Homeowner changed mind on prospective tenant

[tenant2021]

I live in Texas and have a real estate sales license.

I helped a friend list their house for rent. They received an application from a prospective tenant with a realtor. My clients were ready to proceed. The other realtor sent a cashiers check to my brokerage. They waited several days and could not receive a response, and no signed lease.

Finally 3 days later the lease gets signed by the prospective tenant. The lack of communication and miscommunication (several times it was communicated the prospective tenant said she signed when she never did). The homeowners never signed anything and are refusing to sign anything with this prospective tenant.

The other realtor is claiming the 3000 cashiers check sent to my brokerage was a deposit and means the lease is accepted? The check was never cashed, and the homeowners never signed anything. They claim they are going to sue me in court and this is illegal.

I will take this as they are just blowing off steam, but wanted to check for advice in case I am mistaken.

 

[quincy]

I live in Texas and have a real estate sales license.

I helped a friend list their house for rent. They received an application from a prospective tenant with a realtor. My clients were ready to proceed. The other realtor sent a cashiers check to my brokerage. They waited several days and could not receive a response, and no signed lease.

Finally 3 days later the lease gets signed by the prospective tenant. The lack of communication and miscommunication (several times it was communicated the prospective tenant said she signed when she never did). The homeowners never signed anything and are refusing to sign anything with this prospective tenant.

The other realtor is claiming the 3000 cashiers check sent to my brokerage was a deposit and means the lease is accepted? They claim they are going to sue me in court and this is illegal. The check was never cashed and my clients never signed anything.

I will take this as they are just blowing off steam, but wanted to check for advice in case I am mistaken.

If a deposit was sent to you with a signed application and a signed lease, it appears your “clients” have accepted the tenancy. Who sent the prospective tenants an application form and a lease?

 

[adjusterjack]

If the prospective tenant sent a check and a signed application and lease and the homeowner did not sign then there was no acceptance of the offer by the homeowner and therefore no contract.

If the homeowner signed a lease form and then sent it to the prospective tenant and then the tenant signed it and returned it with a check and application then there is a contract.

In anticipation of Quincy finding an exception to my comment, I'll provide one here.

If the homeowner or the homeowner's agent said something to the effect of "Yes, I'll rent to you, just send back the signed application and lease with a check" then there could be a binding contract since the Texas statute of frauds requires that leases must be in writing if "longer than 1 year." A one year or less agreement need not be in writing.

BUSINESS AND COMMERCE CODE CHAPTER 26. STATUTE OF FRAUDS (texas.gov)

 

[quincy]

If the prospective tenant sent a check and a signed application and lease and the homeowner did not sign then there was no acceptance of the offer by the homeowner and therefore no contract.

If the homeowner signed a lease form and then sent it to the prospective tenant and then the tenant signed it and returned it with a check and application then there is a contract.

In anticipation of Quincy finding an exception to my comment, I'll provide one here.

If the homeowner or the homeowner's agent said something to the effect of "Yes, I'll rent to you, just send back the signed application and lease with a check" then there could be a binding contract since the Texas statute of frauds requires that leases must be in writing if "longer than 1 year." A one year or less agreement need not be in writing.

BUSINESS AND COMMERCE CODE CHAPTER 26. STATUTE OF FRAUDS (texas.gov)

You found the exception.

If the lease comes directly from the landlord/property owner, the tenancy has already been approved by the landlord/property owner. It’s their lease so they approve it as written.

 

[adjusterjack]

You found the exception.

You made me laugh.

If the lease comes directly from the landlord/property owner, the tenancy has already been approved by the landlord/property owner. It’s their lease so they approve it as written.

However, sending an application along with the lease may imply that the prospective tenant has not yet been approved.

A landlord, a prospective tenant, and two realtors in between is a recipe for a monumental FUBAR.

 

[quincy]

The application apparently was sent first and the property owners were “ready to proceed.” The lease was then sent and returned with a $3000 deposit.

It sounds to me like the tenancy was approved.

It is possible that the $3000 included an application fee, the fees of which are typically non refundable, but the rest of the deposit should be refunded to the tenants if the property owners decide not to rent to these tenants.

Depending on the reason(s) for not honoring the lease acceptance, the property owners potentially could be sued not only if the check/money is not refunded but also sued for something else (discrimination?) as well. There are not enough facts presented here to say.

 

[tenant2021]

Some more info.....

The lease would of been for 24 months.

They did send in an application first. The homeowner did not sign anything but verbally communicated they were approved and ready to move forward.

The lease was first sent to the prospective tenant to sign (I always have the homeowner sign last).

The other realtor indicated to me the lease was signed several times when it was not. I made screenshots every time this happened. She would go 18 hours without responding to me. After several days with no signed lease and very little communication about what was going on, the homeowners elected to go with a different applicant.

The money sent to broker in form of check was $3000 (never cashed). The prospective tenants realtor sent this. They were going to have to pay $8800 total before move in.

 

[quincy]

Some more info.....

The lease would of been for 24 months.

They did send in an application first. The homeowner did not sign anything but verbally communicated they were approved and ready to move forward.

The lease was first sent to the prospective tenant to sign (I always have the homeowner sign last).

The other realtor indicated to me the lease was signed several times when it was not. I made screenshots every time this happened. She would go 18 hours without responding to me. After several days with no signed lease and very little communication about what was going on, the homeowners elected to go with a different applicant.

The money sent to broker in form of check was $3000 (never cashed). The prospective tenants realtor sent this. They were going to have to pay $8800 total before move in.

The previous lease should have been formally withdrawn before signing a lease with another tenant.

 

[adjusterjack]

The application apparently was sent first and the property owners were “ready to proceed.” The lease was then sent and returned with a $3000 deposit.

It sounds to me like the tenancy was approved.

Agree, if that was the case.

The lease would of been for 24 months.

They did send in an application first. The homeowner did not sign anything but verbally communicated they were approved and ready to move forward.

From the statute I posted earlier:

Sec. 26.01. PROMISE OR AGREEMENT MUST BE IN WRITING. (a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is
(1) in writing; and
(2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.
(b) Subsection (a) of this section applies to:
(5) a lease of real estate for a term longer than one year;

There is no enforceable contract without the signature of the homeowner.

The previous lease should have been formally withdrawn before signing a lease with another tenant.

As a courtesy or CYA perhaps but not a statutory requirement as there was no enforceable lease without the signature of the homeowner.

 

[quincy]

I think the tenants have a better case against the property owner than the property owner has against the tenant.

The tenants had a right to believe that the rental was theirs. It is common for property owners not to sign the lease until after the signing by the tenants and receipt of the deposit.

The commitment to rent to the tenants comes when the property owner sends the lease.

A landlord/tenant attorney could review the matter but I do not see that the property owner has any right to keep the deposit.

 

[adjusterjack]

I think the tenants have a better case against the property owner than the property owner has against the tenant.
The tenants had a right to believe that the rental was theirs. It is common for property owners not to sign the lease until after the signing by the tenants and receipt of the deposit.
The commitment to rent to the tenants comes when the property owner sends the lease.

Not according to statute.

I do not see that the property owner has any right to keep the deposit.

I agree.

Though OP has made no such suggestion.

The check hasn't been cashed. OP can just send it whence it came, game over.

 

[quincy]

tenant2021 should at the very least send back the (uncashed) deposit. That might stop a lawsuit.

 

[lawdude888]

Thanks for all the advice. You guys are awesome.

Last night, I immediately sent an email to the other realtor with details of my brokers contact info. I also explained the situation to my broker and told them to send it back.

I use an online broker for 100 percent commission and low fees. The trade off is they are located in a different city (5 hours away by car) and are slow to respond. It may be 2 weeks before they get the check back.

 

[adjusterjack]

A landlord, a prospective tenant, and three realtors in between them is a recipe for a monumental double FUBAR with a SNAFU thrown in for good measure.