrote a letter of sympathy to Mrs. Doris Power on 4th January, 1977. This letter was acknowledged by Mrs. Power by an undated letter which concluded as follows:- "I will call to see you re. Jim's arrangement"
31st January, 1977, was a Monday and, on the previous Saturday, Mr. Brian Power called with the Plaintiff, offered to pay back the £200.00 and said he was not going through with the transaction. The Plaintiff refused to accept the money or to abandon the contract and a cheque for £200.00 was sent to him on 4th February, 1977, which was not accepted. The Defendant has remained in occupation of the premises.

Evidence was tendered to establish that Mr. James Power intended to terminate his business at the premises at the end of January, and took the necessary steps with regard to the redundancy of his employees and I am satisfied that there was an oral agreement on the terms alleged by the Plaintiff Indeed, this is not seriously disputed.
The claim for specific performance, is defended on the grounds that there was no memorandum in writing of the agreement signed on behalf of the Defendant and that there was no authority on the part of the members of the Power family involved to enter into the contract or sign a note or memorandum of it on behalf of the Defendant.

On behalf of the Plaintiff it is submitted that the letter from Mrs. Doris Power, by its reference to "Jim's arrangement" is sufficient to incorporate the letters of 16th and 29th December, 1976, so as to form a memorandum, and that an engagement by the Plaintiff to make a letting of the premises to a building society or the payment of the sum of £200.00 in part payment of the purchase price constituted a sufficient act of part performance to take the case out of the statute.

With regard to the sufficiency of the note or memorandum, I have been referred to the case of Burgess . v. Cox (1950) 2 All E.R. 1212 as supporting the proposition that Mrs. Power's undated note can be read in conjunction with the Plaintiff's letter so as to form a sufficient memorandum. That case was very different from the present and the principle applied in it was that, if two documents are placed side by side and no parol evidence is necessary to connect one with the other and they clearly relate to the same transaction on the face of the two of them when so placed, they may be incorporated so as to form a sufficient memorandum. That is not the position in the present case. There is nothing whatsoever in the letter from Mrs. Power to indicate the nature of the arrangement to which she was referring or to indicate that she had ever seen or been aware of the letters from the Plaintiff. Accordingly, I hold that there was not any sufficient note or memorandum signed by or on behalf of the Defendant.

The Plaintiff then relies on acts of part performance as taking the case out of the statute. To take the first of these The Plaintiff has given evidence that he made an arrangement with an agent to let the premises to a building society with vacant possession of 1st February, 1977, at the yearly rent of £2,500.00 and rates. It does not appear that there was any contract in writing with the building society and, in cross-examination, the Plaintiff stated that he had had negotiations about letting in December, towards the end of that month, and that he wrote to the estate agent that he would have vacant possession on 31st January. On this aspect of part performance I have been referred to the following cases:-
Lowry . v. Reid (1927) N.I. 142

Brough . v. Nettleton (1921) 2 Ch. 25

Broughton v. Snook (1938) 1 Ch. 505

Daniels . v. Trefusis (1914) 1 Ch. 788

Estate of Earl of Longford 5 L.R.I. 99.

I have also read the case of Crowley . v. Sullivan (1900) 2 I.R. 478 cited in the case of Lowry . v. Reid . In each of these cases the Plaintiff had taken some conclusive or irrevocable or prejudicial step in pursuance of the contract, such as conveying land to a third party, entering into occupation of premises agreed to be let or sold to him, ejecting tenants at the request of the other party or commencing to carry on a business in partnership in pursuance or an agreement to do so. The principle established by these and other cases appears to be that, where the party seeking relief in proceedings has taken some step in pursuant of the contract which has left him in such a position that it would amount to a fraud or be inequitable on the part of the other party to rely on the fact that there was no sufficient memorandum of the contract, the case is taken out of the statute and the Court will enforce the contract. With regard to negotiating a tenancy in the present case, the Plaintiff does not appear to have prejudiced himself in any way by reason of the contract with the Defendant or left himself in a position where he could be required to perform any act which he was not able to do. He merely appears to have consulted or instructed estate agents with regard to negotiating a letting and to have discussed terms with them and with a possible tenant but without entering into any binding contract. Accordingly, apart from causing him disappointment at the loss of his bargain, I cannot see that there is, on these facts, any special equity to take the case out of the statute.
With regard to the payment and acceptance of the sum of £200.00 as part of the purchase price I have been referred to the cases ofSteadman . v. Steadman (1976) A.C. 536 and Re. Gonin ,deceased, (1977) 2 All E.R. 720. It is urged, on the authority of the former case, that, if the payment of the money is referable only to the contract alleged, it is a sufficient act of part performance. Until this case was brought to my attention, I had accepted the proposition that the mere payment of money could not constitute a sufficient act of part performance. Four of the five judges in the House of Lords and two of the three judges in the Court of Appeal refused, in Steadman's case, to accept that this proposition was well founded and, in the unusual circumstances of that case, held that the payment of £100.00 by a husband to his wife was a sufficient act of part performance of a contract containing four provisions for the compromise of matrimonial proceedings. I cannot disagree with the reasoning of the majority of the judges in that case but, accepting that the decision is correct on the question of the mere payment of money constituting an act of part performance sufficient to take the case out of the statute, I must keep before my mind that the statute does provide that a contract for the sale of land shall not be enforceable unless there is a sufficient note or memorandum thereof in writing and that the application of the doctrine of part performance is still confined to cases in which it would be fraudulent or inequitable for a defendant to rely on the statute because a plaintiff has prejudiced himself in some way by reason of the contract. As I have stated, this is not shown to have occurred in the present case and the following passage from the judgment of Lord Reid in Steadman's case at page 541 appears to me to be relevant. It is as follows:-
"Normally the consideration for the purchase of land is a sum of money and there are statements that a sum of money can never be treated as part performance. Such statements would be reasonable if the person pleading the statute tendered repayment of any part of the price which he had received and was thus able to make restitutio in integrum. That would remove any "fraud" or any equity on which the purchaser could properly rely. But to make a general rule that payment of money can never be part performance would seem to me to defeat the whole purpose of the doctrine and I do not think that we are compelled to do that". Here, not only was the sum of money paid comparatively small, but it was actually tendered in repayment to the Plaintiff. Accordingly, I do not accept that this payment was sufficient to take the case out of the statute.
The proposition that Mr. and Mrs. Power did not have a authority to enter into the contract on behalf of the Defendant was not elaborated and is not now relevant, but I should state that it would be repugnant to me to hold, in the absence of compelling authority, that the heads of a family who were principal shareholders in and managers of their family company had not authority to enter into contracts on behalf of their company.

Under these circumstances, the Plaintiff's claim will be I dismissed.

odds_on

I think that there is a difference between commercial leases which you have quoted and residential tenancy leases.

Bluegrass1

odds_on wrote: »

I think that there is a difference between commercial leases which you have quoted and residential tenancy leases.

On what basis?

odds_on

Bluegrass1 wrote: »

On what basis?

Residential Tenancies Act 2004, Part 1, Section 4
‘‘tenancy agreement’’ includes an oral tenancy agreement;

gaius c

wackojacko wrote: »

Correct not moved in yet. Signed a form alright but date supposed to move in hasn't happened.

If they won't return it, then you have to go to the small claims court. PRTB only get involved when the contract has been signed.

Bluegrass1

odds_on wrote: »

Residential Tenancies Act 2004, Part 1, Section 4
‘‘tenancy agreement’’ includes an oral tenancy agreement;

That definition does not replace the Section 2 of the Statute of Frauds (Ireland ) Act 1695. It only deals with a situation where a tenant has gone into occupation without a written lease.

D3PO

Bluegrass1 wrote: »

That definition does not replace the Section 2 of the Statute of Frauds (Ireland ) Act 1695. It only deals with a situation where a tenant has gone into occupation without a written lease.

In your opinion. You asked why residential was different to commercial when you quoted legal judgments on commercial leases and its a reasonable response.

Your reading of it is that its the same but its fair for people to question this if there are not residential legal judgments to back up your assertion.

In this case if I were the LL in this case I would deduct the cost of readvertisiting and any lost rent between the time the tenancy should have begun and when I got another tenant in. I would then refund the difference to them.

If they weren't happy Id tell the OP they can fill their boots and take it to court. I think many others would follow suit.

Bluegrass1

D3PO wrote: »

In your opinion. You asked why residential was different to commercial when you quoted legal judgments on commercial leases and its a reasonable response.

Your reading of it is that its the same but its fair for people to question this if there are not residential legal judgments to back up your assertion.

In this case if I were the LL in this case I would deduct the cost of readvertisiting and any lost rent between the time the tenancy should have begun and when I got another tenant in. I would then refund the difference to them.

If they weren't happy Id tell the OP they can fill their boots and take it to court. I think many others would follow suit.

There is no reference to the Statute of Frauds in the Residendial Tenancies Act. It is not my opinion, it is the decision of the legislature. The case is a general proposition that the payment of money alone is not an act of part performance of a contract and a contract cannot be inferred from the payment of money alone. That does not differ whether it is residential or commercial. The question is whether a lease has come into being or not. That fact that a lease can be made orally does not mean that a lease was in fact made. Most deposits are paid subject to contract with the rent in advance and the balance of any deposit paid when signing the lease. If in fact an oral lease had been created the landlord is in breach of it because the accommodation is not ready. He can hardly look for damages for his own neglect.

D3PO

Im not disagreeing with you, but you hit the nail on the head. We cannot decide if in fact an oral lease was made in this case, but if I was the LL and I felt it was then I would be telling the OP to go sue me if they disagreed.

As for the accommodation not being ready we don't really know the facts here, but from the OP's comments that seems highly unlikely. If something doesn't sound right it normally isn't and the OP saying the ESB wouldn't be ready for a week just doesn't sound right.

djimi

Bluegrass1 wrote: »

Most deposits are paid subject to contract with the rent in advance and the balance of any deposit paid when signing the lease. If in fact an oral lease had been created the landlord is in breach of it because the accommodation is not ready.

I would have thought that it would be the other way around; the deposit would be given in advance and the first months rent up front upon the signing of the lease and the handing over of the keys. Especially where the property is not yet ready to move into, and the deposit is being paid so that it will be taken off the market and reserved for the new tenant.

djimi

D3PO wrote: »

In this case if I were the LL in this case I would deduct the cost of readvertisiting and any lost rent between the time the tenancy should have begun and when I got another tenant in. I would then refund the difference to them.

If they weren't happy Id tell the OP they can fill their boots and take it to court. I think many others would follow suit.

I agree with this; I dont know what a court would award to the landlord, but in this case I would be deducting the cost of readvertising the property at the very least (assuming it had been taken off the market), and if the was-to-be tenant wants to persue it further then let them.

Bluegrass1

djimi wrote: »

I would have thought that it would be the other way around; the deposit would be given in advance and the first months rent up front upon the signing of the lease and the handing over of the keys. Especially where the property is not yet ready to move into, and the deposit is being paid so that it will be taken off the market and reserved for the new tenant.

That is the point. The payment of the deposit is "subject to contract". That being the case either party can pull the plug. The deposit is only an indication of good faith. It is the basis of all gazumping.

D3PO

Bluegrass1 wrote: »

That is the point. The payment of the deposit is "subject to contract". That being the case either party can pull the plug. The deposit is only an indication of good faith. It is the basis of all gazumping.

yes but now your putting house sales and rentals in the same category which isn't really a relevant comparison.

It is accepted that a deposit on a house is subject to contract and it would be verbally mentioned by the EA during the process.

However it would equally be accepted that a deposit on a rental is to secure the rental. Which would not be subject to contract unless one of the parties said it was subject to the lease being signed, references being checked out etc. There is no indication that this is the case here.

It would seem the conversation went like this.

OP "I love the apartment id like to take it."

LL " Well the rent is X plus a months deposit of X"

OP "OK heres the deposit when can I move in"

LL "You can move in on X day"

That to me indicates a verbal contract to move in. If that was what occurred which isn't an unreasonable assumption I would ascertain there to be an oral contract between the OP & the LL.

I may be wrong but if I were the LL like I said Id make the OP go to court to prove my assertion to be incorrect.

Bluegrass1

D3PO wrote: »

yes but now your putting house sales and rentals in the same category which isn't really a relevant comparison.

It is accepted that a deposit on a house is subject to contract and it would be verbally mentioned by the EA during the process.

However it would equally be accepted that a deposit on a rental is to secure the rental. Which would not be subject to contract unless one of the parties said it was subject to the lease being signed, references being checked out etc. There is no indication that this is the case here.

It would seem the conversation went like this.

OP "I love the apartment id like to take it."

LL " Well the rent is X plus a months deposit of X"

OP "OK heres the deposit when can I move in"

LL "You can move in on X day"

That to me indicates a verbal contract to move in. If that was what occurred which isn't an unreasonable assumption I would ascertain there to be an oral contract between the OP & the LL.

I may be wrong but if I were the LL like I said Id make the OP go to court to prove my assertion to be incorrect.

There may have been an oral agreement for a lease but in order to be enforceable it must be evidenced in writing under the Statute of Frauds. That is the case for "the sale of land or any interest therein" (Which includes leases). If the place wasn't ready on X day the landlord is in breach and the o/p would be entitled to repudiate.

The o/p says he signed a form. It would be interesting to see it.

D3PO

Bluegrass1 wrote: »

There may have been an oral agreement for a lease but in order to be enforceable it must be evidenced in writing under the Statute of Frauds. That is the case for "the sale of land or any interest therein" (Which includes leases). If the place wasn't ready on X day the landlord is in breach and the o/p would be entitled to repudiate.

The o/p says he signed a form. It would be interesting to see it.

Again I don't disagree with what your saying at all, I'm just saying in practical terms if I were the LL I'd make the OP go to court to have their point of view assessed by the courts.


Like I said we don't know the place wasn't ready on X day for sure, I wouldn't be so fast to believe one side of a story, and even if that were the case, an agreement by both parties to move the day to a new day constitutes a new verbal contract

Also I don't know the answer just musing but surely an oral agreement for a lease that hasn't been signed so isn't enforceable then would be enforceable as a part 4 tenancy ?

djimi

Bluegrass1 wrote: »

There may have been an oral agreement for a lease but in order to be enforceable it must be evidenced in writing under the Statute of Frauds.

Correct me if Im wrong, but in tenancy law is it not enough to be able to show that money has changed hands for a rental property in order for a tenancy to be official? It is entirely possible to have a fully legal tenancy without signature ever being put to paper (or, at least, that is my understanding).

D3PO

djimi wrote: »

Correct me if Im wrong, but in tenancy law is it not enough to be able to show that money has changed hands for a rental property in order for a tenancy to be official? It is entirely possible to have a fully legal tenancy without signature ever being put to paper (or, at least, that is my understanding).

absolutely it is. Otherwise many illegal evictions wouldn't be illegal at all, as no contract signed no tenancy.

It cant work both ways.