As you will see, the best way to create a Landlord-Tenant relationship is with a written contract…
A landlord-tenant relationship generally arises from an agreement in which a property owner, the landlord, gives another, the tenant, exclusive possession of certain property during an agreed term. In consideration for such possession, the tenant agrees to pay rent and comply with any other conditions and covenants of the agreement. The agreement, or lease, as it is often called, may be an express or implied contract. The contract may be oral or written; however, contracts for the lease of real property for a period of longer than one year must be in writing and signed by the party to be held responsible. Oral contracts for the lease of real property for a period longer than one year may be enforced if the doctrine of promissory estoppel removes the lease from the Statute of Frauds. Moreover, the relationship of landlord-tenant may arise by operation of law. For example, a grantor who continues in possession of property after executing a deed conveying that property to another is presumed to be the tenant of the grantee.
The relationship of lessor and lessee is purely contractual, absent some other special relationship created by the parties. Thus, the lessor and lessee do not owe each other fiduciary duties unless a fiduciary relationship is created by something more than the mere lease arrangement.
When the relation of landlord and tenant exists under the terms of a written lease containing an option to purchase, the exercise of the option by the lessee creates a binding, bilateral contract and replaces the landlord-tenant relationship with one of vendor and purchaser.
Frequently Asked Questions
How is a landlord-tenant relationship created under Texas law?
The relationship generally arises from an agreement, express or implied, written or oral, in which a property owner gives another person exclusive possession of property for an agreed term in exchange for rent and other conditions. The agreement does not have to be in writing unless the lease term exceeds one year.
Does a lease have to be in writing to be enforceable?
Not necessarily. Oral leases for a period of one year or less can be enforceable. However, a lease for more than one year must be in writing and signed by the party to be held responsible. An oral lease for more than one year may still be enforced in some cases under the doctrine of promissory estoppel.
Can a landlord-tenant relationship arise without a lease agreement?
Yes. The relationship can arise by operation of law. For example, a person who continues in possession of property after conveying it to another by deed is presumed to be a tenant of the new owner.
Do landlords and tenants owe each other fiduciary duties?
No. The landlord-tenant relationship is purely contractual unless the parties create some other special relationship. Neither the landlord nor the tenant owes the other a fiduciary duty based on the lease arrangement alone.
What is the difference between a tenant and a subtenant?
A tenant has a direct lease relationship with the landlord. A subtenant has a lease with the original tenant, not with the landlord. The subtenant's relationship is with the original tenant, not the property owner. This distinction matters for eviction, rent collection, and liability.
What happens to the landlord-tenant relationship when a tenant exercises an option to purchase?
When a tenant who holds an option to purchase exercises that option, the landlord-tenant relationship is replaced by a vendor-purchaser relationship. The lease terms no longer govern.