Real Estate Leases

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Real Estate Leases: Tenants Perspective

Understanding written leases and written rental agreements.

When a landlord and a tenant enter into a month-to-month agreement, that agreement can be either verbal or written. Verbal monthly agreements are a very bad idea for everyone.

A landlord can promise a tenant the moon, but if it is not in writing, it will be very difficult to get those promises enforced. A tenant can promise to take care of the yard in return for a lower monthly rental payment, but if it is not in writing, there is no way to prove the agreement. Moreover, people may have different perceptions about what was agreed to. Memories fade over time. There are simply too many areas for disagreement when an oral contract is entered into. So, it is an altogether better idea to get any rental arrangement in writing.

When a month-to-month arrangement is memorialized in writing, it is called a rental agreement. When a fixed-term agreement is memorialized in writing, it is called a lease. (Thus, a lease really has two meanings: it is both the term for the type of agreement the landlord and tenant have and also the name of that agreement.)

A written rental agreement looks very much like a written lease. Both state who the parties to the agreement are and where the unit is located, and list the amount of rent. Both likely contain many boilerplate legal provisions that tend to favor the landlord. Not knowing the difference however, can have severe ramifications.

Upon graduation from college, Bill found an apartment that he loved for $1,000 a month and signed what he thought was a month-to-month rental agreement. When he was let go from his new job two months later, he gave thirty days’ notice and intended to move home with his parents for a while. His landlord informed him that he had signed a lease and was responsible for the entire year of rent. Bill ignored him. Bill’s landlord sued Bill for $10,000 ($1,000 x 10 months) and won.

While many such written rental contracts indicate clearly whether it is a yearly lease or a monthly rental agreement, some do not. A landlord has no problem distinguishing a lease from a rental agreement; he or she uses them all the time. How can a tenant tell them apart? The important thing to look for is a provision that allows the agreement to be terminated, or rent to be raised, on thirty days’ notice. Such a clause means that the agreement is a month-to-month tenancy and not a fixed-term lease.

Neither leases nor rental agreements can legally include provisions that attempt to circumvent rental laws. Tenants have the right to habitable dwellings, to privacy, to use the place in quiet enjoyment, to minimum-notice requirements if they are being sued, and to a speedy return of deposits. Any agreement containing clauses that attempt to force tenants to waive (forgo) these rights is flatly illegal and unenforceable.

Either agreement can be intimidating; they are seemingly written in stone. But the truth is that they are changed all the time. Any written rental arrangement, be it a lease or a rental agreement, is a contract. Like any contract, both sides must agree to it. If a landlord wants to add an extra provision and both sides agree, then that provision can be added. If a tenant wants to delete a questionable clause and the landlord agrees, then it can be crossed out, and the change initialed and dated. Neither tenant nor landlord should ever sign an agreement that he does not agree with. That is why it is called an agreement.

Tenants especially may think that changing a lease or a rental agreement offered by a prospective landlord is practically impossible, but it is not usually as difficult as they may think. Landlords are in the business of renting their property. Unrented property is lost money. By the time a tenant is reading and ready to sign a rental agreement, his potential landlord has already concluded that he is the best available prospect. The landlord wants to rent to this tenant. Believe it or not, that tenant is in the power position.

Norman wanted Robyn to move into his vacant unit. Robyn was interested, but really wanted to bring her cat along, and Norman normally did not allow animals in the apartment. Robyn knew that the space had been empty for a while, and she also knew that her previous landlord would give her a great referral. She insisted that she be allowed to bring her cat. Since Norman really wanted Robyn as a tenant, he agreed to the cat, changed the lease, and had Robyn put down an extra $200 cleaning deposit.

The Important Legal Concept to Remember: Rental agreements vary greatly. Landlords should usually try to get their tenants to enter into written rental agreements, and tenants should almost always try to get a lease.

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