The Advantages and Disadvantages of Oral Leases

Like many contracts, leases don’t always have to be in writing. In some cases, landlords and tenants can decide the terms of their agreements orally while still making legally binding terms on both sides. However, there are advantages and disadvantages to entering a lease without a written contract that both the landlord and the tenant must know before deciding which to use. This article provides an overview of those advantages and disadvantages.

Before entering an oral lease agreement, contact a local and experienced landlord-tenant attorney. Every rental landlord, every property, every renter, and every lease are just different enough to warrant review by a professional.

Disadvantages of an Oral Lease

If you don’t have a hard copy to reference, it becomes tough to verify the terms if there are any disagreements or a misunderstanding about the conditions later; perhaps something in the apartment breaks, and each party genuinely believes it’s the other’s responsibility to repair it. Without a written document to review, you may be unable to determine who is responsible for what.

Someone could also attempt to take advantage of the other side by intentionally manipulating or changing the contract since there’s no clear record of the agreements. For example, a tenant who entered a 12-month lease with the landlord but wants to move early could try to say it was a month-to-month agreement. Without anything written down for confirmation, it could be difficult for the landlord to prove it was for one year.

Defending yourself against an eviction can also be much more difficult without a written lease that identifies good causes for eviction. Any end of the lease terms, including the return of the security deposit and other legal rights, can be challenging to establish without a written lease agreement. Relying on a verbal agreement at the outset of the lease looks much different at the end of the lease after all the rent payments have been collected and the landlord wishes to rent to a new tenant.

Issues could also arise if a tenant wants to negotiate some of the original rules and requirements that they’re presented with initially when the parties reach an agreement. In a case like that, a written lease can provide a definite and permanent record of your agreement with your landlord should any issues come up related to those changes.

There may be time limits on your oral lease as well. Generally, a good lease for more than one year could be considered invalid under the Statute of Frauds, a legal concept that can vary slightly from jurisdiction to jurisdiction. Usually, this requires a written record if a rental agreement will extend beyond one year, or else the deal may be deemed unenforceable.

That could mean if a landlord or tenant agrees to a two-year lease, but either wants to break it early, the other may end up with no legal recourse to stop them. They could both even acknowledge that it was supposed to be a two-year lease, but because the contract must be considered void under the Statute of Frauds, the parties can’t be bound by it. Know the laws specific to your area before you agree to an oral lease.

Advantages of an Oral Lease

One of the most significant advantages of an oral agreement is that it can be easily modified and changed and done so on short notice. If it’s a month-to-month lease, the renter could contact the landlord directly over the phone to give 30 days’ notice if they intend to move. The landlord would also be free to call the tenant anytime to end the lease with a 30-day notice. It is easy to do and does not require cause or other common conditions in a written lease.

Written leases tend to contain more provisions, qualifications, and responsibilities than oral leases, which are simpler and easier to understand, with much less to read. This can be especially advantageous if a renter is relatively inexperienced with landlord-tenant law and wants to rent from a more experienced landlord or if either party doesn’t have in-depth knowledge of landlord-tenant law.

Whether you decide to enter an oral or a written lease is often a matter of personal preference for both you and your landlord. However, you should know that an oral lease can leave you vulnerable and is usually open to interpretation under the law. Most landlords prefer a signed, written lease for security, especially if they have multiple rentals and need to keep track of different tenant arrangements.

Benefit From an Experienced Lawyer

So, while oral leases are often enforceable under the law, they may not be desirable. Talk to a local and experienced landlord-tenant lawyer for a review of the situation, for legal advice, and to understand the laws specific to your problem before you decide which way to go.