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Quentin Knipe helps clients buy, sell, lease, finance, and develop real estate. Quentin’s real estate work involves handling purchases, sales and leases of commercial property and residential developments; conducting due diligence reviews; and assisting both borrowers and lenders with real estate-secured financing. His development work involves pursuing government permits, approvals, and entitlements, and negotiating and drafting construction contracts, development agreements, restrictive covenants, easements, and maintenance agreements. Quentin also assists real estate developers and investors with tax increment financing and the formation of joint ventures and business entities.

Idaho’s Supreme Court recently issued a new opinion discussing the requirements to form a valid lease agreement. Unfortunately, the case raises as many questions as it answers.

In 616 Inc. v. Mae Properties, LLC, No. 49190 (Feb. 8, 2023), the court reminded us that four necessary terms must be agreed upon to create an enforceable lease: (1) a definite agreement as to the extent and bounds of the property leased; (2) a definite and agreed term (length of time); (3) a definite and agreed price of rental, and (4) the time and manner of payment. If any of those essential terms are left for future negotiations, no lease comes into being and the parties are left with an unenforceable “agreement to agree.” In addition, if the length of the lease term is more than one year, the lease will not be enforceable against a party unless the four essential elements are memorialized in a writing that is signed by that party. The court may, however, overlook the lack of a signed writing in cases where the contract has been partially performed if there is other sufficient evidence of agreement on all the essential terms.Continue Reading Idaho’s Supreme Court Raises New Questions About the Essential Elements of a Lease