What are our rights if we had a verbal agreement to renovate/repair a residential home in exchange for rent/future rent?

We had the verbal lease for a couple years; there was never a written lease. We kept up our part of the agreement but they didn’t. Now, after about 18 months, they can’t afford the mortgage payments are threatening to sell fast leaving us out on the streets without compensation for our costs/labor. We can’t do mechanic’s lien as we aren’t licensed contractors. We can’t afford to move.

Asked on July 13, 2015 under Real Estate Law, Oregon


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You have left yourself in a very bad position:

1) The agreement you describe would not stop them from selling the house, since a rental agreement of any kind (for money, for labor, for work, or for some combination) does not prevent a landlord from selling his property. (Or would not prevent a lender from foreclosing and taking the property for failure pay the mortgage.)

2) While you may be able to sue him for the value of the rent credit you should have received, if you did not receive some or all of the "future rent" you were to have been credited with, it can be very difficult to sue based on an oral agreement (i.e. it can be difficult to prove if there is nothing in writing and the two parties disagree as to what the terms were, or even if there an agreement in the first place); and furthermore, it is very difficult to recover compensation for your own labor, since it is very difficult to prove the value of your work (as opposed to when you hired a contractor and can prove the value with invoices; or the way you can prove materials costs with credit card or other receipts).

Therefore, you can lose your home, if the house is sold or foreclosed; and while you can in theory sue for money if you never received the rent credit, it may be  difficult case to win.

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