7 Signs Your Lease Agreement Is Invalid


9 Feb 7 Signs Your Lease Agreement Is Invalid

When it comes to a residential lease agreement, real estate investors need to know a few key things for them to protect investment properties and income. Invalid contracts can often lead to legal issues (and income loss) down the road, so it's important to be aware of the signs that it may be invalid and prepare for any potential trouble.

If you're not sure whether or not your lease is valid, read on! We'll help you figure it out with these seven signs your lease agreement may be invalid.

1. The Length of Lease Is Not Specified

If your rental agreement does not specify the length of time a tenant will occupy the property, it is likely invalid. The lease should include start and end dates so that you and your renter know when the agreement begins and ends.

Without a specified end date, either party can terminate the lease. This can cause problems if a renter wants to stay in the rental longer than the property owner prefers after the lease ends. 

2. The Lease Is Not Specific to the Property

If your lease agreement does not mention the specific property that is being leased, it is likely invalid. The lease should include the address of the rental property and a description so that both parties understand the location that applies to the rental document. 

3. The Agreement Is Not Signed by Both Parties

If both parties have not signed your lease term, chances are it's no longer valid. The lease should be signed and dated by both the landlord and tenant to be considered a legally binding contract.

Human hands working with documents at desk and signing contract

If one party does not sign the lease, they may not be held responsible for any of the terms outlined in the agreement.

4. The Lease Does Not Include All Pertinent Information

A basic lease agreement should include information regarding the property and the people involved. The document may prove invalid if it’s missing important information, such as the monthly rent amount, the tenant's security deposit amount, required disclosures, or critical language. 

If you’re not sure about the verbiage or details that must be included in a rental document, consult a real estate attorney or a property manager. 

5. The Tenant Moved In Before Signing

If the tenant moved into the residential property before signing the lease, it might not hold up in court. In most cases, the agreement cannot be considered binding until both parties have signed it, and a renter can’t move in without a signed contract. 

Getting ahead of the proper process can lead to legal liabilities if a person starts living in a property without documentation that they are approved to be there. 

6. The Property Owner Did Not Provide a Copy of the Lease Agreement

Another sign that your lease agreement could be unlawful is if you did not provide the tenant with a copy of the document. Both parties should have a signed copy for their records. If your renter does not have one, you may not be able to enforce any of the terms outlined in the lease.

7. If New Terms Were Added to the Lease Without the Tenant’s Consent

Adding new terms to a simple lease agreement without the tenant's consent can render a lease invalid. Before signing the document, the tenant should be aware of all terms and conditions.

Businessman Torn white paper. tearing contract

If you make changes to the lease after it has been signed, you should have the tenant sign a new lease agreement or an addendum that includes the updated terms.

Avoid An Unlawful Lease by Consulting Professionals

If you're not sure whether your lease agreement is valid or not, it's best to err on the side of caution and consult with a legal professional specializing in real estate. They can help you determine if your lease meets all the requirements under state law.

In addition, property managers are experts in drafting simple lease agreements and can help you create a valid and enforceable lease. They can also help screen tenants to find qualified renters who are less likely to violate their obligations.

Use Privy to Expand Your Rental Real Estate Portfolio

When investing in rental real estate, it’s essential to have a valid lease agreement to avoid fines, operational restrictions, and lawsuits. These documents outline the responsibilities and obligations of both the real estate investor and the tenant and help protect investment properties and income. 

Privy is an online platform that helps investors find new properties to build a real estate investment portfolio within many markets throughout the country. As long-standing players in the investment game, we’ve built a resource that identifies property matches to your criteria and delivers investor insights to help you make better offers! Reach out soon to learn more about our platform works.

We've used our expertise to write The Ultimate Guide to Lease Agreements!” Download a free copy today.


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