The Motley Fool Discussion Boards

Previous Page

13 Steps to Investing Foolishly / The Renters' Corner


Subject:  Re: Recording a Lease Date:  8/7/2002  12:16 AM
Author:  kwheless Number:  165 of 182

My brother in law just got a lease to sign for his upcoming apartment, and one clause of the addendum states that
"The tenant agrees to not record this lease. Any recording or attempted recording will constitute a breach of this lease."

This is only a guess, but maybe the apartment isn't legal? This would only be the case for private apartments, not complexes.

In my area, "illegal" apartments are very common, probably more common than legal ones. In my area, a homeowner can't just create an apartment and rent it out, even if it's part of his property (like a garage). Any apartment has to be approved and inspected and zoned and given the proper permits (an expensive and time-consuming process, one that doesn't always end in success). It's subject to special local taxes - and of course, the rental income has to be reported to the IRS. So some of them do it illegally, the apartment just isn't registered. I've never heard of "recording" a lease, but leases for illegal apartments often have a clause about keeping the situation private.

Not that it means anything if the apartment is illegal. If the apartment is illegal, then the lease is pretty much worthless. That's the risk of renting an illegal apartment - if there is a dispute, the renter can be thrown out at a moment's notice if the apartment is declared illegal. You might be able to get your money back, but that's about it. (The tenant has some leverage, though, since the homeowner doesn't want the apartment reported either.) But the tenant is always in a precarious position, if there is a serious problem with the landlord, he can't really report it without losing his place to live, and the lease can't be enforced in court. So the tenant had better be getting something in return (usually lower rent).

[Illegal apartments are a huge part of the rental environment here, the real estate agents show the illegal ones right next to the legal ones. They are usually ignored unless there's a problem, because there just aren't enough legal apartments to fill the demand, and if all the illegal apartments were rooted out, then there would be a huge outcry to build more complexes - which locals don't want. So it's rare for an illegal apartment to be "outed".]

So if this is what "record" means, then the landlord is trying to keep the tenant from telling the authorities about the illegal apartment. It's probably not legal - but the lease itself isn't legal if the apartment is illegal, so there's not much difference.


One note: It's possible that even if the apartment is illegal, some parts of the lease might be enforceable (like the security deposit section, for example) but the tenant would probably still be evicted.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us