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Property FAQ’s
Letter of Offer
The Letter of Offer is drawn up to indicate the tenant’s initial offer upon a property, at this point
themain termsof the leaseareoutlined fromthemoregeneral commercial terms through to the
agreed pre-move in decoration requests.Once both parties agree to the terms of the Letter of
Offer,theyare requiredtosign thedocumentand the tenantwill release to the landlordaholding
deposit equal to one month’s rent as a sign of his good intent to take up a lease agreement on
theseconditions.The landlordwilldrawuphisTenancyAgreement formbasedon the termsof
theLetterofOffer.
WARNING
Ensure that the Letter of Offer has the words “Subject to Offer” clearly stated at the top of the
offer.Without this being included, should the negotiations fail and the formal Tenancy Agreement
not be signed, the Letter of Offer could be argued to be a “binding offer letter” and effectively
formacontractualobligationontheparties inabsenceofaformallease.
Holding Deposit
Whenyouhavefoundaflatyouwanttomakeanofferon,youragentwillpreparea“letterofoffer”
outlining the basic leasing terms between you and the landlord. This letter is simply an offer made
subjecttocontract,andistypicallynotbindingonanyone.Uponthelandlord’sacceptanceofthe
offer,a holding deposit equivalent to one month’s rent is normally required. This deposit is used to
reserve the apartment, and subsequently becomes the first month’s rent payment upon the signing
of the tenancy agreement. A holding deposit, in most cases, is refundable in full should either party
for any reason decide not to go ahead with the signing of the formal tenancy agreement.
In some cases,a “binding offer” is signed.This allows the landlord to keep the holding deposit
should the tenant decide not to proceed with the leasing of the premises. All contracts pertaining
to the lease of the property needs to be approved and agreed prior to releasing deposits.
Tenancy Agreement
ThecommencementdateofaTenancyAgreement typically isexpectedwithin two tosixweeks
after the Letter of Offer has been submitted. If the property is in ‘move in condition’ the landlord is
likely to requestanearlier start date.Clearly,anyadditional lead time the landlordwill inevitably
factorthisintothe rental somehow,sobeingactive in themarketlongbeforeyouexpected lease
commencement may not prove advantageous to the lease negotiation.
Typically, the landlord will table the form for the TenancyAgreement, but it is ultimately the
tenant’sresponsibilitytoreviewtheTenancyAgreementpriortosigning.Boththetenantand
landlord must be satisfied with the terms of agreement before signing; the tenancy agreement is
legally binding. The Tenancy Agreement engrossments are prepared in duplicate and a third
person must witness the signing.
Disclaimer
Information contained herein is intended
solely to provide a broad description of
the general property letting process. This
information should not be relied upon or
consideredasasubstitutefortheadviceof
a solicitor.