Signing Leases

Within the last few weeks I have reviewed a number of leases that have shown a common flaw.  That flaw relates to the way the lease agreement was signed.  While seemingly insignificant, not having the lease properly signed can render it unenforceable.

Part of the confusion stems from the varying requirements imposed by state law.  Without going through a lengthy analysis of all the applicable rules, the following is a list of DO’s and DON’T’s that should help you in your business.

DO:

  1. Make sure all parties to the lease sign it.  This may sound obvious, but in a rush to close a deal, people forget to check that all signature blocks are filled in.
  2. Make sure the correct person is signing.  Again, this may seem perfectly obvious but incredibly, people forget.  I have found corporations signing as individuals, landlords signing as tenants, one business signing as if it were a second business, etc.  BE CAREFUL.  Read your lease to make sure all parties and their signatures match.  Double check corporate signatures to make sure you include the title of the person who has the authority to sign, and that they are signing in their official capacity.
  3. Carefully check to make sure all signatures, especially the landlords, are acknowledged (notarized).  All leases for longer than one year must be notarized.  Failure to do so leaves the lease subject to attack.
  4.  Make sure all tenants sign the lease.  Trying to obtain and enforce a judgment for back due rent becomes much more difficult if a person was arguably never a tenant.  This applies to signatures on “House Rules” types of agreements as well.  In short, don’t make enforcing your agreement tough because you have gotten only one of two or more tenants to sign the lease.

DO NOT:

  1. Use a corporate form of acknowledgement (the notary paragraph) for an individual and vice versa.  This is a popular way to make a mistake, and in some circumstances, can render your lease unenforceable.
  2. Forget to request documentation authorizing an agent to sign for another.  Check to see if there is a Power of Attorney authorizing the signor to act on behalf of the landlord or tenant.  Also request copies of corporate resolutions, relevant portions of partnership or trust agreements, or similar documentation.  This will help prevent the party you are trying to enforce the lease against from saying, “Oh, that person never had authority to sign that for us,” and thus attempt to avoid the lease.

Once again, a little extra work at the beginning can save a lot of heartache and expense down the road.

Published March 1995

This article contains information of general interest, and is not intended to be, nor should it be relied upon as a substitute for specific legal advice.

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