National Real Estate Exam (PSI)ContractsMedium
A landlord and tenant orally agree to an 18-month lease for a commercial space. No written document is ever signed. If the tenant later disputes the terms, how will a court most likely treat this lease?
- AUnenforceable, since leases longer than one year must be in writing under the Statute of Frauds
- BEnforceable only if the rent has already been paid in full
- CFully enforceable, since oral leases are always valid
- DAutomatically converted into a month-to-month tenancy from the start
Show answer & explanationAnswer & explanation
Correct answer: A. Unenforceable, since leases longer than one year must be in writing under the Statute of Frauds
Under the Statute of Frauds, most leases for a term longer than one year must be in writing to be enforceable. Since this lease is for 18 months and was never put in writing, it is generally unenforceable as written and may only create a tenancy based on actual occupancy and rent payment.
Why the other options are wrong
- B. Partial or full rent payment doesn't automatically make an unwritten long-term lease enforceable as agreed.
- C. Oral leases are enforceable only for terms of one year or less.
- D. There's no automatic conversion rule stated in the Statute of Frauds.
Statute of Frauds (Leases)
A legal principle requiring certain contracts, including leases longer than one year, to be in writing to be enforceable.
- Leases of one year or less can typically be oral
- Leases over one year generally must be written
- Applies broadly to real estate contracts, not just leases
- Protects against fraudulent claims of oral agreements
Memory trick: 'Over a year? Put it on paper!'