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Verbal agreement or Written agreement

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Question: MLloyd asked: I have what is considered an in-law apartment; I’d like to rent it out for some extra income. There is a coworker interested in this space but she only needs it for a few months so didn’t want to sign a year lease.  Is it wise to agree to terms verbally since she is going to be there only a short time?

Answer: Thanks MLloyd this is a great question.   When you buy a car, there’s a contract you have to sign before purchasing. When you buy a house, there’s definitely a contract. When you get professional renovations and remodeling done to a property, there’s a contract. So when you rent a property or have a tenant you better make sure there is a contract involved. A valid contract can be hand written with all parties signatures on it and executed by a notary. 

Here’s why, The State of New Hampshire doesn’t care whether it’s your extra special friend or romantic partner living with or renting from you. There needs to be a clear understanding between parties with how much money is involved, what the terms are, and what services are provided. Take it from the Landlady directly- after letting a guy I was dating move in for a couple months onto my property in exchange for doing labor, things got messy when it was time to let him go. I wished there was a contract involved defining the exact terms, even though he was my boyfriend and I was told it was an “act of love”. Love might not cost a thing, but getting sued and liens placed from the work he did certainly do!

In NH, a verbal contract IS a valid and enforceable contract. It’s much harder to prove in court what was said and what the terms were. In the court room, should you go that far, it comes down to hard evidence and not the he said/she said game in the event you don’t get paid the agreed rent money or there is severe damage because your coworker didn’t turn off the water in the tub and it overflowed.

If you have any questions about this, talk to a Realtor. A Real Estate firm will have valid contracts and a professional can help guide you through and help prevent messy situations.    

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