Get It in Writing: A Letter of Understanding

There’s a way to nail down an oral understanding that lawyers use all the time. It’s called a “letter of understanding.” 

Some landlords don’t want to bother with a written lease or rental agreement. Others provide a rental document that is unclear on key issues such as the circumstances under which the landlord may enter the rental unit. And some won’t want to take the time to add clauses or promises that the two of you have negotiated—such as the landlord's promise to paint the kitchen or give you the next available parking spot. In any case, you don’t have to settle for the hope that the two of you will remember precisely what agreement you made. There’s a way to nail down an oral understanding that lawyers use all the time. It’s called a “letter of understanding.” 

Here’s a general overview of how it’s done. After you and the landlord have reached an agreement—whether it's regarding rent, deposits, repairs, or some other important term—write down that understanding in a letter to the landlord. At the end of the letter, ask him to respond if he feels you have misunderstood or misrepresented your agreement. Hand-deliver or email your letter or, better still, mail it return receipt requested. Keep a copy of the letter and the post office receipt in a safe place. A sample letter of understanding is shown below.

What good does this do you? Let’s say there’s a dispute over an issue covered in your letter and the two of you end up in court. When you show the judge the letter and the receipt, in most states the judge will presume that your landlord received your letter and agreed with your version unless he promptly wrote back and argued otherwise. If the landlord disputes your version for the first time in court, he’ll be starting with a serious handicap when it comes to convincing the judge that he’s right.

Letters of understanding are useful in any situation where you will be relying on your landlord’s (or anyone else’s) oral promise. For example, suppose that you buy a clothes dryer after the landlord promises that he’ll install a hook-up. If he reneges on his promise, you’ll be stuck with the dryer. Without your letter of understanding safely tucked into your rental papers file, you’ll have a hard time persuading a judge that the promise was made.

Sample Letter of Understanding

August 24, 20xx
Ms. Iona Lott
68 Seventh Avenue
Rockyport, Maine 12335

Dear Ms. Lott,

Thank you very much for agreeing to rent me apartment #4 at 68 Seventh Avenue. I understand that you will lease the apartment to me for $750, due on the first of every month, starting September 1, 20xx, and ending on September 1, 20xx. Thanks for including the parking spot and allowing me to bring my dog Ruff. When I move in on September 1, I’ll have the $750 security deposit that you asked me to bring, along with the first month’s rent.

If your understanding of our agreement differs from mine, please let me know as soon as you receive this letter. If I don’t hear from you by August 30, I’ll assume that I have noted these details correctly. I look forward to moving in on the first.

Yours truly,

Izzy Real, Tenant
1236 Williams Avenue
Rockyport, Maine 12335

More Information on Leases and Rental Agreements

Questions about a lease term or clause 

If you run across terms or whole clauses not discussed here, get more information before you sign the lease or rental agreement. Tenants’ rights groups, which exist in many areas, will be able to answer your questions. Or, if you’re signing a long-term lease for a valuable property, you may want to see a lawyer.

Questions about state law 

The charts in Appendix B contain summaries of essential landlord-tenant laws. In addition, a few states require that specific information be included in leases and rental agreements, such as details on where security deposits will be held and interest payments or specific disclosures regarding the condition of the property. Check your state statute. (Appendix A provides a brief overview of legal research.)

Where to complain about illegal or questionable clauses

If you think a clause is illegal, check Appendix B to see whether your state has a statute that covers the issue. Contact your state’s consumer protection or attorney general’s office for landlord-tenant information. 

Where to find model leases

Nolo has developed lease and rental agreement forms that are clearly written and fair to both landlords and tenants. When you use them in conjunction with the accompanying state-specific information, your document will be legal in every state. Forms (on paper and on disk) are available in Every Landlord’s Legal Guide, by Marcia Stewart, Ralph Warner, and Janet Portman. Also, Nolo’s small book, Leases & Rental Agreements, by the same authors, has tear-out forms.

Rules to Rent By

  • Get it in writing. If the landlord won’t offer a written lease or rental agreement, use the next best thing: a letter of under­standing.

  • Cover the essentials. Make sure you’re clear on the key issues before you sign on the dotted line: rent (how much, when, where due, and how it’s paid), deposits (the amount, use, and return policy), roommates, pets, and parking. 

  • Understand what you sign. Never sign a legal document without understanding what it means. Refer to this book, a tenants’ rights organization, or an experienced friend or attorney if you aren’t sure.

  • Know the difference between a lease and a rental agreement. Bargain for the one that suits your situation.

  • Watch out for illegal lease provisions. Understand your state law so that you will know them when you see them.

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