Early Vacant Possession advisable? TPC – Rules Q3


What if the tenancy agreement is in the future date? Can I let the tenant in first? How about my fee as agent who completed the instruction?


In a case where the landlord agrees to rent to the tenant in a future date, tenancy agreement is signed without any performance as yet.

For example, landlord agrees to let his shoplot starting 1st January, 2019 (current date 18 Apr, 2018), and the tenant pays and signed the offer to rent. This offer is later accepted and signed by landlord within the month of May, 2018. The contract is formed, but the time is yet to come. There is not yet any performance of the contract. As the tenant is only legitimately a legal tenant from 1st Jan, 2019, he is not yet a tenant now. Thus, letting him into the premise is not wise.

This means early vacant possession is not recommended. Any damage outside the tenancy period is outside the agreement. Particularly, if damage is irreversible and thereafter, landlord sue for compensation. It can become a tort case, where tenant is accused of trespass. It can become criminal in nature if someone got injured or there is a fight inside.

As for fee payment as an agent, the instruction is completed as and when the tenancy contract is formed. When both parties affix their signature to this contract and money being paid to the rightful party (landlord), the contract is formed. Thus, payment of commission is due when all the conditions of a contract becomes unconditional.

This is similar in the case of purchasing a property. Agency fee is due when the contract become unconditional, ie when all the terms are accepted and sale & purchase agreement is signed. Where the house is not yet constructed ("undercon") in itself is not a condition that the sales is not concluded.

Standard 4 of MEAS 2014

4.2.3 If the sale and purchase agreement or letting or leasing agreement is unconditional, the estate agency fee is due upon the signing of the sale and purchase agreement or letting or leasing agreement.

4.2.4 When the sale and purchase agreement or letting agreement or leasing is conditional, the estate agency fee is due when the last of the conditions are met i.e. when the agreement becomes unconditional.