Seasonal Contracts: Debunking the 11-Month Myth

In the property rental world, there exists a widely held misconception known as the “11-month myth.” This belief suggests that signing a rental agreement for less than a year can circumvent the obligations set forth by the Urban Leasing Law (LAU). The reality, however, is far from this assumption. While some attempt to classify leases as either “residential” or “non-residential” by altering the contract duration, this tactic fails to bypass the mandatory rules of the LAU. Courts have consistently ruled that it is the purpose, not the length, of the lease that determines its classification. Thus, both landlords and tenants should carefully define their intentions in the agreement, steering clear of standard templates, and accurately reflecting their specific circumstances.

The Appeal of Short-Term Contracts

The primary reason behind the “11-month myth” is that the LAU establishes two distinct regimes for rental agreements. Residential leases come with a set of compulsory rules, including the tenant’s right to remain in the property for up to five years (or seven years if the landlord is a company). This is true even if the original contract is for less than five years. Landlords are obligated to renew the lease annually until the tenant has completed their full term unless they have a legitimate reason, like needing the property for personal use, which must be specified in the contract.

On the other hand, non-residential leases (such as seasonal or temporary ones) offer more flexibility, where the terms can be agreed freely between the parties without being subject to the LAU’s mandatory rules. Some landlords mistakenly believe that offering an 11-month lease avoids the obligation to extend the contract, but courts have repeatedly classified this as fraudulent if the property is being used as a primary residence.

Purpose Over Duration: Defining a Lease

The distinction between residential and seasonal leases is not based on the contract’s duration but rather on the intent behind the agreement. A seasonal lease is meant for temporary, non-residential use, such as holidays or short-term work placements. For instance, a residential lease could last six months, while a seasonal lease might run for two years. The key difference is that a seasonal lease is driven by a temporary need, not by a desire for permanent residence.

Several court rulings have highlighted that a contract framed as a seasonal lease but intended for habitual residence is fraudulent. To justify a seasonal lease, the contract must explicitly state the temporary reasons for the rental, such as a work-related relocation or a vacation. Using standard contracts or vague clauses is insufficient to establish a seasonal lease.

Changing Circumstances

A frequent question arises: What happens if the tenant’s circumstances change after signing the contract? For example, if a seasonal lease gradually transforms into a residential one, can the landlord still rely on the original terms? The courts have addressed this issue extensively. If the tenant changes their situation, such as registering their official residence at the property, it does not automatically alter the nature of the lease unless both parties agree to formally modify the contract.

On the contrary, if the tenant stops using the property as a primary residence and instead uses it sporadically, the contract could be reclassified as seasonal—again, provided both parties clearly express their intent to do so.

In Conclusion: A Caution for Landlords

Landlords should be cautious when drafting contracts that attempt to bypass the LAU’s requirements by limiting the contract duration. An 11-month contract does not exempt the landlord from complying with the law if the tenant is using the property as their primary residence. Tenants have the right to stay for five years (or seven years if the landlord is a company), even if the initial contract duration is shorter. A well-drafted seasonal lease must clearly outline the temporary nature of the rental and should not rely on standard clauses that do not reflect the real situation.

In any case, tenants should be aware of their rights and not feel pressured into signing contracts that contradict their intended use of the property. If the conditions of a lease are abusive or illegal, they can be declared null and void. Therefore, it is crucial for both parties to fully understand the implications of the contract they are entering into, to avoid costly and time-consuming legal disputes in the future.