Affidavit of Lease Agreement: What is it?
An affidavit of lease agreement is a written document that provides details on a lease between a landlord and a tenant. It contains information that describes the property, the landlord and tenant, lease term and rents, security deposits or any alterations to the property agreed upon by all parties.
The primary purpose of an affidavit of lease agreement is to provide proof that the lease is valid . There are circumstances when an affidavit is required, such as in legal or real estate proceedings. In litigation, the court may require one to determine the terms of the lease or to prove the existence of a landlord-tenant relationship. An affidavit may be required for real estate transactions to support a financing statement or for the recording of a lease, which are typically financial transactions.
Important Aspects of an Affidavit of Lease
An affidavit of lease agreement should include the following key components: Identification of the parties and property to be leased – a legal description of the premises, survey/plan reference information, third party involvement regarding the leasing and costs of same, easement use (utility rights), etc. Terms and conditions of the lease (duration and form) – duration of the lease, renewals, terminations, restrictions, prohibitions, maintenance obligations (usually in the form of a table outlining who is responsible for what), etc. Offsets/credits and other deductions – royalties, rental, one time bonuses, copy plans, surveys, geophysical charges, etc. Specific declarations and assertions (i.e. "subject to") – demonstrations that the free hold system is for the benefit of the lessee and not a third party, etc. The above list is not exclusive.
Common Situations that Require an Affidavit of Lease
An affidavit of lease may be required for a variety of reasons. A common situation would be when evicting a private tenant from rental premises. Depending on the circumstances, if a dispute occurs with the tenant over terms or conditions of the lease, an affidavit of lease would be useful during any subsequent legal action to obtain a court order to evict the tenant. A landlord may also need an affidavit of lease during a court proceeding to enforce payment of rent, if the tenant owes rental fees. A further scenario would be in the event that the premises is sold. Since a lease agreement would be a registered agreement in the Deeds Registry, a seller may need to furnish potential buyers with a copy of the lease. The seller may also need to prove the terms and conditions of the lease to obtain consent from the registered mortgage issuer to sell the property. An affidavit of lease in the form of an extract recorded in the Deeds Office would be required when obtaining this passage.
Affidavit of Lease: The Benefits
Having an affidavit of lease signed by the tenant helps prevent disputes between the parties during the term of the lease and provides some support to the landlord after the tenant has vacated the premises. In the event the tenant has defaulted in its payment under the lease, the affidavit provides some evidence that rental payments are overdue. Even though the affidavit of lease is not recorded, it serves as a good document to send to the mortgagee of the premises and to the owners or officers of the landlord to keep on file with the records of the landlord in order to furnish proof of the specific terms agreed to by the parties. If there is a failure to pay rent and the landlord does not otherwise have documentation of the unpaid rent, the landlord may still have to resort to enforcing its rights under the lease with respect to the collateral pledged to the mortgagee of the premises or filing suit to recover the amount of the overdue rent.
Creating an Affidavit of Lease
The process of drafting an affidavit of lease agreement is similar to that of a standard lease, but, for the most part, it is typically not a DIY affair, as it is generally advisable to hire legal counsel to assist with this important legal document. At a minimum, you should have a rental or property management firm with significant experience in what should be included in such an agreement and how to write it. Once the appropriate parts for your situation are determined, the document can be assimilated into what you know to be the requirements of your state’s written contract laws.
While various elements can be merged into an affidavit of lease agreement , the principal aspects will include the following: A supervisor with the authority to enter into the agreement on behalf of the property owner should sign the document, and the property owner must sign. You may also choose to have the lessee sign but this is not strictly necessary as the affidavit is designed for the protection of the property owner. All signatures should be witnessed.
The most important aspect of building an enforceable affidavit of lease agreement is making certain you understand what your state’s real estate laws require. An affidavit of lease agreement is only enforceable if it is completed according to the relevant state and local laws – even the most well-written document cannot stand up in court if it is not legally compliant.
Legal Aspects and FAQs
When dealing with an affidavit of lease, there are several legal considerations you should be aware of:
- All parties involved in the lease must consent to the terms of the affidavit
- An affidavit can only bind a party once it has been signed by that party
- The affidavit must be notarized or signed in the presence of two witnesses to be valid
- If there are any amendments made to the agreement or lease, the affidavit must be updated to reflect these changes
- The affidavit should be filed with the applicable land office.
- An affidavit should be registered to allow a tenant to exercise his/her rights under the lease against third parties. However, where registration has not taken place, a tenant would still be able to exercise all rights afforded to him/her under the lease.
- A tenant may have the right to file an affidavit against an appliance or equipment used on the property that’s bought using his/her own funds for the benefit of the landlord.
- A tenant may be able to exercise all rights against a landlord under the context of tacit relocation of the lease whether or not an affidavit is filed against the property.
- A tenant may have the right to claim security for rents against any changes that have been made to the property.
- A tenant is entitled to institute proceedings in court to recover collateral provided to a landlord.
- Any documentation required to be filed with an affidavit must be submitted physically as well as electronically.
Commonly asked questions about the affidavit:
Yes. An affidavit provides a summary of the key elements of the lease agreement between a landlord and its tenant. An affidavit highlights and emphasizes the most relevant terms and conditions and provides a convenient reference point in the event that any disputes or clarifications need to be made.
An affidavit provides proof regarding matters that have taken place in regard to the lease agreement. An affidavit:
The tenant must obtain approval from the landlord before installing appliances or equipment on the property.
An affidavit protects a landlord in the transit of the lease and prevents a tenant from unilaterally terminating the lease.
A landlord may cancel the lease as a result of:
- A tenant being in substantial breach of the lease
- Carrying out a trade under the lease that’s contrary to the provisions of the lease
- Doing something on the property that’s harmful or dangerous
- Using the property in a way contrary to the provisions of the lease agreements
- Selling or mortgaging any improvements to the property without written consent
- Subleasing the property without written consent
- Letting a party into occupation of the property without written consent
- Abandoning the premises
Under those circumstances, the landlord may cancel the lease with immediate effect and/or claim damages.
Conclusion: The Relevance of an Affidavit in a Lease Transaction
Affidavits of lease agreements serve an important purpose in protecting the interests of both landlords and tenants as part of legal lease agreements and transactions. While statutory efforts in some jurisdictions allow for shorter forms of leases to serve the same purpose, a full affidavit of the lease setting out specific facts and outlining the consideration given for the lease can prove invaluable when faced with a challenge. As with many property law issues , it pays to err on the side of caution and have a written agreement for the conveyance of any interest in land. While real property often carries with it attendant future concerns, such as the potential need for revegetation of the site on which a lease has been entered into, having a formal written agreement will often make it easier to address challenges that may arise in the future.