Legal Question in Landlord & Tenant Law in California
Rent
In the year 2000, a friend of my aunt who owns 5 cottages in San Diego, invited my husband and I to move in to one of them. She asked my husband to remodel the cottage to our liking, and then she would rent it to us for an amazing $550.00 a month. She promised to never raise the rent. She also wanted my husband to remodel the other cottages one by one. There was never any rental papers filled out, or any contracts signed. It was all verbal. My question is this: How binding is a verbal contract?
3 Answers from Attorneys
Re: Rent
I cannot add to, or subtract from Mr. Shers' answer. Also, you have not indicated whether there is a problem already, or that you even anticipate one. Follow Mr. Shers' advice, and you cannot go wrong!
Re: Rent
Civil Code 1624 reads, in part, as follows:
1624. (a) The following contracts are invalid, unless they, or some
note or memorandum thereof, are in writing and subscribed by the
party to be charged or by the party's agent:
...
...
(3) An agreement for the leasing for a longer period than one
year, or for the sale of real property, or of an interest therein . . .
She may argue that you all entered into an agreement to lease her property for more than one year, thus any such agreement, in orde to be binding, had to have been in writing.
It seems that your argument would be that your oral agreement to lease never specified a term of more than one year, therefore, this statute would not apply.
Just thought you should be aware of this code section.
Re: Rent
With some exceptions that do not appear to apply in your case, an oral contract is as binding as a written contract, it is just much easier to prove what was agreed to if it is in writing than if people have to testify from their memory and were they may disagree with what they individually, honestly recall. It is to everyone's benefit to have the agreement in writing because memories fade, people remember what is more favorable to them, and people die. Would you expect her heirs to believe the wonderful offer she made you? Also, if that was the sum of the agreement, much is not covered. Who is to pay for the materials, does the rent freeze last until you die or she dies, is your husband a contractor who might have to give her a written estimate [not charging her anything so probably not], what if the IRS decides to charge her imputed income for tax purposes because she is giving you a gift, etc. If you still are on good terms with her, figure out what you would want, what she would want, what is needed to protect both of you, and then sit down with her and prepare an initial written agreement and think about it and then a final agreement.