Lease Agreement and Side Letters: What You Need to Know

Questioner

Is there such a thing as a 'side letter' to a rental agreement that contains different price agreements than those in the main contract? Is this a legal procedure and which contract takes precedence in the event of a conflict?

Lawyer

It is possible to include provisions in a contract, for example in the form of general terms and conditions. You then sign a 'main contract' in which explicit reference must be made to these conditions and you must also be explicitly informed that these conditions form an integral part of the contract. This is only done to make drawing up contracts easier. It is certainly not the intention to create ambiguity. The rule is that the contract you sign is valid. That is the agreement on which you have reached consensus with the other party. If there is no clear reference to a 'side letter' or something similar, then it is not part of the contract and therefore does not apply.

Questioner

Thanks for your answer. Perhaps I can be a bit more specific. If, in addition to an official 5-year lease with a rent of 3000 per month, a 'side letter' is drawn up in which another (lower) rent amount is discussed and a notice period of 2 years applies, is it wise to sign both contracts?

Lawyer

A contract should provide clarity about what has been agreed. So if that 'side letter' contains a further specification of the already signed contract, or replaces the current contract, then I think that is fine. If that 'side letter' applies alongside the contract and concerns the same rental property, then that is not advisable. This can lead to ambiguity about what exactly has been agreed.

Lawyer

Your side letter smells of fraud and that is why lawyers never recommend it. After all, the intention is that people do business with each other in a recognizable way and not to fragment agreements in various documents, for the outside world on the one hand and for intimates on the other.