When There is No Written Lease Agreement

Posted by  wasserman 

I purchased an older multi-unit building. One unit has been occupied by the same tenant for forty years (through three different owners). There is no lease agreement in place. As the new owner, can I request that he sign a new lease? 

The short answer is yes, you may request that they sign a new lease, but no, you cannot compel anyone to do so.  Unfortunately, there are still instances around town where longtime residents do not have a written contract.  The terms of the tenancy in those situations are considered to be oral, meaning word of mouth, but the ability to enforce any particular term is challenging to say the least. 

For starters, when is rent due?  You are likely precluded from requiring a remittance on the first of the month, and if the tenant decides to pay on the fifth, tenth, or even thirtieth day, you are best served to let it go.  Ditto for other typical prohibitions such as “no pets,” “no smoking,” or “no subletting.”  Since there is no signed document that prescribes certain behavior, your enforcement options are limited. 

That said, remedies exist that may help with this situation.  First, you may always ask the tenant to sign a new lease.  Sometimes, a resident may agree to sign something so as to protect and establish rights of the tenancy into the future.  Perhaps the full text of the SFAA Tenancy Agreement might be a bit too much, but there could be a negotiated contract that contains basic terms acceptable to both parties.   

Two, even if the tenant is not interested in signing something, you have the ability to unilaterally impose the terms and disclosures of an updated rental agreement.  Yes, you read that correctly.  Owners in California are free to change the terms of a month-to-month tenancy by issuing written amendments, or in this case an entirely new document, no less than thirty days in advance of the new terms’ effective date.  The law that permits this process is Civil Code Section 827.  However, in places like San Francisco, there is an important catch.  Under Section 12.20 of the Rent Board’s Rules and Regulations, unilateral impositions of new lease terms usually may not be enforced by way of an eviction: 

Notwithstanding any change in the terms of a tenancy pursuant to Civil Code Section 827, a tenant may not be evicted for violation of a covenant or obligation that was not included in the tenant’s rental agreement at the inception of the tenancy unless: (1) the change in the terms of the tenancy is authorized by the Rent Ordinance or required by federal, state or local law; or (2) the change in the terms of the tenancy was accepted in writing by the tenant after receipt of written notice from the landlord that the tenant need not accept such new term as part of the rental agreement.  

However, the mere issuance of a lease, even if unsigned by the tenant and unenforceable through an eviction proceeding, may protect you in important ways.  For instance, the tenant will have the latest lead and mold disclosures, certain covenants authorized by federal, state or local law will be fully enforceable, and people have a tendency to follow posted and written rules.  In other words, the impact of receiving a comprehensive lease agreement with written specifications of what is and is not permitted in the rental unit and within the building will likely sway folks to adhere to a desired course of conduct.  In addition, the commission of certain offensive activities that adversely impact the community, such as nuisance behavior or illegal conduct, could cause a tenancy to terminate regardless of what is or is not spelled out in a signed document. 

Three, consider asking the tenant to sign an estoppel.  While not usually binding in the same manner as a rental contract, estoppels, which are essentially questionnaires asking tenants to describe the salient terms of the tenancy in their own words, may create a mutual understanding of what is and what is not expected.   

In sum, try to negotiate a written lease or estoppel statement if possible.  If there is an agreement to sign an actual lease, remember to adhere to Section 12.20’s requirement that the tenant be apprised in writing that they need not accept a unilaterally imposed term.  And even if signing a formal agreement is out of the question, there is upside in serving an up-to-date leasing packet so that you have issued all required disclosures while your resident has an understanding of what is expected from all building occupants.

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