Whether to Use a Lease or Rental Agreement
And why a handshake shouldn't seal the deal between landlords and tenants.
Renting your property without a clear rental agreement or lease is an invitation for trouble. The landlord-tenant relationship is complicated today, with laws and regulations governing all aspects of renting residential property. Landlords have more responsibilities, tenants have more rights, and small claims court makes it easy to take disputes to a judge. All of the details of your rental agreement should be recorded in a written lease or at least a month-to-month rental agreement. (For which makes the most sense for you, see Lease vs. Rental Agreement: Which Is Better?, below.)
Why You Need a Lease or Rental Agreement
Some landlords don't use written agreements -- they just have a conversation with the tenant, taken the tenant's check, and let the tenant move in. While oral promises can be legally binding, it can be difficult if not impossible to prove them to a judge. Don't take a chance -- use a legal, complete rental agreement or lease. Here are some other important reasons to use a written agreement.
Avoid Disputes
A landlord who provides no written lease often finds that the result is chaos. With no clear agreement written down, every small disagreement -- whether it's over repairs, the fee for a late rent check, or deductions made from a departing tenant's security deposit -- has the potential to escalate into a nasty legal battle. For instance, what happens if the fine print in the lease says no pets, but the landlord turned a blind eye to the cat when the tenant moved in?
Deal With Key Issues
 | Can my landlord prohibit smoking if the lease doesn't? |  |
In addition to heading off disputes, a good lease nudges the landlord to deal with key issues that might otherwise be overlooked before getting into the rental relationship. The result? Happier, stable tenants and satisfied landlords.
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