Rental Fee in a Lease Agreement
A lease is an agreement stated in contractual terms by both parties namely the leasee and leasor or the owner. There are different types of leases in the legal industry, varying depending on the item leased out and the relationship between the two parties. One such example is a rental lease. All leases should follow the correct legal procedure as far as contractual agreement laws are concerned (Arthur & Sheffrin 2008, p.51). A rental lease can be defined as any written or oral agreement between the two parties allowing leasee to use a given tangible property for a given period of time. However, a rental that exceeds twelve months should be included in a written agreement according to the requirements of the statute of frauds (Arthur & Sheffrin 2008, p.51).
An example of a rental lease that will be referred to severally in this paper is that between Angelo who is the lessor and Christie who is the leasee. The two have been engaged in tenancy for quite some time now. To be specific, the tenancy between the two has lasted for more than a year. According to the law and as per the leasing terms, the owner has the right to increase rent after some time (Kamath 2010, p.201). As per the terms of a given lease agreement, the owner does not have permission to interfere with the property during the lease period since it is not in the hands of the owner anymore. In doing this, the owner will be violating the rights of the tenant since the latter is in possession of the property (Anderson 2006, p.117).
In this paper, the author is going to analyse a classical rental lease agreement and identify the legal nuances therein.
The Leasor and the Leasee
The leasor can increase rent after the lapse of the initial period or in other words, they can renew the tenancy terms by increasing rental fees. In this case, Angelo has a right to increase the rental fees but only under the legal terms. He has played his part by alerting his client that on renewal of the contractual agreement, new rental charges will be in effect. For example, an increase of $50 has been imposed by the owner on the client. However, the client has opposed the charges claiming that this is too much for her. On his part, the owner of the caravans settles for an increase of $25 which the client accepts to pay.
After some time, Angelo issued his client Christie with a notice concerning the rental arrears. Now the question is whether Christie should pay the arrears or not. According to the contractual agreement, there are terms and conditions that should be followed to the letter. In this case, the two parties had initially entered into a formal agreement regarding the renewal of the leasing contract. However, after the client bargained requesting the leasor to adjust the leasing fees, the final fee agreed upon was not formerly written down to differentiate it from that contained in the original agreement note. Therefore, the client has the responsibility to pay the arrears without a question.
On the other hand, the owner is not treating the client fairly as far as the second agreement concerning the reduction of the rental charges is concerned. There are general terms that should be taken into consideration when entering into a leasing agreement. But nevertheless, the client has no proof that an agreement was arrived at given that it was written down (Geoffreyt & Dondi 2004, p.32). Therefore she should pay the new rental fees. Here are some of the terms and conditions that should be considered in any kind of leasing agreement:
Leasing Terms and Conditions
- The parties entering into a leasing contract should specify conditions of the contract. For instance the renewal, need for insurance as well as the restrictions on the property
- All parties should agree on default conditions and actual remedies for the same
- They should have specific conditions that should define the renewal and non-renewal terms
- It is always important for the parties to agree on the mode of payment
The terms and conditions stated above should inform the leasing agreement between Angelo and Christie. These terms guides both parties when entering into a leasing contract. The tenancy is always fixed and has a specific period that it is supposed to last. The common law does not take into consideration the duration of the tenancy but the conditions between the parties when they entered into the agreement (Weiss 2009, p.114). For instance, statements like “after summer” or “the end of the any specific season” are taken into consideration when analysing a lease agreement.
A periodic tenancy is the specified time within which the leasee will possess the property. It may be stated in terms of years, months or even weeks within which the rent is paid. In case of a periodic tenancy, the oral agreement should not be taken into consideration otherwise the parties will be breaching the statute of frauds (Akobi 2005, p.48). The statute provides that individuals entering into a contractual relationship should always record all the deliberations and agreements reached at as future evidence (Andersen 2006).
In the case of Ali and Angelo, the two had a dispute which forced them to break the lease agreement. So far, Angelo has entered into an agreement that will last for 12 months but Ali feels that the place is note suitable for him and wants to revoke the contract. He has forgotten that the law can only permit him to terminate the agreement after the stipulated period has elapsed (Andersen 2006).
If he terminates the tenancy before that time he will be forced to pay rent for the remaining period without using the property. It should be made clear to him that the leasing term can be fixed, periodic or indefinite. The two had entered into a periodic tenancy which should be completed within a certain period of time. It should not be terminated before the contract expires otherwise the parties will be breaching the contractual or lease agreement. Ali in this case should decide whether to move and pay for the whole period or to stay until the end of the contract. He can then move after the tenancy period has expired (Akobi 2005).
Tenancy at Will
The tenancy legal statute contains some exceptions. For instance when the tenancy is at will, the tenant can terminate the lease contract at will by issuing a short notice to the leasor. If this was the kind of lease agreement between Angelo and Ali, then Angelo has no right to oppose Ali’s move. There are times when the tenant feels like giving up the property due to unavoidable circumstances by expressing the desire to surrender the property to the landlord. This however should be done in advance and appropriate procedures followed. This procedure of handing over property is referred to as surrender of lease which would have been appropriate for Ali to use. This is instead of threatening to move after his grant was denied (Rosen 2009).
Rent is a major attribute of a lease agreement set within the jurisdiction of the common law. The common law needs some basic definitions of the lease contract for it to be effective (Singer 2005, p.209). The following are some of the characteristics of such a lease agreement:
Characteristics of a Contractual Leasing
- The entire leasing contract should have a definite period defined for both the leasor and the leasee. The period can either be fixed or periodic (Weiss 2009)
- The rental conditions should be communicated to the leasee in clear and understandable terms. Should there be any increase in rental charges, the same should be captured in a written agreement for future reference
- The nature of possession should be clearly communicated to the tenant (Rosen 2009, p.51)
In conclusion, the lease agreement should not be taken for granted under any circumstances. When Angelo is approached by his client regarding the rental arrears, he should not respond by telling them that he will see about it without engaging the client in some kind of an agreement. This confuses the client and it might make them think of withdrawing from the contractual relationship. Formal agreements should be reviewed in the presence of the client. Lack of this can be construed as a deviation the terms and conditions of the contract (Hasnas 2007, p.89).
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