If someone backs out of lease after verbally committing and putting in their security deposit, can they then legally back out?

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If someone backs out of lease after verbally committing and putting in their security deposit, can they then legally back out?

My 4 roommates and I are planning on leasing a house next year. Our roommate was not able to be at the lease signing and did not physically sign the lease. She did however verbally commit to living with us and gave us her share of the security deposit that we had to provide at the time of the lease signing. The day after we all signed the lease she had decided to back out and live with her boyfriend. We have been unable to find a fifth roommate now. Will it be legally possible to have her still pay her share of the rent even though she did not physically sign the lease?

Asked on April 4, 2012 under Real Estate Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

When someone rents but has not signed a written lease, she is a month-to-month tenant on an oral lease. That means she could terminate tenancy on one month's notice. Generally, that would mean that you could only hold for one month's rent maximum.

You may be able to hold her rent for the whole lease term, however--or at least until you find a replacement roommate (which you must continue to make good faith and reasonable efforts to do)--under the theory of "promissory estoppel." For you to do this, all the following criteria must be met:

1) She must have represented, or promised, to you that she would commit to the lease;

2) She must have done so in order to get you to yourselves sign or commit to the lease;

3) She must have known that you would sign the lease based on her representation that  she would rent;

4) It must have been reasonable under the circumstances for you to rely on her promise; and

5) You must have followed through in reliance on her promise and committed to the rental.

If all of these criteria are met, you may be able to enforce her promise, notwithstanding that she never signed a lease. Of course, if she will not pay voluntarily, you would need to sue her to enforce the promise, so you'll need to weigh if it is worthwhile doing so.


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