When does a lease become binding? Before or after moving in?

Question

Hello,

I signed a lease with a tenant and they paid the deposit but no rent. They are supposed to come back in a week with the rest of the money and I will give them a key at that time.

After signing the lease a neighbor let me know they moved out of another house on the street several years ago and left the house full of garbage, and broken appliances. (It sounds like a typical tenant, lol)

Can I break the lease now since they have not yet paid the first months rent? Lease does not start for another week and they do not have access to the property, so I do not know if it is binding yet.

I have not decided what I am going to do yet, but if the lease is fully binding already my decision would be made.

Thanks in advance!

Jerry W. · Answer

@Toben B.  A lease can become binding when it is signed or it could be contingent upon a future event.  You need to read the terms of the lease very carefully it should specify.  If the lease does not specify then the courts would look to parole evidence (statements of the parties) to determine what their intent was.  They only look at parole evidence if they cannot discern the intent from the lease.  If the lease is ambiguous then then the ambiguity is held against the drafter which is normally the landlord.( Not many tenants write their own lease).  You cannot get a firm answer on when the lease becomes binding without a careful reading of the lease itself.

Usha Angou · Answer

When the Lease Contract is signed by both parties, it gets bound. But how could you sign when they have not done what they are supposed to? what if they say they had already paid the 1 month rent as well by CASH?

So lesson Learnt, it is always better to stick to the Contract word on word.

Stephen Masek · Answer

I've heard several people who do their own management, and several mangers say it is wise to visit where they live, unannounced, to see what your place will be like after you rent it to them.

Patrick L. · Answer

Like Jon said, I'd never give the tenant a signed lease until I have the full move in amount.  I'll take the security deposit as a non-refundable deposit to hold the property and once the full move in amount is paid I'd execute a lease and give them the keys.  That may be a better policy for you going forward.

Once you both have signed the lease and money has changed hands it's probably a valid contract at that point so if you rented to a bad tenant then you may have an issue going forward.  The biggest thing is to stay on top of it and watch the condition of the property and act in advance rather than letting things get too bad.  Did you properly screen this tenant?

Jon Holdman · Answer

Can't answer your question, sorry.  But I only sign a lease when the tenant can hand over one full months rent and the full security deposit, in cash or money order.  We sign the lease.  They hand me the money.  I hand them the keys.  Avoids situations like this.

Bill Gulley · Answer

The lease is valid when signed and consideration is paid, looks like you need to step up from poor due diligence if the perform as agreed.

How trustworthy is that source of information, could they just be shooting their mouth off, trash talk for another reason? What did that landlord say?

If it's true, watch them closely, hold them responsible for clean up and remind them tactfully that stuff won't fly with you, an education process.

If they fail to pay the full rent when due, return the deposit and terminate the agreement and don't give possession (the keys) until rents are paid. :)

Bryan H. · Answer

A contract is binding when it is signed by both parties.

When does a lease become binding? Before or after moving in?

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