Apr 03

Your Contract is Your Bond – guest post by Justin Daniels, Atlanta Real Estate Attorney

I have fielded several phones calls lately with the same lament: “The lease I signed is not what the landlord promised.” I am sure you have heard the phrase “My word is my bond”, today that really means “Your contract is your bond”.

Most lease boilerplate contains a clause that says the lease supersedes any prior discussions that took place prior to executing the contract. This means that you need to make sure the contract accurately reflects the party’s intent. If a problem arises later, in most instances, the contract language controls and prior discussions are meaningless.

Don’t assume the lease merely memorializes your agreement, more often than not, you will find there are important details that need clarifying. For example, you may have understood you were receiving a reimbursement from the landlord as your tenant allowance. If the final lease states that landlord does the build out but the tenant reimburses the landlord that language will control and the prior discussion is meaningless. That is why its so critical that you make sure all the letter of intent items are properly memorialized in the lease.

About Justin Daniels

Justin S. Daniels is the trusted legal quarterback providing corporate and commercial real estate advice to fast growing privately held entrepreneurial businesses. He practices law as a shareholder with the firm Wagner Johnston & Rosenthal, P.C. Justin's corporate practice consists of representing businesses and business owners in all aspects of their operations from structuring new ventures, advising on acquisitions and divestitures and reviewing and negotiating key vendor, franchise, employment and customer contracts. He has represented a variety of clients in the manufacturing, retail, professional services, consulting and technology industries.
View all posts by Justin Daniels →

Subscribe

Subscribe to our e-mail newsletter to receive updates.

Related Posts:

  • No related posts found
  • sunsets_atl

    My HOA passed an ammendment 2 years ago capping the number of properties in the neighborhood that can be leased out at any one time.

    We are at that limit? However, I would like to / need to “lease” my property.

    I've perused many resources. I'm not a lawyer but the only “loophole” I can possibly see is:

    1. Enter into a “contract” to sell at some arbitrary future date, just as you would if for a legitimate transaction.
    2. Enter into a Temporary Occupancy Agreement, allowing “buyer”/”tenant” to legally occupy the property even though they do not yet “own” the property. Legalese says this is not a landlord/tenant situation and is not a lease, and by (my) strict interpretation falls outside the framework of any leasing covenants of the HOA.
    3. As a stop gap measure, receive in writing a legal option to buy the property back for the same amount stated on the contract in “1'. In consideration, pay some nominal amount for the option.

    Such a headache. Wondering what my exposure would be. If I were the one wanting to lease, I'd also be skeptical of this type of “transaction”.

    Any thoughts appreciated.

  • danielsju

    If you want to lease your property most HOA bylaws have hardship clauses that allow you to make your case to the HOA board to receive approval. If you illegally lease, most HOA bylaws impose fines that an cappear as liens on your property that you have to pay when you sell your property. Obviously you need to check your bylaws to review what the penalties are.

    As for your contract to sell at a future date. I think a temporary occupancy agreement is a lease no matter what you call it. Basically its a lease purchase or you are leasing it to them prior to the purchase. If you sell it with the right to buy it back, you will have significantly more expense to document that transaction. You also run the risk that the person who buys it from you won't want to sell it back and you will have to sue to enforce your option. I think you need to review the HOA bylaws to see if there is a hardship clause and if you can meet its requirements before you entertain the lease back sale/option route.

    Justin Daniels

  • jacksonvillerealestate

    “The lease I signed is not what the landlord promised.”,a very nice article.One of the most common problems buyers face. Nice article.