If the landlord and the tenant are relatives or good friends, they can go this way. However, it is not the right way to do it.in There has to be valid documentation (legal) of the rental contract, no matter what. In case, you fail to stick to the rules and do not go for a legal rental agreement, both the parties might land in trouble, in case of any dispute. Always remember, it's better keeping things clear for avoiding any kind of property related differences in the future.