Lease Agreement

Landlord and Tenant: Is There a Valid Lease Agreement?

Everybody needs a place to live, and nearly everyone will rent a home at some point in their life.  Renting a home requires the tenant to enter into a contract with the landlord. On almost all occasions, the tenant and landlord form an agreement without the assistance of an attorney.  Often times, the landlord will present the tenant with a prefilled contract and tell the tenant where to sign. In some instances, the parties do not sign a written contract and enter into a verbal agreement.  Is the verbal agreement a binding contract, and can the tenant simply move out when he or she decides to end the lease? Consider the example below.

John has a small apartment that is attached to his home for rent.  John advertised his apartment online and in the newspaper. Steve is moving to Alaska to start a new job.  He saw John’s advertisement online. Steve sent John an email asking if the apartment was still available. John called Steve and told him the apartment was available for $900.00 per month.  He also stated that Steve would be required to give an additional $900.00 as a security deposit. Steve agreed with the monthly price and security deposit amount, but he had concerns about entering into a long-term lease agreement because he wanted to buy a home once he was established in Alaska.

John told Steve not to worry because the lease would be on a month-to-month basis.

The next day, Steve sent John $1,800.00 for the first month’s rent and deposit.  Neither Steve nor John signed an agreement that memorialized the terms of the rental agreement.  The following month, Steve moves into John’s apartment. Steve lives in John’s apartment for nine months until he can qualify for a loan to purchase a home.  Steve then finds a home that he wants to purchase. He places an offer on the home, and the homeowner not only accepts the offer but agrees to allow Steve to move into the house while waiting for the official closing.

Steve is so excited that he can immediately move into his new house.  He returns to his apartment and sees John mowing the law. He stops John and tells him that he bought a new place and is moving out in seven days. Although John is happy for Steve, he is concerned that he cannot find a new renter to replace Steve in seven days. John informs Steve that he should give him one month’s notice before moving out.  Steve states that he can move out immediately because there is no written contract between the two of them.

Do John and Steve have a valid contract, and can Steve move out without giving John more notice?

Situations as the one described above happen all of the time between landlords and tenants.  In Alaska, a rental agreement, written or oral, must follow the Alaska laws and regulations, including the landlord’s lawful terms for the use of the dwelling unit as specified in the agreement.  A housing lease is a contract that conveys the right to use and occupy property for a certain specified period of time in exchange for consideration, usually rent. Under the law, a tenant may terminate a month-to-month or longer tenancy by written notice at least 30 days before the rental due date specified in the notice.  The notice must include the property’s address, the date the tenancy is to end, and the signature of the person giving notice. This rule goes for both verbal and written agreements.

In Steve and John’s case, they had a valid oral rental agreement.  John offered Steve the opportunity to live in John’s apartment for $900.00 per month, and Steve accepted and paid John $900.00 each month.  Moreover, John established that the contract would be on a month-to-month basis, and the parties conduct conforms to John’s terms. In this case, the lease was a month-to-month lease.

Under the law, however, Steve was required to provide John written notice of lease termination thirty days in advance of permanent vacancy regardless of whether the was a previously specified term of the agreement.

Seemingly inconsequential situations such as the example above can often times lead to complicated legal problems if the parties do not understand their rights and obligations under Alaska law.  The prudent approach is to consult with an attorney to better understand your rights and obligations before entering into a binding contract, so that both parties are left with a full understanding of what their individual legal responsibilities are and avoiding future litigation.

Disclaimer: This article is for informational purposes only.  It is not intended to convey legal advice or establish an attorney-client relationship with the readers of the article.  

Brad Carlson is the Managing Attorney at the Law Office of Bradly A. Carlson, L.L.C.  His practice is focused on providing legal solutions for Alaskans throughout Alaska. He lives in Eagle River with his wife and children.  You can reach Brad at 907-264-6721 or brad@bcarlsonlaw.com.