Leasing License Practice Exam

In terms of lease duration, when does the Statute of Frauds come into play?

1. Leases under one year

2. Leases exceeding one year

3. Any lease regardless of duration

4. Month-to-month leases

The correct answer is: Leases exceeding one year

The Statute of Frauds is a legal principle that requires certain contracts to be in writing in order to be enforceable. In the context of lease agreements, this statute specifically applies to leases that exceed one year in duration. The rationale behind this requirement is to prevent misunderstandings and disputes related to oral agreements, which can be vague and difficult to prove. When a lease is longer than one year, it involves a more significant commitment and investment by both the landlord and the tenant. Thus, the law mandates a written agreement to ensure that the terms of the lease are clearly defined and documented, protecting the interests of both parties. This written requirement is not necessary for shorter leases, such as those under one year, because they are typically less complex and often do not require the same level of formal commitment. In summary, the correct answer reflects the situation where the Statute of Frauds is applicable, emphasizing the necessity of written documentation for leases exceeding one year to uphold clarity and legal enforceability.