By Sharon Frankenberg,
Attorney at Law
How many times have you heard the expression “Get it in writing”? That is truly good advice for almost any transaction. Enacted back in 1677, the English Statute of Frauds set out when a writing was required to make an agreement enforceable. Here in the United States virtually every state has enacted its own version of the statute of frauds. Tennessee has a statute of frauds that does not allow a lawsuit without a writing in five situations. In my opinion, the two most important of these are upon:
1) the sale of lands or the making of a lease of real property for a longer term than one year; and
2) upon any agreement or contract which is not to be performed within the space of one year from the making of the agreement.
The original purpose of the statute of frauds was to provide evidence, proof that an agreement was actually made. The requirement of a writing for land contracts provides a level of formality which reflects the solemnity of transferring real property. Both parties must sign. The land must be adequately described. We need clarity, certainty. This also allows a clear cut way to distinguish unenforceable agreements from enforceable ones. Parties being able to sue on verbal commitments to sell land could clog court dockets for years to come.
This is similar to the reasons that long term leases of real property must be in writing. It is important that both parties memorialize their agreement so that it is clear who is bound by the contract, how much the rent is, what the condition of the property is, who is responsible for maintenance, how long the lease will last, what kind of pets are permitted, if deposit are made, to whom and for how much. A hundred possible circumstances must be documented. Leases impact millions of lives every day in our country. We should be entitled to know where we stand and be able to enforce our agreements in court if necessary. The statute of frauds helps us do that.
In my practice I have often seen situations where one party agrees to sell property to another on a “rent to own” basis. Most people think this means that, after making a certain number of payments, the tenants can get a deed from the property owner. The problem is that, without a written contract, the agreement cannot be enforced in court. Yes, honest parties will honor their word and transfer the ownership when the terms of the agreement have been met. That does happen in many cases. But what happens if the property owner dies? What happens if memories fade and the parties now disagree about what the terms of that agreement were? Many people who have faithfully paid money every month have been heartbroken to find that the rug has been pulled out from under them when the party on the other side changes the deal and they have no written contract to enforce. Do not forget to get it in writing.
Sharon Frankenberg is an experienced attorney licensed in Tennessee since 1988. She is a sole practitioner who handles foreclosures, evictions, probate, collections and general civil matters. She represents Social Security disability claimants and represents creditors in bankruptcy proceedings. Her office is in Knoxville and she may be reached at (865)539-2100.