Letter of intent

[brian_singapore]

Hi,

A fellow I work with has signed a letter of intent without fully reading it in detail. It contains the following clause:

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Good Faith Deposit:

Enclosed please find the amount of $2900 being payment in good faith deposit. This will form part of the security deposit if a Tenancy Agreement is entered into between the landlord and tenant. The balance of the deposit (if any) and rent will be paid upon Execution of the Tenancy Agreement.

In the event this offer is accepted by the Landlord and the Tenant fails to execute the Tenancy Agreement by 10/4/2018 the good faith deposit submitted shall be forfeit to the Landlord and thereafter, neither party shall have any claim against each the other.

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I presume this is legally binding and if he isn't happy with the lease or has issue with the unit, then he will loose his deposit. Pretty sure I know the answer is Yes, but wanted to double check. I don't have copies of the LOIs that I signed in the past, but I don't remember anything similar to this.

But then, I may not have been paying attention too.....

[Wd40]

Well, if he has issues with the unit or not happy with the lease why would he sign the LOI? Signing the LOI basically forces the landlord to hold the unit for the tenant until the agreement is signed by the specified date. I can't imagine tenant refusing to sign the agreement unless his circumstances change. If they change and he changes his mind on renting the unit, the deposit is gone.

But the key thing is the LL has to bank the cheque. Until he banks the cheque, the LL has every right to rent the unit to someone else. But the moment he banks the cheque, he agrees to give the unit to the tenant.

Sent from my Redmi Note 4 using Tapatalk

[Pal]

Hi,

A fellow I work with has signed a letter of intent without fully reading it in detail. It contains the following clause:

---------------------

Good Faith Deposit:

Enclosed please find the amount of $2900 being payment in good faith deposit. This will form part of the security deposit if a Tenancy Agreement is entered into between the landlord and tenant. The balance of the deposit (if any) and rent will be paid upon Execution of the Tenancy Agreement.

In the event this offer is accepted by the Landlord and the Tenant fails to execute the Tenancy Agreement by 10/4/2018 the good faith deposit submitted shall be forfeit to the Landlord and thereafter, neither party shall have any claim against each the other.

---------------------

I presume this is legally binding and if he isn't happy with the lease or has issue with the unit, then he will loose his deposit. Pretty sure I know the answer is Yes, but wanted to double check. I don't have copies of the LOIs that I signed in the past, but I don't remember anything similar to this.

But then, I may not have been paying attention too.....

The LOI he signed is missing this "The lease is subjected to mutual agreement on the Tenancy Agreement. In the event that both parties are unable to agree to the terms and conditions of the Tenancy Agreement within 14 days of the date of this Letter Of Intent, the holding deposit tendered herewith will be refunded to the Tenant within 7 days without any interest and thereafter neither party shall have any claim against the other."

[brian_singapore]

Thanks. This clause is missing. The agent is from ERA, is this purely a case of buyer beware or is there any recourse; i.e. bad faith from the agent, or anything similar that can be used as a basis of complaint or to get out of the LOI?

[JustSee]

Thanks. This clause is missing. The agent is from ERA, is this purely a case of buyer beware or is there any recourse; i.e. bad faith from the agent, or anything similar that can be used as a basis of complaint or to get out of the LOI?

Seems this is more a case of bad faith, as what Pal wrote is a very standardized addition to the LOI.
I would ask the agent why there isn't such an addition and might even ask if he/she is trying to hide anything from you.

If you want out of the LOI, guess your friend will have to try and fail the negotiations by not agreeing to some terms in the contract.