Agent Wants Me To Hand Over Keys Before Contract Executed

I have new tenants moving in next week and have used an agent to find tenants and get the contract in place. The contract was issued and signed by both parties weeks ago but the agent will not issue the contract in case something changes, like the start dates changes, myself or the tenant decide not to go ahead or the old tenant doesn’t move out in time. None of this makes sense to me as a contract is a contract, everyone has to abide by it and if there’s a breach on any side there would be penalties to pay. Anyway the previous tenant has moved out and I’m ready for the new people.
The Agent says they won’t issue the contract until the day after I hand over the keys, given the performance of their legal department it could be longer and I won’t receive any rent from the agent until after they have got round to issuing the contract, informed their accounts department who will put my payment in the next payment run, whenever that may be!
I’m not quite so worried about when I’ll get the money.
What does concern me is that I’m being asked to give the keys to a tenant I technically have no contract with. I don’t suspect the new tenants of anything at all but it puts me on a very difficult position contractually, the buildings insurance is also void if I give the keys to someone I don’t have a contract with.
Is this process normal?

There are a number of points of concern here, but you do have a contract with the tenant which should state which day the tenancy is due to begin.

  1. In my view, it is unwise to sign a tenancy agreement so far in advance of the start date and certainly not before the existing tenant has moved out. You could end up in breach of contract.
  2. Giving the tenant the keys before the tenancy is due to start is a mistake and possibly a breach of your insurance. It leaves unresolved the question of when the tenancy actually began and means that any future attempt to evict could be easily defended based on it being the wrong date.
  3. The agencies tardiness with regard to administration and payment would not be acceptable to me.

I would suggest you write a formal complaint to the agent and if you don’t get satisfaction, escalate the complaint to whichever redress scheme they belong to. In the longer term, I would not be using this agent again.

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Lots of red flags here with the agent.

If the contract has been signed by both parties, it’s not up to the agent to “issue” it as it’s already a binding contract, so I’m not sure what the agent means. I’m also not sure why the payment admin from the agent’s side is so lengthy and complex?

Does the agent just mean handing over the keys to the agent for safekeeping only until the contract process is compete and the tenant is moving in? Or are they suggesting they will hand the keys over to the tenant prior to this?

The Agent doesn’t intend to have anything to do with the keys, they expect me to hand the keys over before they issue the contract and before I receive any payment.
I spoke with the agent again today and got the whole “we do over 300 contracts a year this way and nobody has ever even raised this issue” .
The payment I’m not so concerned about as the contract states they have to pay me, if they don’t then they are in breach of contract any that process then kicks in.
Both myself and the new tenant asked that the contract be put in place over a month ago, eventually the agent issued the contract and we all signed it. But the contract is watermarked that it’s just a draft which the agent says they will remove when they issue it after the tenant confirms they have got the keys.
In normal circumstances I would expect it to be a binding contract but the agent is kicking back at every step and refuses to remove the draft watermarking in Docusign.
The existing tenant has already moved out so other than there being a problem with the inventory (very unlikely) of the house becoming uninhabitable in the next 6 days I don’t see that there is a problem, in any case if they couldn’t move in that would be a breach of contract on me, a position I’m willing to accept.
When buying a property you don’t get the keys until the contract has been issued and you have the money, why would renting be any different, particularly when handing the keys to the new tenant would be a breach of my mortgage and invalidate the insurance.
I’ve left it with the agent and I’ve said no contract, no keys. They said something about this being highly irregular.

As I said, its a mistake to sign a contract so early imo.

How was it signed by each of you, wet signature or electronic? If youve both signed then its not a draft. Perhaps you mean theyve only given you a draft so far.

What day are they moving in? Who is doing the check-in on the day? Signing the inventory, checking the smoke alarms, answering questions, handing over the keys etc?

The tenancy begins when they take possession, which could be any time if you give the keys early.

So… if there’s no contract (since it is in draft), plus the agent doesn’t want to handle the keys, then what would stop you or the tenant from backing out at this stage, getting all moneys back less the agent’s costs, and then signing your own tenancy agreement without the agent?! What benefit does the agent have in not issuing everyone the finalised contract at this stage? It’s very odd…

Just FYI Openrent literally have an automated warning message during the Rentnow process that advises the landlord not to hand over the keys until contracts are signed (which is sent out to all parties as soon as everyone has signed digitally) and confirmation that deposit + first month’s rent is paid.

If contracts have been signed, there is a contract in force, even if the agent is the only one with a copy.

Out of interest, how would the landlord make the agent hand over the signed contract? Are there any legal or council routes one could use to figuratively twist the agent’s arm to provide documentation?

@E21keith Have the tenants paid the deposit / first month’s rent yet?

The question is not about how far in advance the contract should be signed. There needs to be a contract in force to abide with both the terms of the insurance and mortgage, so I can’t hand over the keys until its in place and I’ve seen it.

The agent is adamant that the contract isn’t binding until their contracts department have done whatever they do and send me an executed copy. Their contracts department don’t respond to questions so not much help coming from that direction.

So the answer is very simple, I’ll hand over the keys when I’ve got (what the agent confirms in writing) is an executed copy of the contract (not something with a watermark that says Draft all over it), that way I’ll know I’ve got a contract and that way I’ll comply with the conditions of both the insurance and mortgage. I don’t see any other legal method of doing this.