Ask Lucas 020: Does the 3-Day Right of Rescission Apply to Rental Contracts?
Summary: Jill from Key West, Florida was promised an apartment but it was rented to someone else instead. She’s wondering if the landlord has the right to cancel the agreement with the other tenant within three days, and then sign a lease with her. Full Transcript: Lucas: Hey everyone! Welcome to the 20th episode of AskLucas. That’s right the big 2-O. Today we’re talking about the 3-day right of rescission to cancel a lease. I’m Lucas Hall from Landlordology and Cozy and this is a bite sized Q&A show where I answer your questions about landlording and property management. The way this works is very simple. If you have a question just leave a recorded message on asklucas.com and I’ll answer it in this podcast. That’s big news because we actually bought the domain asklucas.com to make it a whole lot easier to remember. So, today’s question comes from Jill, but first let me tell you a little bit about Cozy. If you’re like me you’ve struggled to find software that works well for your rental business. If you manage your own properties there’s no better system than Cozy. I think it’s truly the best way for landlord’s to manage their own properties from application to move-out. With Cozy you can collect rent online, accept online rental applications, screen you tenants and order easy to understand credit reports. It’s simple and the best part is it’s completely free. No other company let’s you process online rent collection and screen your tenants for free. So check it out. Get Cozy at Cozy.co. Now I would like to introduce you to Jill who comes from Key West Florida. Let’s hear what she has to say. Jill: Hello Lucas. My name is Jill and I’m in Key West, Florida and I’m actually supposed to be a tenant. I made a verbal agreement with the property manager on the phone that yes I will take this property. I will rent it, and I’ll come by tomorrow afternoon to pay my first, last, security whatever was needed. Then the next day I got a text messages saying that somebody else showed up and they rented to him on the spot. Is it possible for them to void his lease and let me lease it instead? I think it’s been 3 days. They signed it on Wednesday. I have the money in my pocket. I’ve been totally excited about renting this property and I’m just wondering if there’s like an exit way for the landlord or property manage to void the lease with the other guy so I can rent it? Thank you so much. Lucas: Hey Jill. I want to give you a huge welcome because technically you were the first tenant that we’ve taken a question from on the show. It’s not that we haven’t had others call in, but it’s just that your question is so pertinent to the landlord/tenant relationship that I thought it warranted bringing up on the show. Thanks again for asking it. Let’s get into this. Generally speaking when someone mentions a 3-day rule where you can cancel a contract they’re usually referring to the 3-day right of rescission which is a common law found in most state statues. However, what that generally means is that the receiver of the goods or the receiver of the contract such as the tenant or the buyer of goods or services they usually have 3 days to change their mind. After they sign that contract they can get out of it within 3 days if they provide written proof or some sort of written explanation that they are terminating the contract. However, that’s a big fat however, it usually only applies to really aggressive industries and things like gym memberships or time shares or vacation clubs or other kinds of good and services that might come to your house. Like window installation sales companies or siding companies or asphalt refinishing companies or pool refinishing companies, anybody that wants to sell you on something that’s multiple thousands of dollars and comes into you home and tells you how bad your windows are and then sells you on a twenty thousand dollar window package. Anyway, this rule, this 3-day right of rescission is generally supposed to protect consumers who bought something who maybe didn’t necessarily go out looking for it. That’s why timeshares are such a big deal because this applies because you typically go in for some sort of bonus like a free plane ticket to anywhere in the world and then you get sold on a twenty thousand dollar timeshare. Anyway, it’s there to protect the consumer. I’ve never heard and I’m not a lawyer, so take this with a grain of salt. I’m not a lawyer and this is not legal advice. I’ve never heard of that actually applying to a standard landlord/tenant lease. Generally speaking because they are usually longer term contracts or even if they are month to month it’s not like you were suckered into it. A tenant usually goes out looking for that. Since you’re in Florida, I actually went and found a brochure published by the Florida Bar Association, floridabar.org, and it’s a little brochure they have on legal and binding contracts. There is actually a paragraph in there that describes, contrary to what many believe there is no automatic right of cancel to a valid contract even if done within 3 days. Only certain types of contract come with a 3-day right of rescission such as health club contracts or some sales of goods or services made out of your home, which is exactly what I was just saying. It goes on to say, in order to cancel such a contract you must give written notice of cancellation to a seller within 3 business days of signing your contract. A lawyer would be able to tell you if a particular contract comes with such a right to cancel. Basically, they are saying it doesn’t exist unless it’s some sort of aggressive contracting scheme, and even then you need to talk to a lawyer. So that’s the gist for Florida. Now as it pertains to your particular situation, I’m really sorry you missed out on that apartment. It sounds like you were getting really excited about it, and I feel for you because I’ve actually been in that situation where I went to sign a couple contracts and they’d signed it a few hours before. The basic gist of it is that money talks. Money and action talk. When you want something you have to go after it. For a landlord, I can speak as a landlord. I’ve been a landlord for about 10 years and handled hundreds of tenants. Every time I have a new opening or a new vacancy I usually get one or two people who fully commit. They say, oh I’m coming by tomorrow and I’m gonna drop off my first month’s rent, and then I never see them again. They never show up. I can’t get ahold of them on the phone, and they basically just drop off the face of the earth and it’s because they are shopping around and they find 4 or 5 other places they like. They’re trying to decide and they try to hold all of them because they don’t know what they want. They finally pick one and they never talk to the other apartments again. This is a classic scenario of where a bird in the hand is better than two in the bush from a landlord’s perspective. He may have three other people who actually committed to it and said, I’ll take it. I’ll come by tomorrow, but there was one guy who actually showed up and said I’ve got the money right here and I’m wiling to sign a lease right now, so he took it. I think my advice generally speaking to anyone who’s looking for an apartment is if you find one that you like don’t wait. Drive over there right then and there or if they are about to close, you know the leasing office has hours let’s say, be the first one in the door the next morning. Be waiting there while they’re going to open the office, and say I’m here. Here’s my money. Though I think that the leasing agent should have maybe given you a change to remedy the situation and come by because he promised it to you verbally. That verbal commitment wasn’t really a legally binding contract because there wasn’t a signed lease and there wasn’t any money involved yet. Maybe the best case scenario and at least what I would have done is I would have called you and I would have said, hey listen I’ve got someone here and who’s interested in the one I promised you. If you can get here in 15 minutes to sign this lease then I’ll give it to you, but if not I’ve to go with the guy who’s willing to commit. With that said, as far as I know there is nothing that you can do to force the landlord to terminate that contract and then choose you as a tenant. It just doesn’t work that way. That’s the whole point of why the landlord signs that contract with the tenant to solidify that agreement, and as long as the tenant has paid all the money that he or she is supposed to and that lease is signed then they are stuck with each other. Now, both the landlord and the tenant could mutually terminate the agreement together if it’s a decision they make and they are both in agreement about it, but one of them can’t force it on the other. That’s the point of signing a lease. You could go to the landlord and say, hey listen I’m so sorry I missed this if that person backs out just know that I will be waiting with a pile of cash to give you so give me a call if that happens, but otherwise just let me know if you have another unit available. I hope that this helps. I’m sorry that you missed out on that apartment and I hope that you find another one hat you like a lot. Next time you find one make sure that you even give a holding deposit when you first see the apartment. As soon as you know that you want it put some money where your mouth is and say this is mine. I claim it. I call dibs on this apar