Oral Rental Contracts Vs Written Rental Agreements

For most of us, renting a place to live is a big decision, and entering a rental agreement marks an important step in the creation of a contractual relationship between a tenant and a landlord. There is a good chance that either you or someone you know rents their primary residence in California.  According to the 2015 American Community Survey conducted by the U.S. Census Bureau, 46.5% of California households were renters.

There are two categories of rental contracts: a lease or a periodic rental agreement. When entering into a lease, it is recommended to have it in writing, but a lease can be oral too. A lease establishes all the terms of the contract and lasts for a predetermined length of time. A lease doesn’t automatically renew at maturity. Similarly, a periodic rental agreement can be an oral or written contract but it differs from a lease because it documents the number of days between rent payments. A periodic rental agreement expires at the end of each period for which the tenant has paid rent and is renewed by the next rent payment. The agreement automatically renews unless the parties to the contract agree otherwise and provide each other with proper notice.

Oral Rental Contracts

Oral rental contracts are allowed and are fully enforceable in California, however, if the rental period is for more than one year, the agreement must be in writing. If you pay rent for your dwelling, you have a contract even if your rental agreement is not in written form.  An oral contract imposes some obligations on the landlord. Within fifteen days of the oral agreement, a landlord must write down the contact information for the person authorized to accept rent, the form in which rent may be paid, and the person responsible for handling complaints.  A landlord cannot demand payment in cash unless a previous check or money order has been dishonored or stopped and the landlord is obligated to issue a receipt for each rental payment made.

Written Rental Agreements

Written rental agreements are always preferred because it expresses the obligations of the parties involved. Written contracts can be tricky, be mindful of a landlord who asks for a waiver for various protections that California tenants are rightfully owed. Some of the more common protections that a dishonest landlord might ask a tenant to waive concern the right of entry, the right to pursue legal action against the landlord for failing to maintain the property; and rights granted by rent control laws. Another issue that the landlord might try to manipulate is the security deposit. Security deposits cannot be non-refundable and must be returned to the former tenant within three weeks of vacating the property and deductions, if any, must be itemized and a record must be given to the former occupant.

California is home to a significant population of Hispanics and Latinos as such it is not uncommon for a lease negotiation to be conducted entirely in Spanish. If the landlord discussed the lease in Spanish then the landlord must give the future tenant a lease in Spanish. However, if there was someone else present during the lease negotiation who translated the details of the lease then the aforementioned requirement need not be met.

A rental agreement is a contract and with it comes to the rights and obligations of the landlord and the tenant. It is essential that you understand your rights and duties to minimize future conflict.

By: David Pruitt, MBA, J.D., REALTOR at Zenith Real Estate Services Inc. www.zentihresi.com