Verbal Lease Agreements Explained
In residential leasing, a verbal agreement is an agreement between a landlord and a tenant without a written document. There is no standard form for verbal lease agreements, nor is there a requirement that a verbal lease be memorialized in writing. Although it is always when both a landlord and tenant sign a lease, when a lease agreement is only verbal the terms of the lease will often depend on the language covered while the tenant was being shown the property before the move in. Typically, this will happen when an apartment goes quickly and a landlord does not have time to have the lease signed; a verbal lease agreement will also arise where a tenant has been living in a residence for an extended period of time (sometimes decades) and a formal agreement has never been created , drafted, or signed. As some examples of common verbal lease terms, a verbal lease agreement may state that the rental period is a month-to-month tenancy or a term of years. The lease may also address the deposit amount, when rent is due, the amount of rent due, and the method in which a tenant must notify the landlord if they plan to renew or desist their lease. Generally speaking, the legal recognition of a verbal lease varies from jurisdiction to jurisdiction. Some jurisdictions may give both verbal and written leases equal weight whether or not a lease is in writing, while other jurisdictions may attempt to deny the enforcement of any oral agreement.
Enforcing Verbal Agreements In Law
When it comes to verbal lease agreements, there’s a common misconception that they hold no legal weight. While the enforceability of a verbal lease may vary from state to state, many jurisdictions still recognize the legal standing of verbal lease agreements.
In California, for instance, the Law Offices of David Piotrowski explains that verbal lease agreements can be enforced. In California, verbal leases for less than a year have the same force and effect as if they were in writing. Therefore, a tenant who has a verbal lease can retain a landlord for renewal of the lease agreement. Similarly, in Ohio, 24 point out that it’s a common myth that oral leases are unenforceable in court. However, verbal real estate leases can be enforced in Ohio courts. In fact, the laws and regulations in many states (like Ohio) demand that landlords provide tenants with proof of the rental price. This ensures that both tenant and landlord have an accurate recollection of the agreement so both parties can fulfill their contractual obligations. These regulations also aid judges who are tasked with resolving disputes between tenants and landlords. An Ohio attorney notes, however, that the burden of proof is placed upon the party who agrees to the terms of a verbal lease. Therefore, the landlord must be able to prove that a lease existed if a tenant attempts to break the lease early. If the tenant is seeking recompense (such as reactionary damages for wrongful eviction) the burden of proof would be on the landlord. While a verbal lease agreement can be enforced in court, proving the agreement is often where the challenges lies. After all, most verbal lease agreements lack any written documentation. Therefore, difficulties arise over proving the particulars of a verbal lease agreement (i.e. who signed the agreement, what the terms of the agreement were, and whether or not the tenant completed his or her contractual obligations). While judges are unlikely to agree to a verbal lease agreement (without supporting evidence for what was discussed between the tenant and landlord), judges can agree that a witness is credible if he or she was present during the discussion of the lease. Alternatively, if a sale was made in "bad faith" or in "conscious disregard" of the law, a judge may also rely upon the previously discussed witness to satisfies other contract requirements. For example, a judge may rely upon the witness if a contract was made in bad faith to ensure that the witness is relieved of any civil liability.
How to Evict Under a Verbal Lease
Despite the absence of a written lease, tenants can be evicted from property under verbal lease agreements through the proper legal channels. In verbal rental agreements, the rights and responsibilities of landlord and tenant are governed by the Rental Housing Act, where no written lease exists, as opposed to the Rental Housing Act when there is a written agreement.
When evicting tenants in terms of a verbal lease agreement, they go through the same procedures as for tenants in terms of formal lease agreements.
If tenants fail to comply with their lease obligations in terms of a verbal lease agreement, they can be evicted from the property as set out in the Act. In such circumstances, a landlord has the right to approach the Rental Housing Tribunal or the GPA.
It should be noted that it is not possible to evict tenants who owe arrears rental for less than two months. Only where tenants have committed serious breaches, including those that require immediate eviction, such as physical violence or harassment.
Tenants are entitled to 20 days’ written notice of the termination of their lease, even if there is no written lease in place. The same notice should also be provided where a landlord terminates the lease because the property is to be sold to someone else, necessitating the sale of the property ‘with vacant possession’.
Even where the tenant fails to pay the rent, a landlord must still provide them with 20 days’ written notice of the termination of the lease. Failure to do so could result in substantial delays in the eviction process being finalised.
Common reasons leading to the termination of a verbal lease agreement include:
Unlawful evictions happen on a large scale in South Africa, as landlords are often impatient and want to get rid of tenants who have fallen behind in their rent payments and don’t comply with the lease. These landlords think they will retrieve the unpaid rent once the tenants are removed.
This thinking is wrong.
Evicting Tenants with a Verbal Lease
Aside from false representations which are punishable under the SRA, the courts generally expect parties to adhere to their own deals. In the case of verbal lease agreements for the rental of immovable property, the duties of landlords and the rights of tenants are set out in section 5 of the Rental Housing Act of 1999 ("the Act"). These general duties include maintaining the leased property in a condition which is fit for occupation and cannot lead to the tenant being in contravention of any law or health and safety regulations.
However, if the payment of rent is disputed by either the landlord or tenant then a dispute arises in terms of section 5(1) of the Act. The Act specifically grants a tenant the right to withhold the rental payment should this occur. It is therefore a common restriction that tenants are allowed to withhold rent when they have not complied with the general duty of the landlord to maintain the premises.
Landlords will often try to evict a tenant when they have withheld rent. Landlords are required to prove that the lease agreement is in force and that the tenant has breached the terms and conditions. In the case of a written lease, this is fairly simple as the lease will usually provide the period of the lease and the amount that is owed in rental arrears. An argument regarding the existence of a breach or whether the landlord has fulfilled his obligations can be countered with a lease that clearly stipulates these rights and obligations in writing.
This becomes complicated, however, in the case of a verbal lease agreement. It becomes difficult to prove what was agreed upon by way of a verbal lease, especially if the relationship between landlord and tenant is at an advanced deterioration. This worsens the situation for landlords who cannot, for example, deny the existence of the tenancy agreement, even if the tenant is in rental arrears, due to the statutory framework. It leaves little room for interpretation.
The problem of eviction of a tenant where there is a verbal lease agreement lies in the tenant’s state of mind . This would often lead to an argument about what the particular terms are of the cause of the dispute in the first place. A business tenant may encapsulate the issue as a failure to evacuate premises contrary to the agreed terms. An ordinary consumer might consider it an eviction process to remove her from her home. Either way, a dispute likely exists because of the relationship between the parties and how well they have communicated.
The cause of this state of mind may lie in the fact that the courts, especially within the jurisdiction of the Rental Housing Tribunal, often walk-the-line of appeasing both parties in order to find a solution which both parties are satisfied with. The position of the tenant, often viewed as the weaker party, is protected strongly against eviction as he has little room or bargaining power.
Despite the difficulty in evicting a tenant under a verbal lease agreement, it is possible to prove and frustrate a tenant’s arguments against eviction. For example, in the case of Van Loggerenberg & Lukeys Go-kart Randburg (Pty) Ltd v Jackal Creek Property Developers (Pty) Ltd and another 2013 (5) SA 177 (WCC), the court held that while it was true that the tenant could not recall exactly how the intention of the parties was to be recorded in a written lease agreement, the evidence and the probabilities suggested that they must have intended to have a written agreement which included a rental provision.
This demonstrates that while it is fraught with potential risk to the landlord and the tenant, it is possible for the burden to be shifted onto the tenant to prove that the intention of the parties was, for example, to only pay a fixed preferential price for utilities and municipality rates and service charges. The landlord may then move for eviction on the basis that the tenant had not paid the rent due to them within a reasonable time after the due date as contemplated in the verbal agreement.
However, there have been no cases currently available that have specifically dealt with the eviction of a tenant under a verbal lease agreement within a purely residential context.
Best Advice For Evictions on a Verbal Lease Agreement
Tips for Handling Evictions in Verbal Lease Agreements
Regardless of which side of the situation you are on, there are some tips that can help you navigate an eviction with a verbal lease. If you are a landlord, here are some things you should do when there is a dispute with a tenant. First and foremost, it is important to keep careful records of everything regarding the lease. That means any agreements, rental price, damage reports, payments, and notifications of default should be kept in a secure location. Even if you have a verbal lease, it can be very beneficial if they have paid by check and you have copies of their checks and any memos written on them. When the situation arises where you must evict, you will have important documentation to prove your case in court.
When there is a disagreement between the landlord and the tenant about the agreement, there are some steps you should follow to try to resolve the issues. The first step is to talk to the tenant (in person is better than talking on the phone.) Make sure to keep a record of this conversation and the resolution that was decided upon, preferably in writing and signed by all involved. If a resolution cannot be reached, try to use mediation to find one. Mediation is a great way to come to a peaceful agreement unless the parties are simply not able to resolve their differences. The court will ask you if you tried mediation before going to court.
If the agreement has not been lived up to, such as the tenant hasn’t paid the rent, the process to initiate an eviction should be started. This requires giving the tenant a written notice. The length of the notice should be at least several days, preferably a full 30 days. It should also be made in "significant places" of the rental property.
The key to a successful outcome in any legal situation is to keep good communication lines open between all parties involved. If you are not the landlord, it is up to you to make sure to keep that process going and let your landlord know if anything is happening that may cause conflict.
Legal Help And Resources
While it is always recommended that a written lease be entered into, many landlords and tenants still do business without a written agreement. When verbal lease agreements have been entered into, there are specific legal obligations that both landlords and tenants must follow and pursue when an eviction or forceful removal is at hand .
In the circumstances where a tenant is unwilling to move out and has been served with an eviction notice or summons, it is recommended that both parties seek legal assistance if the matter cannot be resolved without court assistance. Landlords and tenants can seek assistance for free through local legal aid services and organizations. There are also plenty of tenant support groups and organizations that offer information on landlord-tenant laws available online.