Some landlords and tenants believe that written lease agreements are to be avoided at all costs because they bind the parties to the agreed-upon time frame and impede any flexibility to end the relationship sooner should circumstances change. Many also feel that the writing is more of a hindrance--a needless formality--and that a handshake should suffice.
Be disabused of that notion.
While leases allow tenants to remain in exclusive possession and control of their space for the stipulated duration, should problems later arise, these documents frequently provide the parties with a number of legal rights and remedies that would not otherwise exist.
For example, if one were to sue the other during the course of the landlord-tenant relationship, the individual being sued would ordinarily be able to assert any claim for damages they might have against the one suing them--known as a "counterclaim"--and could request that the matter be heard by a jury. That request for a jury trial--a matter of constitutional right--would convert a simple rent nonpayment or holdover proceeding to a costly and delay-ridden process to say the least. Taking the typical case from weeks to months to reach a disposition and significantly exacerbating legal fees and costs.
Most lease forms avoid this problem with counterclaim and jury-trial waivers; provisions wherein the parties agree that they will not seek a jury trial or raise "unrelated" counterclaims in the event a dispute in which they are involved is taken to court. (To date, appellate decisions continue to give these waivers full force and effect.) By "unrelated," we mean that courts are unlikely to entertain countersuits that are not somehow "intertwined" with the main case or case-in-chief. So, while a court in a rent nonpayment case would allow a tenant to raise the fact that an apartment was riddled with unsafe conditions or that essential services had been denied, and would award a tenant an offset against the rent due or direct a refund of such sums paid, a judge would likely be less inclined to entertain a property-damage or personal-injury claim as a result of the waiver language. These latter claims would be severed without prejudice to the tenant bringing them in a different case or forum (like a small-claims case) and would allow the main claim--the nonpayment or holdover case--to proceed to conclusion without needless delay or complication.
Along those same lines, most lease forms provide that in the event a landlord is forced to bring a case against the tenant, and wins, the landlord would be entitled to recover its attorneys' fees and costs. There typically would be no entitlement to such fees in the absence of such language. (Under the "American rule," each side to a lawsuit bears its own fees and costs, in the absence of a lease agreement or statute which provides to the contrary.)
Here's the kicker. Under New York State law, when a residential lease provides that a landlord may recover its fees and costs incurred during the course of a lawsuit, a tenant will also entitled to seek such reimbursement--should it prevail on its claims or defenses--even when the wording of the parties' agreement is silent as the tenant's right to recoup such charges.* This reciprocality often serves to deter landlords from commencing frivolous or baseless suits against tenants--a deterrent that would not exist if the parties operated on the basis of an oral agreement or handshake.
Finally, outside of rent regulation (where tenants are afforded the option between a one or two year lease), there are very few restrictions on how long or short a free-market lease may be. It's possible to enter into a lease for as little as a several hours in a day or as long as many decades; with the ability to provide for the premature termination of the agreement upon notice given by one to the other. With free-market leases, there's also no prohibition to an arrangement allowing a tenancy to end prior to the stated termination date (subject to some advance notice, for example), thus avoiding the possibility that one is locked into a long-term arrangement with all of its attendant responsibilities and liabilities.
Thus, when properly structured, there's no question that a written lease can be a landlord's and tenant's best friend.
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* NOTE: This statutory protection--Real Property Law section 234--applies to residential leases only and provides as follows:
Tenants' right to recover attorneys' fees in actions or summary proceedings arising out of leases of residential property. Whenever a lease of residential property shall provide that in any action or summary proceeding the landlord may recover attorneys' fees and/or expenses incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease, or that amounts paid by the landlord therefor shall be paid by the tenant as additional rent, there shall be implied in such lease a covenant by the landlord to pay to the tenant the reasonable attorneys' fees and/or expenses incurred by the tenant as the result of the failure of the landlord to perform any covenant or agreement on its part to be performed under the lease or in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease, and an agreement that such fees and expenses may be recovered as provided by law in an action commenced against the landlord or by way of counterclaim in any action or summary proceeding commenced by the landlord against the tenant. Any waiver of this section shall be void as against public policy.