An Overview of Lease Agreements & Lease Disputes in Georgia

Under the Georgia Code, both real and personal property can be the subject of a (commercial) lease agreement.

A lease of real estate, such as with commercial rental property, involves the grant of a right over the property for a term of years by a property owner to another. In such cases, the reversionary interest remains with the owner, and upon the termination or expiration of the lease, all the rights granted under the lease agreement return to the property owner.

The law further states that the rights granted under such a lease may be restricted to a specific interest in the land. An example of such a situation may be found in a residential property lease, which only grants the lessee the right to live in the property. In such circumstances, other interests, such as the right to do business on the premises or to sublet the property, may be excluded from the lease agreement.

On the other hand, a lease of personal property or goods in Georgia involves the transfer of possession and usage rights to another for a specified term, often in exchange for monetary consideration. In defining such leases, the law specifically excludes sales and other transactions that create a security interest over a property from the definition of a lease. As such, a lease should not be confused with a sale, a mortgage, or a lien, as they are all different transactions.

Regardless of the subject matter, Georgia law requires that all lease agreements be in writing. Oral lease agreements are generally unenforceable in court, so the parties may have no legal remedy if the contract is breached in such circumstances.

However, there are some exceptions to this rule, including the following; 

• The contract is for the lease of goods and the total consideration to be paid under the agreement is less than $1000. The amount in question does not include payments concerning the exercise of any option to renew or buy under the lease agreement.

• There is writing in any form that the defendant signs in a lease dispute acknowledging the lease agreement and describing the leased goods and the agreed terms.

However, these exceptions only apply to the lease of goods. Real property lease agreements must be in writing in every case.

Contents of Lease Agreements

Written lease contracts generally contain the following:

• Name and contact information for the lessor and lessee(known as landlord and tenant, respectively, in real property leases)

• A clear description of the property

• A statement of the nature of interest granted and the purpose of the grant

• The duration of the lease with precise dates

• Payment details such as the security deposit, the amount, when it should be paid, and late penalty fees

• Rights and obligations of the parties and the effects of a breach of the agreement terms

• A termination clause and a dispute resolution clause.

While every lease agreement must be in writing, every type of lease agreement is different. Lease agreements should be specific to the property being rented. For that reason, consider getting an attorney to draft the lease agreement if you intend to rent out your property.