I have a tenant who moved in without ever signing a lease, should I be legally concerned of my exposure, or does it really matter?
The building is in San Francisco, where there is rent control. The tenant is also involved in an option to buy the building, but has not exercised his option yet. He has two years left to do so. There are three units in the building, two of which just became vacant and they have first right of refusal to rent them, but after not agreeing to the terms in the lease I have provided, are suing me to take possession and refuse to sign a lease.
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As a general rule, if there is no written lease, the tenant occupies the premises only as a tenacy at will which may be terminated by the Landlord upon notice. Since leases involve real estate, any contract or transaction involving real estate should be in writing to avoid violation of the Statute of Frauds. It would appear in this instance that your tenant has no legal right to occupy the premises without your express permission and that you would be legally entitled to begin eviction proceedings.
Having said that, please note I have emphasized that this is a "general rule." It is entirely possible that there are state or local statutes which provide exceptions to the rule. You would be well advised to consult a local attorney for more specific guidance. "Free" legal advice is worth what you pay for it.
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