House Lawyer: Tenants should sign your lease first

July 26, 2013

This week, Jacobs answers a reader’s question from his mailbag.

My husband and I own a two-bedroom condo in Washington. We previously lived in it, but we moved out of town for job reasons a few years ago. We rent it out because we have been unable to sell it for as much as our mortgage, and for security reasons we do not want to do a short sale. We advertised the apartment for rent on Craigslist and received many inquiries, but the first inquiry, from two young roommates, seemed quite serious. We communicated via e-mail and agreed to prepare and send them a written lease.

My husband prepared a lease, and we both foolishly signed it and sent it via overnight mail to these roommates. That was almost three weeks ago, and we have not heard from them since. They have not replied to our e-mails, nor have they returned the signed lease.

We know these roommates are both recent law school graduates, so we don’t want to get into legal trouble, but we also can’t wait indefinitely to get the signed lease back. We have many other qualified people making inquiries who want to sign the lease immediately and begin to rent our condo. What can we do?

Your offer to lease was just that: an offer. Until that offer is accepted and the acceptance is delivered back to you in the same manner as the offer, you have no binding contract with the recent law school grads.

If you really want to lease to someone else, you need to immediately notify the recent law grads in writing that you are withdrawing your offer to rent them the condo. That withdrawal should also be e-mailed to them and sent via overnight mail to the same address, and in the same manner, that you sent your original offer to lease.

Once your withdrawal has been communicated to them (prior to their acceptance), they can no longer accept your offer. Once your offer has been withdrawn, it is then safe to lease the condo to someone else.

As you probably now realize, it is never a good idea to sign a lease before your proposed tenants sign. In effect, sending them your unsigned lease form is a courtesy, and when they sign it and send it back, they are making the offer to rent. You can then accept, reject or modify it.

Harvey S. Jacobs is a real estate lawyer in the Rockville office of Joseph, Greenwald & Laake. He is an active real estate investor, developer, landlord, settlement attorney and lender. This column is not legal advice and should not be acted upon without obtaining legal counsel. Jacobs can be reached at (240) 399-7900 or ask@thehouselawyer.com.

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