Legal Studies 1010

Section 3 - Renting a Home

Lesson 12 - Signing a Lease


Put simply, when it comes to accommodations, a lease is any tenancy agreement between a renter and a landlord.

When a lease is created, the landlord is called the owner or lessor and the tenant is the occupier or lessee.

Although some leases are verbal, most are written, often in a very formal, legalistic style.

Every lease should specify the following information:

  • the period during which the premises are to be rented
  • a statement to the effect that the lessee is granted exclusive possession during this period
  • the address of the property
  • the amount of rent to be paid during the tenancy

Lease: a contract between a landlord and tenant for the rental of a property

Lessor: the landlord in a leasing arrangement

Lessee: the tenant in a leasing arrangement

You may be more likely to find yourself a lessee (tenant) in the foreseeable future than a lessor (landlord). For this reason, the emphasis here will be on the advantages and disadvantages a lessee e xperiences in signing a lease. The chart that follows outlines some of these important advantages and disadvantages.

How a Lease Affects a Lessee 


 
 Advantages
  • A lease creates security of tenancy for a stipulated period.
  • A lease normally creates a fixed rent for the duration of the tenancy.
  • A lease can provide agreed-upon solutions to problems likely to arise.
  • A lease can allow a landlord to provide incentives to a tenant; for example, free cable service or one month's free rent.

  Disadvantages

  • A lease is a binding contract that can lock a tenant into a tenancy even if he or she wishes to move.
  • If a tenant breaks a lease, a breach of contract occurs, the landlord can sue for rent payments owing and/or the costs involved in finding a new tenant.



Test Yourself:

  1. Nina is thinking of moving into an apartment and has been told there's a one-year lease involved. Nina has applied to a college in a different city; if she's accepted, she'll have to move there in the fall. What advice would you give her?

Turn to the Suggested Answers at the end of this lesson and compare your answers with the ones given there.


Assigning and Subletting


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You've been told that if you sign a lease you're locking yourself into a contract. In reality, landlords will often let tenants break a lease if they give enough notice to allow the landlord to find new tenants. So if you ever want to break a lease, probably the first think to do is to talk with your landlord. If this doesn't work, two other ways of getting around a lease you no longer want are to assign the lease or to sublet the property.

If a tenant assigns a lease to another party, that party becomes the lessee and must pay the rent to the landlord and be responsible for all the other obligations of a lessee.

By contrast, if a tenant sublets the property, or part of it, to a third party , that original tenant remains the lessee, but now he or she is the landlord to the third party. In either case, though, it's important to be aware that ultimately the original lessee is responsible for the lease. So if the third party fails to pay the rent or damages the premises, the original tenant is liable to pay what's owing.

Assigning: to turn a lease over to another person who will become the new tenant and pay rent to the landlord

Subletting: as a tenant, to rent a property (or part of it) to a third party who will pay rent to you

You can't assign a lease or sublet a property without the permission of the lessor (landlord), but he or she can't normally refuse permission unless there's a good reason.

Subletting is more common that assigning; one reason is that you can sublet for just a short while-when you're on vacation for two or three months, for example-and resume occupancy yourself when you get home.


Test Yourself:

2. Hannah has decided to leave the country for the next year. Unfortunately, she'll be forced to bread her lease. Explain her legal obligations and the options open to her.

3. Jordan sublet his apartment to this friend Yvette for three months. The agreement was that Yvette would pay rent to the lessor as Jordan had been doing. When Jordan returned, he discovered that Yvette hadn't kept up her payments and the lessor was bringing a legal action against Jordan for money owing. Jordan sought legal aid, hoping to divert the whole action against Yvette; after all, she was the one who'd failed to make the payments.

a. Will Jordan be successful? Why or why not?

b. What would you suggest Jordan do to rectify the situation?

Turn to the Suggested Answers at the end of this lesson and compare your answers with the ones given there.


Suggested Answers

  1. You should probably suggest that Nina find an apartment where she can have a periodic tenancy. Locking herself into a lease in her situation wouldn't be very sensible.

  2. If Hannah up and leaves, she'll still be responsible for her rental payments. If your landlord is able to find another tenant, Hannah will likely still be responsible for any costs involved in this process. Probably the best advice you could give Hannah is to talk the situation over with her landlord right away. If the landlord is understanding, Hannah may be allowed to break her lease if she allows enough time to find a new tenant. Another option for Hannah is to sublet her apartment or assign the lease to another person-as long as she gets her landlord's approval.

    1. No. Jordan is responsible for paying rent to the lessor. The lessor and Yvette never entered into a rental agreement.
    2. After paying the landlord the amount owing, Jordan could begin a legal action against Yvette to recoup his losses. Probably his first step, however, would be to try to come to an arrangement with Yvette without going through legal channels.