Also known as: parol leases · oral lease · verbal lease
Written by attorneys — see sources below.
An oral agreement that creates a landlord-tenant relationship for real property. The agreement is enforceable if its duration does not exceed the period specified in the applicable statute of frauds.
Priya Prasad orally agreed with Phoenix Technologies to lease office space for nine months at a fixed monthly rent. Phoenix took possession immediately and paid rent each month. When a dispute arose over early termination, the court enforced the arrangement as a valid periodic tenancy because the term fell within the one-year limit of the statute of frauds.
Preston Pratt orally agreed with a neighboring landowner to lease farmland for one growing season in exchange for monthly payments. Pratt took possession, installed irrigation equipment, and paid rent for the season. When the landowner later sought to terminate early, the court upheld the oral lease because its term did not exceed the one-year period permitted by the statute of frauds.
The Tulare Lake Basin Water Storage District consists of 193,000 acres of intensively cultivated, highly fertile farm land located in the Tulare Lake Basin. Its population consists of 77 persons, including 18 children, most of whom are employees of one or another of the four corporations that farm 85% of the land in the district. The district was organized pursuant to the California Water Storage District Act. Such districts are authorized to plan projects and execute approved projects for the acquisition, appropriation, diversion, storage, conservation, and distribution of water. Incidental to this general power, districts may acquire, improve, and operate any necessary works for the storage and distribution of water as well as any drainage or reclamation works connected therewith. The costs of the projects are assessed against district land in accordance with the benefits accruing to each tract held in separate ownership. They may fix tolls and charges for the use of water and collect them from all persons receiving the benefit of the water or other services in proportion to the services rendered. Governance of the districts is undertaken by a board of directors. Each director is elected from one of the divisions within the district. General elections for the directors are to be held in odd-numbered years. Only the holders of title to land are entitled to vote at a general election. Each voter may vote in each precinct in which any of the land owned by him is situated and may cast one vote for each one hundred dollars, or fraction thereof, worth of his land, exclusive of improvements, minerals, and mineral rights therein, in the precinct. Appellants are landowners, a landowner-lessee, and residents within the area, included in the appellee’s water storage district. They brought this action under 42 U.S.C. § 1983, seeking declaratory and injunctive relief in an effort to prevent appellee from giving effect to certain provisions of the California Water Code. They allege that §§ 41000 and 41001 unconstitutionally deny to them the equal protection of the laws guaranteed by the Fourteenth Amendment, in that only landowners are permitted to vote in water storage district general elections, and votes in those elections are apportioned according to the assessed valuation of the land. A three-judge court was convened pursuant to 28 U.S.C. § 2284, and the case was submitted on factual statements of the parties and briefs, without testimony or oral argument. A majority of the District Court held that both statutes comported with the dictates of the Equal Protection Clause, and appellants have appealed that judgment directly to this Court under 28 U.S.C. § 1253.
View caseAn oral lease is enforceable if its duration does not exceed the period specified in the controlling statute of frauds, typically one year. Possession and payment of rent accepted under the lease terms may also create a periodic tenancy even if the original agreement is invalid.
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Part performance such as taking possession and paying rent accepted by the landlord can create a periodic tenancy. Substantial improvements clearly referable to a specific longer term may support full enforcement of that term in some jurisdictions.
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The lease receives no effect unless an exception applies. Taking possession alone creates a tenancy at will. Taking possession plus acceptance of rent creates a periodic tenancy that incorporates all terms except the stated duration.
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Promissory estoppel may enforce an oral lease when the promisor should reasonably expect the promise to induce substantial action or forbearance, the action occurs, and injustice can be avoided only by enforcement. Courts limit the remedy as justice requires.
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…may embrace the holders of a wide spectrum of leasehold interests in land, from the month-to-month tenant holding under an oral lease, on the one hand, to the long-term lessee holding under a carefully negotiated written lease, on the other. The system which permitted a lessee for a very short term to vote might easily…