Is my landlord's new lease legitimate? Can I scratch things out that aren't right?

Last month, I moved into a house with a coworker. It was ideal, rent is affordable, utilities included, pets allowed, no lease, no deposit, no landlord breathing down our necks.

Then, about a week after I moved in, the landlord shows up and asks me for rent and deposit (1st and last months’ rent). With no lease and the fact that a deposit has never been required (my roommate that moved in a couple weeks before didn’t have to pay one), I didn’t feel comfortable paying, so I didn’t. He never said anything about it, but dropped off leases out of the blue.

My coworker has lived here for 6 years and never had a lease, so I’m suspicious. The landlord really doesn’t seem to give a crap about getting the rent or fixing the place, from what I understand he never even came to get the rent through the whole summer.

Anyway, the lease is something he found on the internet and printed off, changed very slightly to include the house address and rent amount (no mention of deposit). There are a couple things that worry me, such as it says no pets on the lease (we all have pets) and it stresses that we’re responsible for damage to the house (each person responsible for damage made from date of move-in). The latter would be fine, except the house is not in good condition (which is what an absentee landlord should expect, I guess) and I had no part in the decline in quality.

When questioned about the pet thing, the landlord admitted he’d downloaded it and there were some mistakes, that we should “scratch out” the mistakes and sign it.

I just have a very shady feeling about all of this, not to mention my gut tells me you can’t just scratch things out in a legal document.

I’m looking for both some knowledge about the scratching-out thing, and also other people’s impressions about the situation. What should I do, and what would you do?