Signing a lease is a fairly common business transaction. It can also result in a fairly common mistake – not fully executing the lease and making it invalid.
Lease laws in Ohio require all leases of three years or more to be acknowledged and witnessed by an official, such as a notary public. So whether you are signing a lease for your business to take over a space or you are in the business of leasing space to tenants, don’t forget to fully execute the document by having it acknowledged by a notary public.
What are the consequences?
If your lease isn’t witnessed by a notary public, what happens? The Ohio Supreme Court ruled on this issue in 2008 (2008 WL 4964670 Ohio App 11 Dist, Burger v. Buck). Their official decision is that a lease exceeding three years that doesn’t meet the notary requirement is invalid and becomes a month-to-month tenancy.
That means that if the landlord and tenant continue to treat it as valid and meet their responsibilities – for example, appropriate maintenance by the landlord and rent payment by the tenant – that only the duration of the lease is affected. If the tenant is paying monthly, it becomes a month-to-month arrangement. If they pay yearly, it becomes a year-to-year arrangement.
That doesn’t provide any security for either party. Property owners looking for long-term performance from their property would not have the guaranteed cash flow that a valid three-year lease offers. Tenants would not have the stability of knowing that their lease rate and ability to remain in their space is guaranteed for the life of the lease.
The strength and force of law related to leases are in the details. At Aronoff, Rosen & Hunt, we recommend that you utilize the services of a law firm whenever you enter into a contractual agreement, such as a lease.