Leases vs Agreements to Lease

September 21, 2017

We have been dealing with a lease matter this week that has illustrated a few things that can go wrong.

There was no actual lease, only an agreement to lease, requiring the tenant to sign a formal lease on request, but no request was ever made.

The Agreement to lease had limited default provisions. The landlord issued a default notice on 2 August, giving fourteen days to rectify, i.e. until 16 August. On 25 August, they sent an e-mail giving two more weeks to rectify the defaults. On 29 August, they sent a termination notice, effective 9 September. On 30 August, they sent another termination notice, this one was effective on 2 September. They changed the locks on 1 September.

The tenant now wishes to move back in and their lawyer is threatening legal action due to the debacle!

Having said all that, we later found out that the landlord actually took possession of the premises on 25 August before the e-mail was sent giving a further two weeks to rectify, which had the effect of terminating the lease. Thus, the landlord might be safe.

To prevent situations like this arising, call Michael Paterson & Associates first!