Changing Your Mind

[twhale427]

What is the name of your state? Michigan

My wife and I recently signed a lease agreement on a Friday Afternoon at 4pm. The lease was to rent a townhouse for 1 year at $900 mo rent. I also gave them a personal check for $900 for a deposit. My wife and I currently own a home and are selling it - so the lease agreement was contingent upon us closing the home (though no date was referenced on the lease contingency). Prior to signing the lease we verbally agreed with the wife of the couple that would have been our landlords that if anything happend to affect the closing of our home or anything else within the next couple weeks then we would be entitled to a full refund of the deposit.

After having time to think about it more - along with a better rental option coming up over the weekend - I informed the Landlord of the lease agreement that we had changed our minds via email on the following Monday evening and a subsequent letter sent the following morning (Tuesday). I was surprised when I talked with the lady on Tuesday morning when she said that was fine, but they would keep the $900 deposit. I immediately put a stop payment on the check and the proceeded to WD the money out of the bank. They have since issued a letter to us stating that they would refund the deposit only in the event that the could validate that our house didn't close per our contingency. I am not sure if they are aware that I put a stop payment on the check or not.

Since there was no date on the contingency and since we had a verbal agreement that two weeks out notice was still good in order to get the deposit back - are we liable for anything? I don't believe we have caused them any harm in their ability to rent to someone else - we're only talking the equivalent of 1 business day.

I offered to pro-rate the deposit for their time and consideration in the amount of $100 even - but they did not accept...

 

[CourtClerk]

What is the name of your state? Michigan

My wife and I recently signed a lease agreement on a Friday Afternoon at 4pm. The lease was to rent a townhouse for 1 year at $900 mo rent. I also gave them a personal check for $900 for a deposit. My wife and I currently own a home and are selling it - so the lease agreement was contingent upon us closing the home (though no date was referenced on the lease contingency). Prior to signing the lease we verbally agreed with the wife of the couple that would have been our landlords that if anything happend to affect the closing of our home or anything else within the next couple weeks then we would be entitled to a full refund of the deposit.

Ok... all you have to do is produce the writing that says that and you and your wife will be fine. Oops... it was a verbal agreement. Let me give you a quick lesson. There are no verbal agreements aside of a written agreement and there are certainly no verbal agreements in real estate transactions.

After having time to think about it more - along with a better rental option coming up over the weekend - I informed the Landlord of the lease agreement that we had changed our minds via email on the following Monday evening and a subsequent letter sent the following morning (Tuesday). I was surprised when I talked with the lady on Tuesday morning when she said that was fine, but they would keep the $900 deposit. I immediately put a stop payment on the check and the proceeded to WD the money out of the bank. They have since issued a letter to us stating that they would refund the deposit only in the event that the could validate that our house didn't close per our contingency. I am not sure if they are aware that I put a stop payment on the check or not.

You should be a nice person and tell them so that they don't incur any fees in trying to cash the check you gave them. I mean, you've already set yourself up for a little lawsuit. Don't make it worse.

Since there was no date on the contingency and since we had a verbal agreement that two weeks out notice was still good in order to get the deposit back - are we liable for anything? I don't believe we have caused them any harm in their ability to rent to someone else - we're only talking the equivalent of 1 business day.

I'm almost positive once you get into court, your story about your verbal agreement will become greater, and they will absolutely deny that there was a verbal agreement and that's why they had you sign a lease. Then you will owe them more than just $900.

I offered to pro-rate the deposit for their time and consideration in the amount of $100 even - but they did not accept...[/QUOTE]

 

[twhale427]

So there is no recourse for "Changing your mind"?

We're only talking one full business day on a commitment of $900 and $900 a month for a year. I cannot believe a judge would allow them more than a small proration and any fees associated with trying to cash the check. I only put the stop check on because they did not seem to want to be reasonable. I mean - insisting that they keep the full deposit even though I told them we had changed our mind...

Are you stating that the only way we are not liable for this would be to not sell our home based on the contingency we had? Even though there is not end date on the contingency?

I realize I should have reviewed the contract etc. et al - but I haven't rented in over 20 years and did not think this through when we signed the lease...

 

[Zigner]

I only put the stop check on because they did not seem to want to be reasonable.

Ok, let's assume that the "contingency" WAS considered binding...you already admit that the reason you don't want to lease is NOT because your house didn't sell.

It is not the LL that is being unreasonable here...

 

[twhale427]

Yes...but

Yes Z - but is there no recourse for changing your mind? I know in many contracts you have up to 72 hours to change your mind and cancel it with out legal recourse...

Regardless, I think it is unreasonable to keep $900 when you have not been put out anything. We weren't suppose to move in for a month yet even if our home does sell. As such - how can we be liable for any damages as a result of our change of mindset? I thought this was the place - I was wrong - I asked for their forgiveness and recourse and they tried to school me for $900 bucks...I'm being unreasonable?

 

[BoredAtty]

What is the name of your state? Michigan

My wife and I recently signed a lease agreement on a Friday Afternoon at 4pm. The lease was to rent a townhouse for 1 year at $900 mo rent. I also gave them a personal check for $900 for a deposit. My wife and I currently own a home and are selling it - so the lease agreement was contingent upon us closing the home (though no date was referenced on the lease contingency). Prior to signing the lease we verbally agreed with the wife of the couple that would have been our landlords that if anything happend to affect the closing of our home or anything else within the next couple weeks then we would be entitled to a full refund of the deposit.

After having time to think about it more - along with a better rental option coming up over the weekend - I informed the Landlord of the lease agreement that we had changed our minds via email on the following Monday evening and a subsequent letter sent the following morning (Tuesday). I was surprised when I talked with the lady on Tuesday morning when she said that was fine, but they would keep the $900 deposit. I immediately put a stop payment on the check and the proceeded to WD the money out of the bank. They have since issued a letter to us stating that they would refund the deposit only in the event that the could validate that our house didn't close per our contingency. I am not sure if they are aware that I put a stop payment on the check or not.

Since there was no date on the contingency and since we had a verbal agreement that two weeks out notice was still good in order to get the deposit back - are we liable for anything? I don't believe we have caused them any harm in their ability to rent to someone else - we're only talking the equivalent of 1 business day.

I offered to pro-rate the deposit for their time and consideration in the amount of $100 even - but they did not accept...

Once you signed the lease, you became obligated. It doesn't matter if you changed your mind just 5 minutes later.

That said, the landlord is obligated to mitigate his damages by renting it to somebody else. The amount you owe will then be prorated. However, you are responsible for the rent while the townhouse remains vacant during the leasing period.

 

[LindaP777]

OK, twhale, let's just think for a minute . . . let's say you did sell you house and you needed somewhere to move. The LL entered into a legally binding contract with you, and took your secuirty deposit. You go home, pack everything up, return with your rental truck to unload (it was only the next day) and the LL greets you at the door with your money and said he changed his mind. What do you think should happen? Should the LL be allowed to change his mind? After all, it was only one day.

A written contract is a binding contract. The LL was being nice by accepting a verbal agreement that he would not hold you to the lease if your house did not sell.

Questions;
Did, in fact, your house sell? If not, give the LL the proof. If it did, be prepared for him to sue you for the balance of the lease (or until he finds a new tenant). CAUTION; this could be far and above the $900 (I'd let him keep it.)

Where are you living now? Did you rent somewhere else?

 

[Alaska landlord]

After having time to think about it more - along with a better rental option coming up over the weekend

This is why its important that whenever you receive a check you go to the tenants bank and immediately cash it.

 

[twhale427]

So what I hear is...

So the only recourse I have is to not sell my current home and then the contingency we put into the lease agreement would take effect? However - since there is no date on the contingency - when would that be active?

Are all you people landlords?

Look - I am 40 years old and haven't rented for over twenty years. We jumped the gun because we had an offer on the house and I didn't want to get stuck somewhere we didn't want to go. I honestly cannot believe that you don't have at least a few days to change your mind. We had a verbal agreement with people I thought were understanding.

Shame on me for not waiting...but I would think I judge would side with me to a degree - no?

This really stinks...I did not intentionally mislead the LL - I simply made a mistake.

Also - what about the fact that the contingency has no end date - i.e. they could say that legally if we closed any time over the term of the lease we are liable - I cannot believe that would hold up in court...

I understand the argument the other way around that if we did sell our home and the LL pulled the rug out from under us we would be really upset - but we are talking the course of 1 business day and we would not have been moving in for almost a month! It's not like we waited until the last minute and said - well - sorry...I would expect to lose the deposit then...

 

[Alaska landlord]

Look - I am 40 years old and haven't rented for over twenty years. We jumped the gun because we had an offer on the house and I didn't want to get stuck somewhere we didn't want to go. I honestly cannot believe that you don't have at least a few days to change your mind. We had a verbal agreement with people I thought were understanding.

Your age, lack of renting knowledge, reason’s for wanting to break your lease are not a concern for your landlord. Your landlord could have turned down other prospects within minutes of speaking to you.

Shame on me for not waiting...but I would think I judge would side with me to a degree no?

Not likely

This really stinks...I did not intentionally mislead the LL - I simply made a mistake.

Sorry, but you did sign the contract and the LL should not have to pay for your mistakes.

Also - what about the fact that the contingency has no end date - i.e. they could say that legally if we closed any time over the term of the lease we are liable - I cannot believe that would hold up in court...

Sounds like a negotiation issue. I hope you do take the time to set contingencies with you home purchase.

I understand the argument the other way around that if we did sell our home and the LL pulled the rug out from under us we would be really upset - but we are talking the course of 1 business day and we would not have been moving in for almost a month! It's not like we waited until the last minute and said - well - sorry...I would expect to lose the deposit then...

Irrelevant.

Call the other apartment you signed with and see if they will let you out with lesser penalties.

 

[aabbcc]

You are in the wrong. You received at least one response from an attorney. But, you ask if we are landlords.

Why don't you get your own attorney (you really need one) and see if you get a different answer?

 

[twhale427]

This'll be interesting...

Alaska...man you must have had some real issues up there with renters...You don't seem to have much heart in the matter...

I doubt the LL would have lost too many prospects in the course of the three days - this was the first townhouse in a new development of four two unit townhouses. If they had other prospects already they would have been showing them the other townhouses.

I appreciate all of you who are chipping in on the discussion. Though you all seem to be leaning against what I believe my rights should be in this instance - it gives me more cause than before to see this thing go to court...

I may be in the wrong, but the true question is - what monetary value can be associated with my degree of wrongness - is that not it?

 

[ecmst12]

The monetary value is the deposit plus the full cost of rent until another tenant is found, plus advertising costs to find a new tenant. There is no "grace period" on signing a contract unless the contract specifically contains one, or there is a specific law stating there must be one. There is no specific law for rental contracts.

 

[Cvillecpm]

The 72 hour rescind ONLY applies to mortgages on peoples' personal residences such as a re-fi, HELOC or other lien.

You should not have stopped payment on your check * it can still clear through their bank if it was scanned and presented prior to your stop payment being actually signed at your bank.

Your landlords can wait in the weeds, find a new tenant and sue you for their damages and your stopping payment on your deposit/consideration shows "bad faith".....have your attorney explain that to you.

 

[tranquility]

I doubt the LL would have lost too many prospects in the course of the three days - this was the first townhouse in a new development of four two unit townhouses. If they had other prospects already they would have been showing them the other townhouses

.

This is not good news, but bad news. Very, very, bad news. You see, a lease is a contract. In breach, a contractual remedy is the benefit of the bargain. That is, the landlord has the right to a year's rent at $900 a month in exchange for you having possession of the unit for that year. As BoredAtty wrote, the landlord, once he had notice of your intention to breach the contract, has the duty to mitigate his damages. In a market or development with little interest, the landlord's reasonable efforts to rent the unit may be unsuccessful. If he cannot rent the unit for a whole year, he could sue you for the entire amount of the lease.

Hard to believe, but only if you had done something in tort (vandalism, theft, whatever), then the quoted text could be of some use as the remedy is to return the person to where he was before the tort. Since there is little rental activity, you would argue you only had to pay for repairs and should not have to pay for the rental value during the time.