Aparment Agent / Broker Issues

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kman
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Aparment Agent / Broker Issues

Post by kman » Wed, 02 Jun 2010 1:59 am

So, I found an apartment to rent and signed an LOI. The landlord signed and accepted the LOI. There was no payment/deposit exchanged. I am now re-thinking leasing the apartment. Both brokers involved are acting funny and pushing me to lease it, threatening with legal action saying the LOI is a binding agreement and I am liable for one month rental if I do not sign the tenancy agreement.

Is this true ? I have not provided any payment or deposit to secure the apartment and told my broker to hold off on it, however, in his eagerness to make his brokerage, he went ahead and got it signed by the landlord.

What can I do to protect myself ?

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Mad Scientist
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Re: Aparment Agent / Broker Issues

Post by Mad Scientist » Wed, 02 Jun 2010 9:18 am

kman wrote:So, I found an apartment to rent and signed an LOI. The landlord signed and accepted the LOI. There was no payment/deposit exchanged. I am now re-thinking leasing the apartment. Both brokers involved are acting funny and pushing me to lease it, threatening with legal action saying the LOI is a binding agreement and I am liable for one month rental if I do not sign the tenancy agreement.

Is this true ? I have not provided any payment or deposit to secure the apartment and told my broker to hold off on it, however, in his eagerness to make his brokerage, he went ahead and got it signed by the landlord.

What can I do to protect myself ?
My 2 cents; all agent are registered with http://www.redas.com/ , you can try with them to look for answer
IMHO; if you have not pay any deposit i.e the LOI means nothing. The agents cannot forced nor are you liable for any payment if you do not sign anything on the dotted line.It is his fault not yours. If I were you , I will tell him up yours !#@!%# !!!!!!':x'
Case has this cooling off period between seller and buyer whereby you are entitled to back off if something that is not right.
Do not worry with those cowboys, they should be shot and hang out in the open to dry . You should become the aggressor instead and warned him that you would report him to the proper authorities
:cool:
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Post by x9200 » Wed, 02 Jun 2010 10:46 am

MS, he has signed it. This is a legal agreement and deposit is only meant to provide a quick solution for not really ethical tenants to be like this one (or so it appears). Still they can take this to the court and get some compensation. One month of rental seems to be a fair one. My 3 cents :cool:

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Post by Saint » Wed, 02 Jun 2010 12:05 pm

A LOI is only a letter proposing your intention to lease and your requirements to the landlord and no contract becomes in force until the TA is signed which normally has to be completed within 7 days of the LOI.

Quite often a good faith deposit is given to the LL at the time of LOI which the LL can keep if tenant doesn't sign agreed TA. As you haven't handed over any monies yet you can just walk away.

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Post by Saint » Wed, 02 Jun 2010 12:09 pm

x9200 wrote:MS, he has signed it. This is a legal agreement and deposit is only meant to provide a quick solution for not really ethical tenants to be like this one (or so it appears). Still they can take this to the court and get some compensation. One month of rental seems to be a fair one. My 3 cents :cool:
I viewed a property a couple of years ago where the agent blatantly waved not 1 but 2 signed LOI and good faith deposits in front of me saying that if I want this property just make a better offer and it's mine. I politely told him where to shove his LOI and walked away!

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Post by x9200 » Wed, 02 Jun 2010 12:44 pm

Saint wrote:
x9200 wrote:MS, he has signed it. This is a legal agreement and deposit is only meant to provide a quick solution for not really ethical tenants to be like this one (or so it appears). Still they can take this to the court and get some compensation. One month of rental seems to be a fair one. My 3 cents :cool:
I viewed a property a couple of years ago where the agent blatantly waved not 1 but 2 signed LOI and good faith deposits in front of me saying that if I want this property just make a better offer and it's mine. I politely told him where to shove his LOI and walked away!
Oke. If this has completely no legal importance as you suggest what sense does it make? You can communicate all your intention and requirements on a piece of unsigned toilet paper and this would be exactly worth the same. IMHO LOI is valid within all the points it covers and yes, TA is still required to rent the property but unless re-agreed with both parties it has to stick to the points expressed in the LOI.

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Post by Mad Scientist » Wed, 02 Jun 2010 1:45 pm

x9200 wrote:MS, he has signed it. This is a legal agreement and deposit is only meant to provide a quick solution for not really ethical tenants to be like this one (or so it appears). Still they can take this to the court and get some compensation. One month of rental seems to be a fair one. My 3 cents :cool:
X my 4 cents'; I am in electronic business i.e manufacturing , if the customer signed an LOI is just an intention to manufacture products and the process begin with discussion , R& D the whole works but if the customer did not signed the MOU and Contract Agreement, we as the manufacturer cannot hold the customer to anything because it is just an LOI although time, money has been wasted. It is jsut part of doing business. that is all
I take an example of one mfg company walking out of an LOI recently after much done. The manufacturer seek compensation in court. End up getting only cost of parts and labour that is all.
LOI means nothing unless TA is signed. The cost of litigation to recover "breach of LOI" is more than one month rental hence it is not worth it
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Post by Saint » Wed, 02 Jun 2010 1:57 pm

Mad Scientist wrote:
x9200 wrote:MS, he has signed it. This is a legal agreement and deposit is only meant to provide a quick solution for not really ethical tenants to be like this one (or so it appears). Still they can take this to the court and get some compensation. One month of rental seems to be a fair one. My 3 cents :cool:
X my 4 cents'; I am in electronic business i.e manufacturing , if the customer signed an LOI is just an intention to manufacture products and the process begin with discussion , R& D the whole works but if the customer did not signed the MOU and Contract Agreement, we as the manufacturer cannot hold the customer to anything because it is just an LOI although time, money has been wasted. It is jsut part of doing business. that is all
I take an example of one mfg company walking out of an LOI recently after much done. The manufacturer seek compensation in court. End up getting only cost of parts and labour that is all.
LOI means nothing unless TA is signed. The cost of litigation to recover "breach of LOI" is more than one month rental hence it is not worth it
Thanks you

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Post by miseb » Wed, 02 Jun 2010 2:07 pm

Just a question - if a LOI is not legally binding then what is the point of having it?

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Post by Saint » Wed, 02 Jun 2010 2:12 pm

miseb wrote:Just a question - if a LOI is not legally binding then what is the point of having it?
To state the requirements, details, clauses etc you want written in to the TA

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Post by x9200 » Wed, 02 Jun 2010 2:18 pm

Ok, I did a bit of a search in a meantime and looks like you are right at least on a general ground but simply still don't get why something like this for the renting purpose is needed for. Once again: it simply does not make any sense esp. if a deposit is involved. Comparing to different business cases may not be that justifiable for a variety of reasons. What would be convincing is a case from the rental area but I guess it will be too much to ask for :)

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Post by kman » Wed, 02 Jun 2010 3:02 pm

Thanks for the replies. As far as I understand, this document is NOT legally binding. I even have a document given to me by my agent of HSR Realty stating that an "LOI is an initial document to put forward the tenant's offer to the landlord. This document is not legally binding. This LOI states your intention to enter into a contract to rent the property and put forward your additional requests to the landlord."

As for being an "unethical" tenant as someone posted, it was never my intention to commit to renting this property. The agent pushed me and so I signed the LOI. If I had known I would be legally liable for anything, I would never have signed. As it turns out, I don't think I am legally liable. I think this just goes to show the over-eagerness of agents to push landlords and tenants into signing documents without properly explaining them, so they (the agents) can make their commission.

I don't know if they will go to court with this. They are threatening to at this point, but I don't think it will be worth pursuing for them. Let's see how it plays out.

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Post by sundaymorningstaple » Wed, 02 Jun 2010 3:22 pm

kman wrote:The agent pushed me and so I signed the LOI.
:-k

I gotta bridge in the middle of the Arizona desert I want to sell you......
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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Post by Saint » Wed, 02 Jun 2010 3:23 pm

sundaymorningstaple wrote:
kman wrote:The agent pushed me and so I signed the LOI.
:-k

I gotta bridge in the middle of the Arizona desert I want to sell you......
And I'll throw in the Sydney Opera House as well!

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Post by Mad Scientist » Wed, 02 Jun 2010 3:50 pm

miseb wrote:Just a question - if a LOI is not legally binding then what is the point of having it?
Good question

This is two fold

1. For the sales person to gauge his sales performance esp commission base

2. To have a common understanding to go forward to close the TA between seller and buyer

However every purchase has a cooling off period even if a TA has been signed
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