1. Length of the lease; Monthly, daily, yearly, etc.

2. Amount of the rent;

3. Names of the parties;

4. Description of the property;

These equal the acronym LAND. It is an interesting fact that leases or rental agreements for LESS than ONE year do not have to be in writing. But enforcing an unwritten rental is very, very difficult in a court of law. It becomes a situation where it one party deniess what the other says. The judge has to try to make sense out of the situation and one party is probably going to be very unhappy with the resulting judgment. In California, the law says all rental/lease agreements for MORE THAN ONE YEAR must be in writing and signed by the lessor; but if the lessee does not sign and moves in and pays rent, he or she is bound by the terms of the lease.

1. Duration; How long is the lease. In the text there are time periods listed for various types of leases such as land, mineral leases, and leases relating to minors.

2. Amount; The amount of rent, money paid for the use of the property must be given and when it is to be paid. Technically, rent is due at the end of a period, but it is allowable to have an agreement where the rent is prepaid on the first of every month. The first of the month (prepaid) is the most common form of rental payment.

If a property is sold while a tenant is in occupancy, the rental amount paid will be divided between the seller, while he or she owns it, and the buyer receives the balance for the period of time left when the buyer owns the property. Example: property sells and closes escrow on 10th of month. Ten days rent will be credited to seller and 20 days rent will be transferred to buyer. This is called proration of rents. All items that are prorated in a sale are based upon a legal month which is thirty (30) days.

3. Security Deposits; Security deposits, cleaning deposits, etc. are deposits of monies given by a lessee to a landlord/lessor for any potential damages that may occur while tenant is in occupancy. If a property is damaged, the lessor may use these funds to repair damage when the tenant vacates a property. The landlord has 21 days from taking back occupancy after a tenant moves or vacates the property. Security deposits may be used for past due rent; or if the tenant leaves personal property behind and the lessor has to store the property; and to repair all damages and then send any remaining deposit to the tenant at any forwarding address. If a property sells, all deposits are transferred to the new owner to be used for appropriate expenses at a future date. The new owner has the same 21 day requirement as the previous owner.

4. Assignment and Subleasing Provisions. A sublease is a transfer of the entire leasehold estate to another person called a sublessee. The tenant may, if there is no provision to the contrary, assign or sublease the property to another. If a sublease is done, the original tenant leases/rents the property to another. It is usually referred to as a “sandwich lease.” The original tenant is still responsible for the original lease and the new tenant is leasing/renting the property from the original tenant. The secondary tenant is responsible to the original tenant and the original tenant is responsible to the landlord. An example would be: Home builder John leases a large parcel of land from the owner. He, the builder, becomes the tenant/lessee. John then builds a group of homes on the property. He sells the homes to buyers. The buyers own the home and lease the property from John. They become sublessees to John for the property and own their homes. At the end of the lease the property reverts to the original owner of the land and the owners of the homes have a problem. They own their buildings, but have no rights to the land. At this point there must be something done. Does John renew the lease with the landowner? Do the homeowners lease the land from the landowner? Does the landowner sell the property to the homeowners? Do the homeowners abandon their homes? Do the homeowners remove their homes? Something has to be done as the homeowners are sublessees and have no rights to the land upon expiration of the original lease between John and the landowner. When a developer builds apartments on leased land and then leases out the units individually he or she has a sandwich Lease. It does not have to be homes; it can be any type of property. Commercial stores use leased land quite often. Many of the major grocery stores own their buildings and have a long-term lease for the land. They also lease their buildings to other stores and continue with the land lease for the property. The tenant of the store pays rent for the building and the original store owner pays rent to the landowner for the land. These are both examples of sublease situation. Tenants can do the same thing. A tenant rents an apartment and then rents it to another party. The original tenant pays rent to the building owner and the sublessee pays rent to the original tenant.

If a tenant wants to be relieved of all responsibility for the lease, he or she must ASSIGN the lease to another with the landlord’s permission. The new tenant and landlord will create a Novation agreement where the new tenant assumes all responsibility for the lease and the original tenant is totally released from any obligations. This is referred to as an ASSIGNMENT of the lease. If the lease is not assigned, the original tenancy remains in effect and a sublease situation exists.