No. 61695-1-I.The Court of Appeals of Washington, Division One.
July 21, 2008.
Appeal from a judgment of the Superior Court for Clark County, No. 07-2-01857-7, Barbara D. Johnson, J., entered October 10, 2007.
Affirmed by unpublished per curiam opinion.
PER CURIAM.
An lease for a term of more than one year must be acknowledged to satisfy the statute of frauds. An unacknowledged lease for more than one year is effective only as a month-to-month tenancy. Lessor Bruce Melkonian failed to establish facts that would make it inequitable for the lessees to assert the invalidity of the lease. We affirm the trial court’s dismissal of his action for breach of the lease.
FACTS
On July 6, 2005, Theodore and Debi Kay Mahoney entered into a lease providing that the Mahoneys would lease a house from Melkonian for a period of two years. The Mahoneys agreed to pay utilities, including “security.” Clerk’s Papers at 27. The lease provided that if the Mahoneys terminated the lease early, they would pay a termination fee equal to one month’s rent after advising Melkonian of their intent to vacate the property. All the parties signed the lease, but none acknowledged it.
After moving into the house, the Mahoneys discovered the security system was not working. Melkonian incurred some expense to have the system activated, and the Mahoneys agreed to an addendum increasing the rent by $30 per month to cover the monthly fee.
In February 2006, Melkonian wanted to sell the house so he would be free to travel, and asked whether the Mahoneys wanted to buy it. Because they could not obtain a loan for Melkonian’s asking price, the Mahoneys did not purchase it. At the end of April, they notified Melkonian that because Melkonian was going to sell the house, they would vacate it by May 31, 2006. The Mahoneys sent a check for $300 for cleaning the house, in addition to the $500 pet fee and security deposit they had already paid. Melkonian responded by threatening legal action, but returned the $300 check and deposits. He listed the house for sale from May 12 to June 27, but did not sell it. Eventually, he rented the house for a lower rent.
Melkonian sought $4,000 in damages in small claims court. The judge ruled that the lease violated the statute of frauds and was effective only as a month-to-month tenancy, and rejected Melkonian’s argument that the doctrine of part performance took the lease outside the statute. The court entered judgment for the Mahoneys.
Melkonian appealed to superior court. The court concluded there was no basis to avoid the statute, the lease established only a month-to-month tenancy, and Melkonian had not met his burden of proof on damages. Melkonian appeals.
DECISION
Melkonian challenges the trial court’s refusal to apply equity to avoid the statute of frauds.
RCW 59.04.010 and 59.18.210 state:
Tenancies from year to year are hereby abolished except when the same are created by express written contract. Leases may be in writing or print, or partly in writing and partly in print, and shall be legal and valid for any term or period not exceeding one year, without acknowledgment, witnesses or seals.
Melkonian and the Mahoneys agree that the lease was not properly acknowledged because neither party was aware of the statutory requirement that leases for more than one year must be acknowledged. Melkonian argues, however, that it would be inequitable to apply the rule in this case.
Courts will remove a lease from the statute of frauds when a party has done something beyond the requirements of the lease that makes it inequitable to release the other party from its terms:
Washington courts have enforced leases that do not comply with the statutory requisites when the facts make it inequitable for the challenging parties to assert the invalidity of their agreements. These decisions are based upon theories of estoppel or part performance, although the distinction appears more a matter of semantics, since their fact patterns are similar. A tenant’s act in doing some onerous thing he or she would not have done but for the lease, such as paying sums beyond the rent to the landlord, may give rise to estoppel or part performance.[[1] ]
Melkonian argues his provision of the security system and the length of Mahoneys’ tenancy are enough to remove the lease from the statute. But the tenancy was short, and the security system was part of the contract. These small steps are neither onerous nor an inducement to the tenant. Rather, each party simply performed under the lease.
Melkonian relies on cases involving substantial improvements made by tenants, or at tenants’ requests. For example, in Stevenson v. Parker, [2] the lessee successfully avoided the statute because the tenancy had lasted more than four years and the tenant had made substantial improvements to the property in anticipation of exercising an option to purchase. In Powers v Hastings, [3] the lessees, at great expense and effort, repaired farm buildings and fences, installed new plumbing, wiring, light fixtures, and milking fixtures, cleaned the farm, moved their herd onto the property and purchased more cows. In Forrester v. Reliable Transfer Co., [4] the lessor spent large sums making alterations and repairs that benefited only the lessee. In Rowland v. Cook, [5] the lessor built a balcony, installed wiring, and placed radiators according to the lessor’s specifications.
There are no comparable facts here. The trial court did not err in granting judgment to the Mahoneys.
Affirmed.
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