Lease Confusion Forces Tenancy Off Course

by Chris on January 6, 2020

When a tenant first rented a unit, the landlord agreed in writing that the tenant could have a roommate, and if that roommate moved out, the tenant could remain. So, not a co-tenancy agreement.

Later, after the first roommate moved out, the tenant found another roommate. The landlord had the tenant sign a new lease, this time without the promise the tenant could remain — a co-tenancy agreement. When the new roommate gave notice, the landlord demanded the original tenant move out, too. The tenant refused, and things got hostile. The tenant remained in the unit after it was promised to someone else, changed the locks, and filed for dispute resolution.

The arbitrator had to consider two leases, and third lease that was promised but not delivered, two letters — one signed and one not — and contradictory testimony. In the end, he sided with the tenant, leaving the landlord with limited access to the property and unable to provide the unit to the new person he promised it to.

A tenancy agreement can be the glue that holds the tenancy together. But if it’s confusing, it can become the catalyst for a tenant dispute.

Savvy landlords will ask an attorney or paralegal to review the tenancy agreement and provide that vetted document to new tenants. Problems are most likely to occur when the landlord makes changes for a special situation, without consulting the attorney again.

Amendments impact a lease is very specific ways, and when considering them, landlords should ask:

Does the amendment track with the rest of the lease?

Co-tenants have different rights and responsibilities than what is typically provided for in a solo tenancy agreement. Adding a provision allowing a tenant to stay beyond the co-tenancy will naturally contradict other provisions in the lease. Even simple errors — like changing the rent amount in one place but not in another — can cause major problems. Read through the entire lease and exhibits with the amendment in mind and watch for contradictions.

Is the tenancy agreement fair with the new language?

Don’t amend an agreement without considering the big picture. If the amendment adds more of a burden to the tenant — like an additional fee or fewer amenities — then the overall impact could render the tenancy agreement unenforceable. That amendment may be the straw that breaks the camel’s back.

Does the tenant understand?

Tenants have a habit of not reading the lease. In this case, the language from a previous tenancy agreement contradicted the “new” lease. That lease contained provisions of co-tenancy, and those provisions were in direct contradiction to the tenant’s understanding. Same tenant, same unit, same landlord, but two sentences omitted. As the arbitrator states in his decision, if the landlord was going to change terms, “he had a duty to make the change clear to the tenant.”

The Before and After Picture

Tenancy agreements should be in writing so everyone can see the same terms. But don’t let the fact that it’s in writing create a false sense of confidence. Consider what transpired before, and what can happen afterwards.

The before picture includes all the back and forth that went into the leasing process. The tenancy agreement must contain all the material terms that the parties negotiated before agreeing on the terms for the tenancy. Tenants should not be able to rely on verbal promises, previous drafts of the lease, texts, emails or other indications of negotiations that led up to that point.

One way to evidence that all terms are included in the lease is to say so — in the lease. An attorney can help with the proper language.

After the lease is signed, the tenancy could continue for years. Subsequent changes may be made verbally, and the landlord and tenant can have very different interpretations. Additionally, the landlord may forego legal action against a tenant who broke the rules. Those actions — or inactions — can compromise the landlord’s legal rights.

Subsequent modifications after the lease is signed are tricky because it must be clear that both the landlord and the tenant agreed to the same changes. An attorney can tailor provisions that prevent these disputes. One example is to require that modifications must be in writing and signed by both parties. Be careful, though. Actions still speak louder than words, and if the landlord veers off course, so will the tenancy.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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