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I renewed a 2-year lease agreement under existing terms as requested by my tenant via text. Unfortunately, I did not email the renewal extension and the tenant is now vacating the apartment early. They now state that the lease was a month-to-month lease because a renewal was not signed. Their attorney also asserts that text messages of our conversation agreeing to the lease renewal are not legally binding because (1) Calif Statute of Frauds, codified in Civil Code Section 1624 requires an "agreement for the leasing for a longer period than one year, or for the sale of real property" to be in writing "subscribed by the party sought to be charged." and (2) "there is no binding agreement between parties until written contract is signed." C.L. Smith Co. v. Roger Ducharme, Inc. (1977) 65 Cal.App.3d 735.

Is their attorney correct? Will text messages be considered in small claims court as evidence that the tenants are in breach of contract?

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The tenants guide distributed by the California courts addresses this (partially) on p. 21

The rental agreement may be oral or written, however, it is strongly recommended that the parties have a written rental agreement. The landlord is required to provide the tenant with a signed copy of the rental agreement within 15 days of its execution. The landlord and tenant should retain copies of the signed rental agreement for their records. An oral agreement is an agreement where the terms are agreed upon by spoken communication. This is in contrast to a written agreement where the terms are set forth in a written document. A tenancy term of more than one year must be in writing. Oral agreements for a tenancy term of more than a year are unenforceable.

Text messages are a form of writing. However, looking at the bits of code in the associated footnote, Cal. Civ. 1624

(a) The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent: ... (3) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; such an agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged.

("subscribed" means signed). An unsigned written 2 year lease is invalid, so by default the only lease that exists is a month-to-month lease. That is sort of what the attorney was saying.

One other issue is that para (d) says

An electronic message of an ephemeral nature that is not designed to be retained or to create a permanent record, including, but not limited to, a text message or instant message format communication, is insufficient under this title to constitute a contract to convey real property, in the absence of a written confirmation that conforms to the requirements of subparagraph (B) of paragraph (3) of subdivision (b).

It's not obvious that text messages are "ephemeral", but the statute suggests that they are, and text messages are not legally binding as contracts in California, at least those subject to the requirement to be in writing.

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