Oral leases are becoming more common nowadays, and you may find yourself discussing one with a possible tenant. Yes, both landlord and tenant can agree on a lease without written documentation, which will still be valid. But even though it’s convenient, this type of rental agreement still has some risks.
Is an Oral Lease Legally Enforceable?
Sometimes, a prospective tenant and a landlord discuss lease terms verbally without writing them down. This typically happens when they involve month-to-month agreements or when the landlord and tenant trust each other.
But is a verbal lease agreement binding, and is it enough to be legally enforceable?
According to Florida statutes, a verbal lease agreement is legally binding if it lasts less than one year. However, the same regulation says that if your agreement lasts over a year, it needs to be in writing.
Oral agreements are also bound to follow state requirements for all valid leases. These requirements need to be present in both verbal and written arrangements. They include the following:
- The agreement must show the landlord’s intent to give the tenant the right to possess and occupy the property.
- It needs also to show the tenant’s intent to occupy the property.
- The agreement needs to pinpoint the property to be occupied clearly.
- It must include the amount of rent the tenant must pay.
- The agreement must include a provision for the lease’s term or duration. In the case of oral leases, this should be under one year.
Yes, oral rental arrangements are valid and enforceable, but they also present some challenges if you find yourself in one. The issue is mainly rooted in the absence of a formal document you can refer to, which is crucial for disputes.
Oral Lease vs Written Lease in Florida
What’s the difference between an oral vs written contract? Other than the format they’re in and the limitations each of them have, both written and verbal leases have their own pros and cons.
Oral Agreements
Pros:
Even though oral agreements are informal, they are still valid, legal, and convenient. This type of lease works well in cases of short-term stays or if both parties trust each other a lot.
Cons: The biggest and most obvious drawback of oral agreements is that there is no documentation to refer to. If you and the other party do not have terms written down, it would be difficult to prove anything regarding the agreement in court.
Written Agreements
Pros: If you have a formal document surrounding the agreement, both parties will have security. It also provides a document that both the renter and the landlord can refer to during misunderstandings.
Cons: The only drawback written agreements have legally is the long process of creating this document.
How to Prove Oral Lease Agreements?
Not all tenants and landlords have good relationships, and disputes occur more often than not. When disputes escalate to needing court mediation, both parties will require proof that an oral tenancy agreement is in place.
Regarding such cases, both parties will need to find evidence. However, since there is no written document, they will need to find evidence in other ways. Here are some of them:
Rental Payment Receipts
One way to prove that a lease agreement is in place is to provide receipts and bank statements showing regular rental payments.
Witness Testimony
The testimony of witnesses present when the deal was discussed can also help prove the lease’s existence.
Communication Records
Copies of written informal communications such as emails, chats, or text messages related to the lease can be used as evidence of the rental agreement existing.
Risks of Verbal Agreements
While valid and legally binding, oral lease agreements present a level of risk for tenants and landlords; they are not as secure as written agreements. Here are some risks that you, either as a landlord or tenant, may face:
Landlords
The biggest risk for landlords without a written agreement is that it will be difficult to enforce the lease terms.
For example, if you want to evict a tenant due to multiple delinquencies and violations, you may find it hard to do so. Eviction must involve clear and undeniable evidence that lease terms were broken. However, you cannot easily prove your case since there’s no written contract.
Another setback for landlords is the high risk of miscommunication. Written contracts outline the responsibility of both parties regarding the property. Without them, both parties may misunderstand who should cover certain aspects of property upkeep.
Tenants
On the other hand, tenants will not have formal protections if the landlord decides to make sudden changes, such as rent hikes or evictions without notice. This leaves them vulnerable to possible unfair practices that a landlord may use.
Breaking a Verbal Lease Agreement
What happens when one or both parties break verbal lease agreement terms?
There are cases when the landlord and tenant seek to break an oral lease for personal reasons or disputes. In Florida, terminating an oral lease is similar to breaking a written lease. However, the lack of a written document will make the process more tedious.
According to state law, landlords must give tenants enough notice before evicting them or stopping their month-to-month tenancy. Tenants must also notify the landlord if they plan to leave the rental property.
Frequently Asked Questions:
Can You Change an Oral Tenancy Agreement?
Yes, you can. However, both landlord and tenant must agree to the changes. It’s also best to document these changes in writing or have a witness verify them.
What Happens if the Lease’s Duration Was Not Specified?
In Florida, when both parties fail to mention the duration of the contract, it usually defaults to a month-to-month arrangement.
Can You Increase Rent Prices for a Verbal Lease?
Yes. However, as a landlord, you must provide proper notice for the tenant, usually 15 days if the verbal rental agreement is on a month-to-month basis.
Legal and Valid
While you and another person can agree on a lease verbally, it’s much less secure. To minimize risks, it is best to only have this type of agreement with someone you know you can fully trust. A property management company can also help with oral leases through documentation, mediation, and record-keeping. However, to protect both parties, go with the extra step of having a written contract.
A property management company can help you manage and handle formal lease agreements. Check out our online directory for the best one in your area!
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