What happens if a tenant signs a fixed term tenancy agreement and then doesn’t move in? This DOI looks at the legal authorities that underpin enforceable tenancy agreements and what a tenant’s liability can be when they decide to change their mind.
Case Background:
The parties signed a tenancy agreement for a fixed term from January 17, 2022, to December 22, 2022. The tenants did not move in and did not pay any rent or bond. The landlord made an application for rent arrears up until a new tenancy could commence.
Legal Authorities:
Section 13 RTA: Provides that every tenancy agreement should be in writing.
Section 13C RTA: Outlines, however, that tenancy agreements are not unenforceable on the grounds that they are not in writing
Contract Law: A contract is an agreement between parties involving a promise in exchange for valuable consideration. It requires an offer, acceptance and consideration (promise or payment) For enforceability, the parties must intend to be legally bound, and essential terms like parties, price, and subject matter must be reasonably certain.
Analysis:
The Tribunal found that the tenancy agreement was binding on the parties as all elements of a binding contract were present: the essential terms were agreed upon, valuable consideration or a promise to pay was made by the tenants when signing the agreement, and both parties intended to create a tenancy.
So, what was the outcome? And what are they key learning points?
