Verbal Lease Agreement

With nothing in writing, it's a tricky situation, because you have nothing on paper stating what the two of you have agreed to. No matter how nice or trustworthy a landlord may seem, when money is involved, people, even friends, go on guard and protect themselves first. Then it can become a contest of he-said-she-said.

Still you'll know better next time. Get it in writing!

Plenty of renting advice at this site

http://apartments.about.com/

and here

http://en.allexperts.com/c/realestate/190.htm

Quote:

Question
On 7/18/06 I showed our TEXAS rental property to a young couple. After seeing the home, they verbally agreed to rent the property for $800/month, plus a security deposit of $400. They said they would pay 1/2 the depostit that Friday, the 21st, so that we would hold the property for them. They did pay $200, and the home was taken off the market, as agreed. On July 28, 2006, the balance of $200 for the deposit was paid, plus they made a $100 payment toward the rent and agreed to pay the balance of rent, $700, over the following 2 weeks. On August 2, 2006, they called to say they will not be moving in after all. Since we had a verbal contract for them to take possession on August 11, 2006, and they backed out, are we entitled to keep the security deposit of $400 for holding the property for them for 2 weeks? Thanks!

Answer
Yes, you can keep it...but if they try to sue you for it and you do not have a document stating that the deposit is non-refundable if they DO NOT take the apartment, then you could lose.

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Re: Verbal Lease Agreement

echi wrote:

A friend of mine rents a house (in Texas). I made a verbal agreement to sublease a room from her and paid a deposit of $325. One week prior to my scheduled move-in date I backed out of the agreement. Unfortunately, I left my guitar at her house, and she is refusing to let me have it back unless I pay her two weeks rent ($250) [she found another roommate two weeks after my scheduled move-in date].
Does she have the legal right to hold my property? Doesn't my deposit cover this debt? What can I do?

I would have to guess that she can keep your deposit but not the guitar. The deposit is just that and the fact that you paid it would be enough proof that a verbal agreement existed. I'd have to look up the TX statutes to see what the laws are on how far in advance notificaction is required for a forfit of the deposit but I'm guessing it would be the same time period as the lease period (which is usually month-to-month in these sorts of things) so I'm guessing that if you backed out within 30 days of the start date you forfit the deposit.

Keeping personal property isn't usually allowed in such a case though. It isn't like you moved in and caused damage to the place that they has to cover the cost for repairs of.

Your only recourse would be to sue in small claims court.

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Just as an add-on. Apparently in TX if she is renting then her lease must specifically lher to sublease to anyone else.

If you can obtain a copy of her lease or contact her landlord you might be able to find out if her's has that provision. If it doesn't then not only can she not keep your guitar, she didn't have the legal authority to enter into the verbal lease agreement with you to begin with and you could get your security deposit back.

Her landlord may not be willing to talk to you though.

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If she's renting out rooms in a house that she's renting herself, more than likely that's a no-no and stated in her lease. Her landlord may be more than willing to talk to you. Landlord may want to have a "talk" with her too.

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fishin wrote:

Just as an add-on. Apparently in TX if she is renting then her lease must specifically lher to sublease to anyone else.

If you can obtain a copy of her lease or contact her landlord you might be able to find out if her's has that provision. If it doesn't then not only can she not keep your guitar, she didn't have the legal authority to enter into the verbal lease agreement with you to begin with and you could get your security deposit back.

I don't consider that to be good advice. Even if the sub-lessor does not have authority, under her own lease, to sub-lease a portion of the leased premises, the sub-tenant cannot raise that fact as a defense against paying rent. That's what's known in the law as a jus tertii defense, and it just doesn't work. If the sub-lessor is violating her lease, then that's a dispute between her and her landlord and it has nothing to do with the sub-tenant. The sub-tenant can't raise that dispute as a defense to paying under the sub-lease.

In general, landlord-tenant law is covered under chapter 92 of the Texas Property Code. Assuming that the sub-lease is for no more than one year, it is valid even though it is an oral contract. As such, echi, you are responsible for paying rent under the terms of the agreement. If you agreed to pay $125 a week in rent, then you owe your landlord (the sub-lessor) $250. Since your deposit was, presumably, paid to cover damages, your landlord is not obligated to take the rent out of the deposit, although you could probably work out a deal with her to take the rent out of the deposit and return the difference (along with the guitar) to you.

Under the common law, the landlord is entitled to keep (or distrain) your personal property (i.e. your guitar) in partial payment of the rent. Other states have modified this common law rule by statute -- I don't know if Texas is one of them. In any event, you should work out a deal so that she takes the rent out of the security deposit.

I need not add that all communications between you and the landlord from now on, including any agreement regarding the security deposit and the guitar, should be in writing.

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joefromchicago wrote:

fishin wrote:
Just as an add-on. Apparently in TX if she is renting then her lease must specifically lher to sublease to anyone else.

If you can obtain a copy of her lease or contact her landlord you might be able to find out if her's has that provision. If it doesn't then not only can she not keep your guitar, she didn't have the legal authority to enter into the verbal lease agreement with you to begin with and you could get your security deposit back.

I don't consider that to be good advice. Even if the sub-lessor does not have authority, under her own lease, to sub-lease a portion of the leased premises, the sub-tenant cannot raise that fact as a defense against paying rent. That's what's known in the law as a jus tertii defense, and it just doesn't work. If the sub-lessor is violating her lease, then that's a dispute between her and her landlord and it has nothing to do with the sub-tenant. The sub-tenant can't raise that dispute as a defense to paying under the sub-lease.

I should clarify what I was trying to get across there - the intent wasn't for them to raise it as a defense in court. The idea was to raise it with their landlord as a bullying tactic to get their property (and possibly money) back. i.e. "Return my possesions and deposit and I won't mention it to your landlord who may, in turn, decide to evict you for violating your own lease."

I agree with you that legally, echi could be held liable for rent covering the period between the start date of his/her lease until the other tenant's lease started.

Quote:

Under the common law, the landlord is entitled to keep (or distrain) your personal property (i.e. your guitar) in partial payment of the rent. Other states have modified this common law rule by statute -- I don't know if Texas is one of them. In any event, you should work out a deal so that she takes the rent out of the security deposit.

According to the Texas Tenant Advisor:

"The landlord's lien gives the landlord the right to peacefully take the tenant's property, and to sell it after a proper time period and notice to satisfy the rent outstanding. The landlord's lien can be enforced by the landlord without taking any formal action in court ONLY if it is spelled out specifically in the lease, and the lease provision is underlined or printed in conspicuous bold print. The landlord cannot sell or dispose of the property unless this also is written in the lease."

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fishin wrote:

The landlord's lien can be enforced by the landlord without taking any formal action in court ONLY if it is spelled out specifically in the lease, and the lease provision is underlined or printed in conspicuous bold print.

Well, if the agreement was purely verbal, she has no right to keep the guitar, and I agree with the person who said that a threat to blab to her landlord might be effective in inducing her to give it up.

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Re: Verbal Lease Agreement

echi wrote:

A friend of mine rents a house (in Texas). I made a verbal agreement to sublease a room from her and paid a deposit of $325. One week prior to my scheduled move-in date I backed out of the agreement. Unfortunately, I left my guitar at her house, and she is refusing to let me have it back unless I pay her two weeks rent ($250) [she found another roommate two weeks after my scheduled move-in date].
Does she have the legal right to hold my property? Doesn't my deposit cover this debt? What can I do?

Your first issue is the deposit:

Based on what you wrote, I'm assuming that you and your landlord entered a periodic, month to month, verbal lease agreement. You anticipatorily breached the agreement one week before you were to take possession of the room. You notified the landlord. A landlord has a duty to mitigate damages. The landlord in this case mitigated her damages by finding a replacement tenant.

Because you never moved in or took possession of the premises, you did not damage the premises. However, the landlord is still holding a deposit in the amount of $325. By statutory law, your landlord must return the deposit within 30 days. If your landlord retains any portion of your deposit, she must provide a written explanation justifying her alleged damages. In this case, she can probably justify damages in the amount of $250 for a half of a month's rent that she lost when you backed out of the agreement. Accordingly, she must return to you the $75 that remains from the deposit along with a written explanation as to why she retained the $250. She must do this within 30 days of the date that you terminated the agreement. Generally, if she fails to comply with the law regarding security deposits, the law presumes that she is acting in bad faith. You may bring a claim against her (sue her) for your actual monetary damages of $75.00 plus punitive (bad faith) damages plus attorney fees. Some states establish the amount of "bad faith" damages by statute. (Example: treble damages or $500 or whichever is greater.) You must review Texas statutory (landlord-tenant) law to find what the state of Texas provides.

Your second issue is your landlord's dominion and control over your personal property:

Under the circumstances you described, your landlord may NOT retain your personal property (guitar). The deposit was more than sufficient to compensate her for damages (lost rent). Additionally, you did not sign a written agreement that allowed her to place a lien on your personal property for any of her alleged damages. Accordingly, she is exercising unlawful dominion and control over your property. This is a tort called conversion. You are entitled to specific performance--she must return the guitar. If she disposed of your guitar, you are entitled to the replacement value of your property. Additionally, she is acting in bad faith. Because your deposit was more than sufficient to cover her damages for lost rent, her retention of the guitar is a form of extortion--she is using her unlawful dominion and control over your personal property as a means to force you to pay additional monies that she is not entitled to collect. Accordingly, you have grounds to sue her for punitive damages.

What can you do?

Perhaps you should send her a written letter of demand. If you are in agreement that her "lost rent" damages were $250, you should acknowledge that she is entitled to $250, but no more. You should demand that she immediately return the unused portion of your security deposit in the amount of $75.00. You should also inform her that she is excercising unlawful dominion and control over your personal property and demand that she make arrangements to return your guitar immediately. Inform her that she is acting in bad faith and if she fails to comply with your demands, that you will bring suit against her for actual and punitive damages.

If your landlord is "smart," she will promptly return the unused portion of your security deposit and your personal property. If she fails to do so, then perhaps your most prudent option is to bring your claims against her in small claims court.

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Thanks for the responses, everyone.
She has since left me a voicemail message saying that she is going to sell my guitar on ebay and then give me any change that might be left over. Since she clearly has no right to sell my property, would she not be committing extortion? And, does she have to be aware that she is in the wrong in order to be guilty of extortion?
I'm on my way now to talk to the police and see if they can do anything to help.
By the way, I have not asked for my deposit to be refunded... I didn't think that was fair or within my legal rights.

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Thanks, Debra Law!

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A security lien on personal property must be in writing. She doesn't have a security lien on your personal property and she has no lawful right to exercise any control over it.

Your "landlord" friend is exercising UNAUTHORIZED control over your personal property. She KNOWS that her control over the property at issue is unauthorized because she knows the owner of the property--YOU--want it back, have asked her for it back, and she is refusing to comply with your demand. You have not given her your consent nor authorization to control or to sell your property.

Her retention of the property against your wishes demonstrates her INTENT to deprive you of all use and enjoyment of your property until you pay a sum of money that she is not entitled to collect. Now, the voice mail message that she left clearly establishes her INTENT to permanently deprive you of your property. She has told you that she intends to sell your property on eBay.

Exercising unauthorized control over the property of another with intent to deprive the owner thereof is THEFT of property in violation of the penal code. See Texas Penal Code:

http://tlo2.tlc.state.tx.us/statutes/pe.toc.htm

See Chapter 31 of the Penal Code--Theft

Section 31.03 (a) provides, "A person commits an offense [theft] if he unlawfully appropriates property with intent to deprive the owner of property."

Section 31.03(b)(1) provides, "Appropriation of property is unlawful if it is without the owner's effective consent."

Again, you did not authorize or consent to your landlord's control over the property. She has already been compensated for her lost rent because she retained your entire security deposit. But even if you didn't provide her with a sufficient security deposit to cover her damages for "lost rent," she still has no lawful right to exercise control over your property because you did not consent. The law requires that a security lien on personal property must be in writing. You did not provide her with a written security lien on the property. (And, even if you had provided her with a written security lien, she cannot execute upon a lien without complying with statutory notice provisions and procedures.)

IMO, there is sufficient probable cause to believe the crime of theft has been committed and that your landlord is probably guilty.

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Debra--

Good to see you back on A2K.

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Thank you, Noddy.

Echi: Check out the following:

http://tlo2.tlc.state.tx.us/statutes/docs/PR/content/word/pr.005.00.000054.00.doc

PROPERTY CODE
CHAPTER 54. LANDLORD'S LIENS

SUBCHAPTER C. RESIDENTIAL LANDLORD'S LIEN

Quote:

Sec. 54.041. LIEN. A landlord of a single or multifamily residence has a lien for unpaid rent that is due. The lien attaches to nonexempt property that is in the residence or that the tenant has stored in a storage room.

Acts 1983, 68th Leg., p. 3560, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 54.042. EXEMPTIONS. A lien under this subchapter does not attach to:

(1) wearing apparel;
(2) tools, apparatus, and books of a trade or profession;
(3) schoolbooks;
(4) a family library;
(5) family portraits and pictures;
(6) one couch, two living room chairs, and a dining table and chairs;
(7) beds and bedding;
(8) kitchen furniture and utensils;
(9) food and foodstuffs;
(10) medicine and medical supplies;
(11) one automobile and one truck;
(12) agricultural implements;
(13) children's toys not commonly used by adults;
(14) goods that the landlord or the landlord's agent knows are owned by a person other than the tenant or an occupant of the residence; and
(15) goods that the landlord or the landlord's agent knows are subject to a recorded chattel mortgage or financing agreement.

Acts 1983, 68th Leg., p. 3560, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 305, Sec. 1, eff. Aug. 26, 1985.

Sec. 54.043. ENFORCEABILITY OF CONTRACTUAL PROVISIONS.

(a) A contractual landlord's lien is not enforceable unless it is underlined or printed in conspicuous bold print in the lease agreement.

(b) A provision of a lease that purports to waive or diminish a right, liability, or exemption of this subchapter is void to the extent limited by this subchapter.

Acts 1983, 68th Leg., p. 3561, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 54.044. SEIZURE OF PROPERTY.

(a) The landlord or the landlord's agent may not seize exempt property and may seize nonexempt property only if it is authorized by a written lease and can be accomplished without a breach of the peace.

(b) Immediately after seizing property under Subsection (a) of this section, the landlord or the landlord's agent shall leave written notice of entry and an itemized list of the items removed. The notice and list shall be left in a conspicuous place within the dwelling. The notice must state the amount of delinquent rent and the name, address, and telephone number of the person the tenant may contact regarding the amount owed. The notice must also state that the property will be promptly returned on full payment of the delinquent rent.

(c) Unless authorized in a written lease, the landlord is not entitled to collect a charge for packing, removing, or storing property seized under this section.

(d) If the tenant has abandoned the premises, the landlord or the landlord's agent may remove its contents.

Acts 1983, 68th Leg., p. 3561, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 305, Sec. 1, eff. Aug. 26, 1985.

Sec. 54.045. SALE OF PROPERTY.

(a) Property seized under Section 54.044 may not be sold or otherwise disposed of unless the sale or disposition is authorized in a written lease.

(b) Before selling seized property, the landlord or the landlord's agent must give notice to the tenant not later than the 30th day before the date of the sale. The notice must be sent to the tenant by both first class mail and certified mail, return receipt requested, at the tenant's last known address. The notice must contain:

(1) the date, time, and place of the sale;
(2) an itemized account of the amount owed by the tenant to the landlord; and
(3) the name, address, and telephone number of the person the tenant may contact regarding the sale, the amount owed, and the right of the tenant to redeem the property under Subsection (e) of this section.

(c) A sale under this section is subject to a recorded chattel mortgage or financing statement. The property shall be sold to the highest cash bidder. Proceeds from the sale shall be applied first to delinquent rents and, if authorized by the written lease, reasonable packing, moving, storage, and sale costs.

(d) Any sale proceeds remaining after payment of the amounts authorized in Subsection (c) of this section shall be mailed to the tenant at the tenant's last known address not later than the 30th day after the date of the sale. The landlord shall provide the tenant with an accounting of all proceeds of the sale not later than the 30th day after the date on which the tenant makes a written request for the accounting.

(e) The tenant may redeem the property at any time before the property is sold by paying to the landlord or the landlord's agent all delinquent rents and, if authorized in the written lease, all reasonable packing, moving, storage, and sale costs.

Added by Acts 1985, 69th Leg., ch. 305, Sec. 1, eff. Aug. 26, 1985.

Sec. 54.046. VIOLATION BY LANDLORD. If a landlord or the landlord's agent wilfully violates this subchapter, the tenant is entitled to:

(1) actual damages, return of any property seized that has not been sold, return of the proceeds of any sale of seized property, and one month's rent or $500, whichever is greater, less any amount for which the tenant is liable; and

(2) reasonable attorney's fees.

Acts 1983, 68th Leg., p. 356, ch. 5761, Sec. 1, eff. Jan. 1, 1984. Renumbered and amended by Acts 1985, 69th Leg., ch. 305, Sec. 1, eff. Aug. 26, 1985.

Sec. 54.047. OTHER RIGHTS NOT AFFECTED. This subchapter does not affect or diminish any other rights or obligations arising under common law or any statute.

Added by Acts 1985, 69th Leg., ch. 305, Sec. 1, eff. Aug. 26, 1985.

Sec. 54.048. TENANT MAY REPLEVY. At any time before judgment in a suit for unpaid rent, the tenant may replevy any of the property that has been seized, if the property has not been claimed or sold, by posting a bond in an amount approved by the court, payable to the landlord, and conditioned that if the landlord prevails in the suit, the amount of the judgment rendered and any costs assessed against the tenant shall be first satisfied, to the extent possible, out of the bond.

Added by Acts 1987, 70th Leg., ch. 266, Sec. 1, eff. Sept. 1, 1987.

Again, the theft statute provides, "A person commits an offense [theft] if he unlawfully appropriates property with intent to deprive the owner of property."

As you can see by the statutory provisions quoted above, your landlord did not have statutory permission to seize your property for alleged unpaid rent. You did not give consent or authority for your landlord to deprive you of your guitar. Your security deposit was sufficient to cover the rent for two weeks until the replacement tenant took over.

Your landlord unlawfully appropriated your guitar with intent to deprive you of your property. The word "deprive" means the following:

§ 31.01. DEFINITIONS. In this chapter:

(2) "Deprive" means:

(A) to withhold property from the owner permanently or for so extended a period of time that a major portion of the value or enjoyment of the property is lost to the owner;

(B) to restore property only upon payment of reward or other compensation; or

(C) to dispose of property in a manner that makes recovery of the property by the owner unlikely.

http://tlo2.tlc.state.tx.us/statutes/docs/PE/content/htm/pe.007.00.000031.00.htm

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Good evening. I am most certainly not a lawyer. But I have followed this thread with some interest.

The big lesson here is that VERBAL LEASES AREN'T WORTH THE PAPER THEY ARE WRITTEN ON.

It does seem to me that the ex-friend is entitled to keep a portion of the deposit, perhaps, to cover any lost rent until a replacement tenant was found.

What bothers me is the sale of the guitar, or the threatened sale, on ebay. What if the landlord attempts to do that? And sells it for $100. What if the real value or sentimental value to the owner is much higher than what it fetches?

I never read, Debra or JoefromChicago (although I did skim through this) the advice to talk to a lawyer. Too small an issue?

But it seems to me that the sale of the guitar has got to be stopped. Is there a way to do that w/o a lot of expense?

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realjohnboy wrote:

What bothers me is the sale of the guitar, or the threatened sale, on ebay. What if the landlord attempts to do that? And sells it for $100. What if the real value or sentimental value to the owner is much higher than what it fetches?

I never read, Debra or JoefromChicago (although I did skim through this) the advice to talk to a lawyer. Too small an issue?

But it seems to me that the sale of the guitar has got to be stopped. Is there a way to do that w/o a lot of expense?

Up until the sale of the guitar was mentioned, this is pretty much a fairly classic small claims issue at most. We're talking a couple of hundred $$ which is what a lawyer would charge to get involved.

As to your first question, the law doesn't consider "sentimental value" of property. If the landlord sells the guitar, it seems that they would be doing so in violation of the law so he could sue her to get the fair market value of the guitar and she'd be liable for it even if she only sold it for $100.

If he feels the guitar has some other significant value, then the option would be to go to a lawyer and seek injunctive relief to prevent her from doing anything with the guitar until the overall issue is settled. That route may end up costing more than the fair market value of the guitar but if it has significant sentimental value to him then it may be worth it.

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btwechi, I suggest to keep that vocemail! DO NOT delete that!

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fishin wrote:

btwechi, I suggest to keep that vocemail! DO NOT delete that!

I hear ya, fishin!!

Debra Law, I took your advice and sent her a "letter of demand". I wrote exactly what you suggested. She will likely receive the letter today or tomorrow. I made it as friendly as possible, but still I know she's gonna be furious!

I can't thank you all enough. I am truly grateful... (even if I lose my guitar!)

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Is she still your friend?

She appears to be acting vindictive. Perhaps she was hoping that something more than "friendship" would blossom after you moved in?

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Hi, Debra Law.
I just got a voice message from her lawyer saying that she would like to do a "mutual walk-away". She has offered to return my property and call it even (no $75). Her lawyer also said that if he doesn't hear from me by noon, tomorrow, that he is going to "file a claim with the court". Do you know what he is talking about? And should I take the deal?

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