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  1. #1
    gmcgann is offline Member
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    Is lease valid without any payment?

    What is the name of your state? North Carolina.

    I rented a house I own in a town 300 miles from where I live. The tenant and I agreed upon the terms over the phone, since I knew him and thought I could trust him. He moved in with only an oral agreement last August.

    To this date he has not paid a dime for rent, deposit, utilities, or anything else. He refused to transfer the utilities to his name and I finally stopped paying the bill in October. Since the gas, water and power are shut off he is no longer sleeping there, but using the property as storage for his belongings. I know it's past time to start eviction proceedings.

    My question, however, is whether or not a valid lease exists? I know most contracts require consideration from both parties to be valid. In this case, I give him access to the property and he (theoretically) gives me rent. If he had paid me anything at all it would certainly be a valid lease, but without that does a true landlord/tenant relationship exist?

    Thanks.
  2. #2
    HomeGuru is offline Senior Member
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    Quote Originally Posted by gmcgann
    What is the name of your state? North Carolina.

    I rented a house I own in a town 300 miles from where I live. The tenant and I agreed upon the terms over the phone, since I knew him and thought I could trust him. He moved in with only an oral agreement last August.

    To this date he has not paid a dime for rent, deposit, utilities, or anything else. He refused to transfer the utilities to his name and I finally stopped paying the bill in October. Since the gas, water and power are shut off he is no longer sleeping there, but using the property as storage for his belongings. I know it's past time to start eviction proceedings.

    My question, however, is whether or not a valid lease exists? I know most contracts require consideration from both parties to be valid. In this case, I give him access to the property and he (theoretically) gives me rent. If he had paid me anything at all it would certainly be a valid lease, but without that does a true landlord/tenant relationship exist?

    Thanks.

    **A: NC law states that oral L/T leases are enforceable, therefore a L/T relationship does exist. This is further supported by the fact that the tenant moved into the property and had the utilities in his name.
  3. #3
    gmcgann is offline Member
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    Quote Originally Posted by HomeGuru
    **A: NC law states that oral L/T leases are enforceable, therefore a L/T relationship does exist. This is further supported by the fact that the tenant moved into the property and had the utilities in his name.
    He never had anything in his name, but my question is whether the oral lease is valid without any payment whatsoever on his part.
  4. #4
    acmb05 is offline Senior Member
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    regardless

    You let him move in so now you have to evict him thru proper channels
  5. #5
    gmcgann is offline Member
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    Quote Originally Posted by acmb05
    You let him move in so now you have to evict him thru proper channels
    Can you give me any references as to why the contract is valid? Thanks.
  6. #6
    gmcgann is offline Member
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    Let me state my question a little more clearly. I know that for a contract to be enforceable there must be consideration on the part of each party. The Fair Housing Act defines "To rent" as to lease, to sublease, to let and otherwise to grant for a consideration the right to occupy premises not owned by the occupant.

    In my case, I let the tenant move in subject to an oral lease, but since he moved in last August he has not paid me a dime. There has been no consideration whatsoever - no rent, no deposit, no payments towards utilities, nothing. Had he paid me even a penny it would clearly meet the consideration test, but since he has paid me nothing does that make the contract, or lease, invalid or unenforceable? And if so, does that imply that there is no landlord/tenant relationship?
  7. #7
    MommyFish is offline Junior Member
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    Quote Originally Posted by gmcgann
    Let me state my question a little more clearly. I know that for a contract to be enforceable there must be consideration on the part of each party. The Fair Housing Act defines "To rent" as to lease, to sublease, to let and otherwise to grant for a consideration the right to occupy premises not owned by the occupant.

    In my case, I let the tenant move in subject to an oral lease, but since he moved in last August he has not paid me a dime. There has been no consideration whatsoever - no rent, no deposit, no payments towards utilities, nothing. Had he paid me even a penny it would clearly meet the consideration test, but since he has paid me nothing does that make the contract, or lease, invalid or unenforceable? And if so, does that imply that there is no landlord/tenant relationship?

    LOL - call it tomato, or tomawto, you still have to get him/his stuff out - to do that you'll have to evict. I would assume the L/T relationship was created when you let him move into your property with the anticipation of payment.
  8. #8
    gmcgann is offline Member
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    Quote Originally Posted by MommyFish
    LOL - call it tomato, or tomawto, you still have to get him/his stuff out - to do that you'll have to evict. I would assume the L/T relationship was created when you let him move into your property with the anticipation of payment.
    If promise to pay at a future date is consideration, what happens when the date passes with no payment? I see that the definition includes "rights, money, promises or property exchanged" but there seems to be a fundamental difference between rights, money and property on one hand, and a mere promise on the other. The former have tangible value whereas a promise does not. If we exchange property, or property for money, or money for rights, there has been an exchange of value. If we exchange property for the promise of money, and no money ever changes hands, it seem that the promise is more one of future consideration rather than the actual consideration itself.

    Example: I agree to pay you $10,500 for a car. I pay $1,000 up front and promise to pay the rest later. Even if I miss those payments, consideration has still been paid. From what I've read the adequacy of the consideration is not an issue as long as there was some. This could require the formality of repossession if you want to recover something. On the other hand, if I had taken the car with a promise to pay $500 per month and five months go by and NO money at all has changed hands is there still an enforceable contract? Or have I just taken your property and you can legally just take it back without the same formal process?

    As to eviction, I've started the process but one of the reasons I'm asking the question is because the tenant left when the utilities were disconnected back in October. The house looks like he just walked out the door one day and didn't come back. I haven't talked to him since the first week of November, his cell phone is disconnected, there is no forwarding address and no one has seen him. He was on a month-to-month oral lease. I know the safest thing is the whole eviction process, but someone has already kicked the front door off the hinges looking for him and I'd like to just move the stuff to storage somewhere ASAP.

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