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They would need to try and find someone to sublease and bring a ready, willing and able tenant to the landlord, to step into their shoes and take over. I say this because the deposit could be viewed as consideration and if there is a signed lease, it could be valid, with the first months rent due, as stated in the lease. If it is not paid, the burden shifts to the landlord to take action and sue or try and find someone and sue for the time it remains vacant.
I do understand. What way out did they tell you he had?
Yes, that was if the rent was a condition to the lease. For example, if the landlord said that the lease and first months rent need to be returned. If the rent was never paid, you could argue there was no consideration. However, if they signed the lease and gave a deposit, it would be valid with the first months rent do when owed. The other suggestion was possible a clause in the lease, that would allow them to terminate it with a penalty of some type paid but if it is not, you can always have him offer a penalty fee to break it and see if they will accept it.
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