Are Oral Lease Agreements Legally Binding?

An oral/verbal lease exists when there is no written lease to serve as a contract between a landlord and his or her tenants. In the absence of an agreement in writing, any conversations about the price of the rent, when the rent is due, or how the property can be used becomes an oral contract.

An oral lease agreement is one of the most informal ways that a landlord can rent a property to another person. As a result, they can be prone to conflicts and more difficult than written agreements to enforce.

Do verbal lease agreements hold up in court?

Lease agreements are considered legally binding. However, that’s not the same thing as saying that they are as easy as written agreements to enforce. It is far easier for tenants to allege or dispute violations of the lease if there are no records of the exact terms. You are also still responsible for your legal obligations to those living on your property even if you have not signed a written contract with them. In that way, verbal agreements are often worse for landlords than they are for tenants.

What happens if a tenant breaks a verbal lease agreement?

If a tenant breaks the terms of a verbal lease, you should respond based on the boundaries you have set verbally. For example, if the tenant was told that there was a fine for late rent payments, the fine should be collected when the rent is paid late. You also have the right to evict a tenant for any violations that were discussed as part of the verbal lease, for example, for nonpayment of rent or continuing damage to the property.

If your tenant refuses to acknowledge that the lease has been violated, or simply behaves as if there was no agreement in the first place, it may be difficult to enforce certain terms without proof. Assigning fines by verbal agreement may not happen without evidence or the agreement of the tenant. Even If you cannot easily enforce certain parts of the lease, you can still regain control of your property by filing an eviction.

An eviction in the absence of a lease agreement requires that the landlord have cause. If the cause is related to damage to the property, a 3-day Notice to Quit can be served to the tenant. For most other causes to evict, a 30-day notice will be necessary. Once either of those notices have expired, the tenant must vacate the property or be removed by the court constable.

How should landlords protect themselves from oral lease disputes?

The best way to protect yourself from disputes with oral leases is to have a written lease drawn up and signed by your existing tenants and any future ones. Our lawyers can help you produce written leases that protect all of your interests, and you can learn more when you contact us for a consultation.

Our lawyers can also help you eviction representation in New Jersey. We have helped many landlords reclaim their properties, including those using verbal leases.

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