LEASE CANCELLATION BY THE RESIDENT

 

Given the huge amount of information that we are bombarded with, it’s amazing that we can keep as many things factually correct as we do. It’s not surprising that the three-day lease cancellation myth has become established in so many residents’ minds. While Florida law does not provide a cancellation period, the careless manager may provide the applicant with the ability to cancel the lease by failing to deliver the lease.

 

Rescission is the Correct Term

 

Technically, the legal term is “rescission”. A rescission is the unmaking of a contract. There is no contract. It is a nullity. A cancellation is the abandonment or repeal of a contract. Since the common usage is “cancellation”, I will use it in this article.

 

No Three-Day Cancellation Period

 

There is no three-day cancellation period for residential leases in Florida. It doesn’t matter whether the lease is for only one month’s duration or for a period of years, or for any term in between. It doesn’t matter what the monthly rent is or how it is payable. It doesn’t matter if it’s a single-family home, a duplex, a condominium or an apartment. It doesn’t matter if the property is in the city or outside city limits. It doesn’t matter. It can’t be cancelled within three days. Although there is no right to cancel residential leases, there is a right of cancellation that applies to certain other types of contracts, for example door to door sales or home equity mortgages. This is what probably led to its mistaken application to leases.

 

Giving the Resident a Copy of the Lease

 

We recommend personally giving a copy of the completely executed lease to the resident as soon as the manager or his agent signs the lease. This prevents any dispute as to whether the resident knows that there is a binding lease in effect. If the manager cannot give the lease to the resident personally, then other possible methods are an email attachment with a delivery receipt, fax with a delivery confirmation or a certified letter to track the receipt.

 

Bad Manager Practices

 

It is an all too common manager practice to hold the resident’s copy of the lease until move-in. A manager does this at her own risk. Another frequent manager excuse is that a copy of the lease was available for the resident to pick up or that the resident didn’t keep his appointment to pick up the copy. Judges are unimpressed with these excuses. That being said, a resident cannot intentionally frustrate delivery of the lease by such actions as refusing certified mail.

 

Partial Performance

 

If the manager has forgotten to give the resident a copy of the lease, but the manager and resident are performing under the lease, can the resident cancel? The resident’s performance may include, for example, accepting the keys, obtaining utilities in his name, moving in some personal items, or actually occupying the premises. The manager’s performance may include complying with the resident’s preparation requests (using paint of a requested color, installing new appliances, etc.) or actually giving possession. Resident cancellations after partial performance by either the resident or manager are legally problematic. Partial performance of a lease may make the lease binding. The more extensive the performance by the resident or the manager in reliance upon the lease, the less available the right of cancellation is to either the manager or the resident. The manager should consult her attorney for advice in such situations. (Note that partial performance applies to an unsigned lease also, but with significant differences not discussed here.)

 

I caution that it is dangerous to rely on partial performance, as it may not save the manager’s entire lease. A manager may be found entitled to only her out-of-pocket expenses as damages. "Out-of-pocket” expenses are her actual cash outlays, such as the costs to turn the apartment again, to re-advertise it, etc., as opposed to her "statutory or contract damages", such as rent to relet under Florida statutes or liquidated damages under an early termination addendum.

 

So much work is involved in guiding an applicant through the rental process to the signing of the lease; it is a shame to see it fail at the finish line. The final important step is the delivery of a copy of the completely executed lease.