Snapshot: leases in the US (Delaware)

rentals

Lease contracts

Are rental agreements in your state subject to any formal requirements?

Residential rental agreements must be in writing in order to be valid for more than one year, and landlords must provide a copy of this written agreement to the tenant. If the lease is oral, the landlord must, upon request, provide the tenant with a written lease agreement that discloses the name and business addresses of all persons who own the rental property or are considered a unit owner. 25 Del. C. §§ 5105, 5106.

Commercial leases can be in writing or oral, and will set out the terms, regulations, terms, and other rules and provisions relating to the use and occupancy of the commercial lease unit. 25 Volume C § 6102 (6). When the owner purchases utility services, redistributes the benefit to the tenants, and constantly measures the use of the tenants in the business unit, the owner may charge and collect from the tenants, by rent or otherwise, an amount not exceeding that which is rented. An invoice will be paid by the utility for the utility service. 25 Del. C. § 6101.

Do state or local laws specify any mandatory or prohibited provisions in rental agreements?

The residential lease agreement must state the name and business addresses of all persons who own the rental property or their resident agent, and all persons who are considered a unit owner. 25 Del. C. § 5105. A residential lease agreement shall not contain provisions where the tenant agrees to waive or assign rights or remedies under Delaware law, authorize any person to recognize judgment on a claim arising from the lease agreement, or agree to release or limit any liability to the landlord arise by law or to indemnify the Owner for such liability or associated costs. These provisions appearing in the lease agreement are unenforceable, and the tenant may sue and recover if the landlord attempts to enforce these provisions. 25 Del. C. § 5301.

A written commercial lease clause authorizing a person other than the lessee to acknowledge the judgment against the lessee is null and unenforceable. 25 Del. C. § 6104.

What are the standard forms of lease contracts used in your state?

There are no standard forms of rental agreement in Delaware; However, the Delaware Industrial Commercial Real Estate Board issued a commercial lease form.

length of time

Are there any state or local laws regulating the terms of lease contracts? Are long-term tenants granted any special rights to extend or renew leases?

In a residential lease, the landlord must give the tenant 60 days’ notice before the lease agreement expires to renew the lease agreement subject to modified or amended terms. 25 Del. C. § 5107. Permanent rental properties, which are renewable in perpetuity, are a small fee. 25 Del. C. § 5304. Residential leases of more than one year must be in writing. 25 Del. C. § 106.

A tenant of any land or premises located in the State of Delaware for a period of 10 years or more may subject the tenant’s lease agreement or the term in the detached building. 25 Del. C. § 2501. A tenant’s term mortgage must be recognized, registered in the appropriate county, and indexed in the same manner required by law for freehold interest and ownership. ID. This mortgage shall not conflict with the rights, priority or compensation of the owner for the rent. ID.

Rental and insurance deposits

Are there any state or local laws regulating rent increases?

In a residential lease, the landlord must provide 60 days’ notice to the tenant before the lease agreement expires that the agreement must be renewed under modified or modified terms, including a security deposit or rent. If the tenant wishes to terminate the existing lease, the tenant must notify the landlord at least 45 days before the last day of the term. 25 Del. C. § 5107.

Are there any state or local laws governing rental security deposits?

Delaware statutory law handles security deposits for residential leases and provides that security deposits must be held in an escrow account at a federally insured banking institution with an office in Delaware. 25 Del. C. § 5514. The security deposit shall not exceed one month’s rent where the lease agreement is for one year or more or for initial residential leases with indefinite terms, or month to month where the lease lasts for one year or more. ID.

Delaware case law does not limit the amount a business owner can request as a security deposit, and there are no regulations or requirements governing the return of a security deposit. Commercial leases can require the tenant to post a letter of credit as a form of security deposit. Letters of credit are governed by Section 5 of the Delaware Uniform Commercial Code (UCC). A letter of credit is generally considered to be enforceable in accordance with its terms and can only be rescinded if it so stipulates. A letter of credit that does not contain an explicit expiration date or other indication of its duration expires one year after issuance, and five years after issuance if the letter of credit states it is perpetual.

Can a tenant withhold rent payments for any legal reasons?

In Delaware, a commercial tenant has no statutory right to withhold rent, and a commercial tenant’s right to withhold rent will be governed by applicable contract law principles and the terms of the lease. While the State of Delaware recognizes the principle of constructive eviction and allows a tenant to move out of the building and terminate the lease if the tenant, by the actions of the landlord, is denied the use and enjoyment of the building, and for that reason has been forced to leave the building, the terms of the lease can prevent the tenant from being able to raise A suit for construction eviction. Tandy Corp. vs Fusco Properties, LP., 1996 WL 280774 (Del. Super. CT. 10 April 1996).

If the landlord fails to keep the rental unit in habitable condition, the tenant has the right to withhold rent until repairs are made. The tenant also has the right to make repairs to the rental unit and then deduct those costs from the rent. 25 Del. C. §§ 5307, 5308. The State of Delaware recognizes the principle of constructive eviction and codifies this protection for residential tenants, and the tenant may seek damages, including a rent deduction, if they are constructively evictioned. 25 Del. C. § 5302; leech against husbands152 A. 729, 733-34 (Del. Super. CT. 1930).

Sub-leasing

Under what conditions is subletting allowed?

Delaware laws do not regulate whether a tenant of a commercial lease can waive the lease. A commercial lease, like any other, is generally transferable unless the lease restricts appointments. Likewise, a lessee under a commercial lease can generally sublet unless the lease explicitly limits subletting. Case law is not clear as to whether the reasonableness standard will be implied when the lease is silent about whether the landlord should be reasonable when giving his consent. Lola Cars Trainee. Ltd. v. Krohn Racing, LLC2009 WL 4052681 (Del. Ch.2009).

For residential leases, the tenant may waive the lease or sublet the building without the consent of the landlord, unless the landlord and tenant agree otherwise in writing. Even when otherwise agreed, a landlord may not unreasonably withhold consent to a sublease. 25 Del. C. § 5508.

Obligations and Responsibilities

What are the general obligations and responsibilities of the owner with respect to the property and what are the consequences of the violation?

In the residential lease the landlord must surrender possession of the rental unit, and if the landlord fails to do so, the tenant may terminate the rental agreement or reimburse the expenses necessary to secure equivalent alternative housing for up to one month. The residential lessor must also have the obligations listed in the 25 Del. C. § 5304 at all times during the lease term. The landlord must keep the rental unit in a reasonable and habitable condition, including maintenance of all electrical, plumbing, and heating systems. If the landlord commits a breach that deprives the tenant of a substantial portion of the benefit or enjoyment of the tenant’s deal, the tenant may notify the landlord in writing of the condition, and if the landlord does not remedy the situation within 15 days after receipt of the notice, the tenant may terminate the lease.

The landlord is subject to a commercial lease to the obligations agreed to in the lease agreement, and the Delaware courts have not found that the commercial landlord or lease agreement has an implied guarantee of habitability, a charter of quiet enjoyment, or a duty to make repairs. The consequences of the owner’s breach are determined by the contract.

What are the general obligations and responsibilities of the tenant in relation to the property and what are the consequences of the violation?

The residential tenant must pay rent when due and comply with the obligations set forth in 25 Del. C. § 5503.

The tenant of a commercial lease is subject to the obligations agreed upon in the lease agreement, and the consequences of breach by the tenant are determined by the contract. Taxes paid or levied by the tenant are deducted from the rent or other demand of the landlord for use or profits of the property. 25 Del. C. § 6105. Distress exists in a lease suit for commercial leases and allows the landlord to file suit in a magistrate’s court judge. 25 Del. C. §§ 6302, 6303. In determining a problem of tenancy, the court shall promptly make an order requiring the plaintiff to provide a cash security or security bond in the amount and in such form as the court shall determine, and an order to a policeman or sheriff in that county directing that all Goods located in the rented premises as soon as the plaintiff submits the bond. The lessee’s property may be released from tax upon submission of a pledge of guarantee with the court. 25 Del. C. § 6307.

insurance

Do the landlord and tenant have any insurance requirements?

There are no legal requirements to obtain insurance for a commercial or residential lease. The parties to the commercial lease can agree that the tenant will take out property and liability insurance or such other insurance as may be necessary, and both parties agree that the landlord will be listed as an additional named insured.

The parties to a residential lease contract can agree that the tenant will receive an insurance policy to insure the tenant’s personal property. In such cases, residential tenants may be considered tacitly insured under the landlord’s insurance policies on the landlord’s properties. Lexington Ins. company against rapun712 A.2d 1011, 1015 (Del. Super. Ct.), aff’d, 723 A.2d 397 (Del. 1998).

Termination and Eviction

What are the rules and procedures that govern the termination of the lease contract by the landlord and the eviction of the tenant from the property?

The landlord may not engage in self-help measures for a residential lease. Delaware requires a landlord to provide 15 days’ notice to cancel an action to evict a tenant. Landlords may evict tenants for unpaid rent, breach of tenancy agreements, tenant actions affecting the health and safety of other tenants in the building, and tenant actions that cause physical damage to the buildings.

Delaware does not allow self-help evictions; Instead, owners, including business owners, must file summary proceedings through a peace court judge. Affordable Car Company Against Dirt, 2016 Super. LEXIS 134 (Del. Super. Ct.24 March 2016).

%d bloggers like this: