A lease agreement is a contract between the landlord and the tenant. It defines the terms under which the tenant can use a certain property. On the other side, it provides the amount of rent the tenant should pay.
Although many people use the terms “rental agreement” and “lease agreement” as synonyms, they are different. Open Access Government points out that the key difference is in the length of the contractual obligation.
A lease agreement is more suitable for a yearly commitment. A rental agreement renews every month, and each side can change or terminate it.
In this article, we covered the basic differences, and we will help you find the exact type of lease agreement you need!
So, let’s get straight to it!
Lease Agreements By Type
When choosing the right type of lease agreement, ask yourself the following questions:
Type of Lease Agreements
Will you be a landlord or a tenant?
How long do you want to lease the property?
Do you want to be able to end the lease at any time?
Who will cover the costs of maintenance, insurance and taxes?
Depending on how you answered these questions, you might need a different type of lease agreement.
Residential Lease Agreement Forms [for Landlords]
Standard Lease Agreement
Are you planning to lease your property for a fixed period of one year or longer? So do most of the landlords. This is the most common type of lease agreement. It is suitable for a long-term property lease with fixed terms and a fixed duration of lease.
Month-to-month lease agreement
As we already mentioned, this type of agreement is also called a rental agreement.
Unlike the standard lease agreement, this type is more suitable for a short-term lease. Therefore, you can use it if you want to rent out your property for a period shorter than one year. Also, this agreement will enable you to change or terminate the lease agreement each month.
Vacation Lease Agreement
This type of agreement can also fit under the rental agreement category. But unlike month-to-month rental agreements, this type is best for vacation visits. Vacation visits are usually one-off visits, with guests staying no more than a few days. They often have more detailed provisions about the rental rules and restrictions.
Sublease Agreement Forms [for Tenants]
Sublease agreements are usually drafted in case the tenant wants to leave the property before the lease period is over. In that case, the tenant finds a third party that is willing to take over the property as a tenant. The contract that is then signed between the old and new tenants is the sublease agreement.
If you are a first tenant, ensure the lease agreement allows the sublease of the property. Most of the lease agreements would require at least approval from the landlord in the case of a sublease. So make sure you do your due diligence on that.
There is another difference you should be aware of before choosing the right sublease agreement form. That is the difference between the sublease and the sublet.
Sublease Agreement
In the case of a sublease, the new tenant replaces the old tenant as the contractual party. From that moment on, the old tenant has no responsibility for the property.
Sublet Agreement
In the case of a sublet, the old tenant remains responsible for the property owner until the main lease agreement is over. So there is a main lease agreement between the landlord and the old tenant and a sublease agreement between the old and new tenants. The new tenant will be responsible for the old tenant, while the old tenant will be responsible for the landlord.
Commercial / Other Lease Agreement Forms
Besides the residential lease agreements, there are many other forms of lease agreements, mostly categorized according to the type of property that is being leased and the purpose of the lease.
Commercial Lease Agreement
If you are leasing office space, you should have a commercial lease agreement. Lessors also use it for any other property rented out to businesses. It can be anything from a shop or a restaurant to an industrial complex. Compared to a residential lease agreement, it has fewer tenant protection clauses.
Land Lease Agreement
Most of the landowners choose this type of lease agreement. It is suitable for different kinds of land leases, depending on the purpose you will be using the land for.
Agricultural land leasing is the most common purpose. It is usually a long-term type of lease. Investopedia claims that these agreements are usually signed for a 50 to 99-year period.
Yet, long-term land leases are not always the case. Short-term land lease agreements are popular among mobile homeowners. However, the nature of their living habits makes leasing more suitable than buying the land. These agreements are a blend between a residential and a land rental agreement.
Rent-To-Own Lease Agreement
The main feature of this type of agreement is that it enables the tenant to buy the property after the lease is over. The tenant can then buy the property without paying the full amount up front.
On the other side, the landlord is often in the position of a creditor. Usually, it is benefits landlords offer to tenants, depending on the situation on the market.
Lease Agreements by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
How to Fill Out a Lease / Rental Agreement (Step-by-Step)
If you choose to download the lease agreement template, you will still have to fill out the details about the contractual parties, the leased property, and other details specific to your lease agreement. Follow this simple step-by-step guide, to make sure you don’t miss any of the sections.
#1. Name the Parties
One of the essential terms in the lease agreement is to name the parties.
Under the “Landlord” section, enter their full name and address. If the landlord is a company, enter their business name and address.
After that, enter the same details in the “Tenant” section.
#2. Describe the Property
After defining who is leasing the property to whom, it is necessary to determine the object of the lease. Then, define that under the section “Premises” and enter the address and type of the property.
#3. Define the Lease Duration
You can define the lease duration as the period of time from the moment of signing the lease agreement (e.g., one year). Another way is to enter the exact start and end dates of the lease (e.g., from the 1st of January until the 31st of December).
Another option is to rent the property on a month-to-month basis. In this case, you will only enter the start date of the lease.
#4. Enter the Rent Amount
This clause is one of the most important elements of the lease agreement. It is about the rental amount and the due date of the payment. Remember to include the form of payment and to define if the rent amount includes utilities.
#5. Enter the amount of the Security Deposit
This provision will protect the landlord in case the property gets damaged. Besides the deposit amount, you should also define what kind of damage allows the landlord to keep the deposit. Lastly, define when the deposit is returned if there is no damage done to the property.
Remember to pay attention to the state-specific regulations since each state defines the deposit amount, how the landlord can use the deposit, where to save it, and when to return it.
#6. Provide a Late Fee and Utilities Policy.
In the “Utilities” section, you can define if the tenant has to pay any additional fees for the late rent payment. Determine the day of the month after which the tenant has to pay the late fee. Also, indicate if the late fee will be a fixed amount or a percentage of the rent amount.
It is also necessary to list all the utilities that must be covered during the lease period. Apart from that, specify which utilities are covered by the landlord and which ones by the tenant.
#7. Define Landlords and Tenants Rights and Duties
This section should include all the other clauses regulating landlord-tenant relationships. It contains house rules, property maintenance rules, etc. The parties can enter any provision they consider necessary for the particular lease.
Here you can also define the rules for the repairs. For example, define what kinds of repairs are the responsibility of the tenant and which ones are the responsibility of the landlord.
Most rental lease agreements also include a military clause. This means the tenant can end the lease early if they are called up to serve in the U.S. military.
Another optional clause is about smoking and pets. The landlord can specify if pets or smoking are allowed or prohibited at the property.
#8. Provide Subletting and Subleasing Option
Here, you can specify whether the tenant can sublet or sublease a portion of the property or the entire property. If you allow the sublet or sublease, ensure that the landlord's written consent is required.
#9. Provide the Lease Termination Clauses
In this section, we should define the circumstances under which the parties can end the lease. Usually, the parties define a list of reasons for the lease termination. Others provide that they can end the lease without any reason as long as they send a notice in advance. In that case, they only define how far in advance they should send the notice to the other party.
#10. Provide the Governing Law and Dispute Settlement Clauses
Parties will refer to this section only in case something goes wrong. Still, it is better to be safe than sorry.
Here, you want to figure out the best way to settle a possible dispute, such as through arbitration or court. Also, by determining the governing law, parties will know which law will regulate the matters that are not covered by the lease agreement.
#11. Provide Miscellaneous Clauses if Needed
Here you can enter any provisions or clauses that aren’t provided in the lease agreement template.
How to Lease a Residential Property [Step by Step]
Here you will find all the steps you need to take before the lease even starts, as well as the steps that need to be taken after the lease is over
Step #1. Show the Property to Potential Tenants
Showing the property to potential tenants is almost always the first step before leasing it. A property owner is usually the one showing the property to potential tenants. This step can often be very time-consuming for property owners, so many hire an agent or a property manager.
Step #2. Start the Application Process With the Shortlisted Tenant
Once the price negotiations between the landlord and tenant are over, step two begins. The tenant then starts the application process by filling out the rental application form. In the form, tenants will fill out the necessary information:
Necessary Information
Name and Address
Employment details and current income
References from the previous landlords
These details will help the landlord determine if the potential tenant is suitable. For example, the tenant will usually have to pay a certain fee for the application's processing.
Step #3. Sign the Lease Agreement
Once you've made sure the tenant is suitable, it’s time to sign the lease agreement. Ensure your lease agreement has all the important clauses listed in the last section. It’s always good to go through all the terms with your tenant. This way, you will make sure both parties understand their rights and duties.
Step #4. Do a Rental Inspection With the Tenant
This step is usually done before the tenant moves into the property. Here, you will physically check the property to make sure everything is working, clean, and in good shape.
If everything is in order, you may sign the handover report with the tenant. The report will have a short description of the property and a list of the items in it.
Step #5. Collect the Rent and Deposit
After doing all the paperwork, it’s time to complete the process by giving the keys to the tenant and collecting the first month's rent and deposit. Some landlords will have only one general deposit that will serve as general security. Others might have a special deposit for utilities and a pet deposit, if applicable.
Step #6. Manage the Leased Property
As a landlord, you will have to::
Landlord Duties
Collect the rent
Pay property taxes
Pay utilities, if applicable
Do small repairs
Clean the property, if applicable (usually done by a third party)
Be available for the tenant in case of any problem or emergency
It seems like a lot, right? You may choose to take care of it on your own or hire a property manager.
Common Lease Agreement Disclosures and Addendums
Every lease agreement is different, taking into account the characteristics of each property and different state laws. Therefore, you will need to include additional disclosures and addenda to cover all the possibilities during the lease.
Below you can find the most commonly used addenda and disclosures and download them as an MS Word or PDF file.
Disclosures & Addendums
Asbestos Disclosure. This disclosure is mandatory if the property was built before 1981. It notifies the tenant that asbestos is present in the property structure.
Disclosure of Lead-Based Hazards. This disclosure is a must for a property built before 1978. It contains information about any lead-based paint, chips, or dust that presents a health hazard.
Bed Bug Addendum. It regulates the rights and duties of each contractual party in case of a bed bug infestation at the leased property.
Carbon Monoxide and Smoke Detector Addendum. It provides extra information about the existence of carbon monoxide and/or smoke detectors at the property. It also instructs the tenant on using and maintaining the mentioned detectors.
Death in Rental Unit Disclosure. Some state laws oblige the landlord to inform the tenant if anyone has previously died in the leased property.
Flood Hazard Area Disclosure. It provides information if the property is located in an area that is under a flood hazard.
Foreclosure Notice. This disclosure notifies the tenant that the lease agreement will terminate on a specific date. It also has information about the day before which the tenant must leave the premises and when to settle the due rent.
Illegal Substance Contamination Disclosure. This section informs the tenant if there was a presence of an illegal substance on the property (e.g., methamphetamine)
Mold Disclosure. As required by certain states’ law, it notifies the tenant if there was or could be a presence of mold at the property. It might also provide the obligation for the landlord to remove the mold from the property.
Notice of Abandoned Personal Property. This notice informs the tenant that they have left the personal property after moving out. It gives them the deadline to reclaim it, after which the landlord may dispose of it.
Pet Addendum. It provides additional rules in case the tenant keeps pets at the leased property.
Shared Utilities Disclosure. This disclosure is necessary only if there are multiple residents sharing the same gas or electricity meter. In that case, it will provide details on how residents share these utility bills.
The Smoking Lease Addendum. Landlord provides it if they wish to allow or prohibit smoking in the leased property.
Landlord and Tenant Laws by State
Federal law provides the most general rules about tenants' and landlords' rights and responsibilities. However, every state has specific laws regulating property leases. In the table below, you can find the detailed rules that apply in your state.
Advance Notice Requirements By State
Most states require the landlord to notify the tenant before visiting the leased property. This kind of regulation protects tenants' rights to privacy and defines when the landlord can visit the property.
When it comes to how many days in advance the landlord must send the notice before accessing the property, the rules are different in every state. See the table below to find out what rules apply in your state:
State | Advance Notice | Law |
---|---|---|
Requirement | ||
Alabama | 2 days | |
Alaska | 24 hours | |
Arizona | 2 days | |
Arkansas | Not required | N/A |
California | 2 days for rental inspection before moving out 1 day in general | |
Colorado | Not required | N/A |
Connecticut | Reasonable written or oral notice | |
Delaware | 48 hours | |
Florida | 24 hours | |
Georgia | Not required | N/A |
Hawaii | 2 days | |
Idaho | Not required | N/A |
Illinois | Not required | N/A |
Indiana | Reasonable written or oral notice | |
Iowa | 1 day | |
Kansas | Reasonable written or oral notice | |
Kentucky | 2 days | |
Louisiana | Not required | N/A |
Maine | 1 day | |
Maryland | Not required | N/A |
Massachusetts | Reasonable written or oral notice | |
Michigan | Not required | N/A |
Minnesota | Reasonable written or oral notice | |
Mississippi | Not required | N/A |
Missouri | Not required | N/A |
Montana | 1 day | |
Nebraska | 1 day | |
Nevada | 1 day | |
New Hampshire | Reasonable written or oral notice | |
New Jersey | 1 day | |
New Mexico | 1 day | |
New York | Not required | N/A |
North Carolina | Not required | N/A |
North Dakota | Reasonable written or oral notice | |
Ohio | 1 day | |
Oklahoma | 1 day | |
Oregon | 1 day | |
Pennsylvania | Not required | N/A |
Rhode Island | 2 days | |
South Carolina | 1 day | |
South Dakota | 1 day | |
Tennessee | 1 day | |
Texas | Not required | N/A |
Utah | 1 day | |
Vermont | 2 days | |
Virginia | 1 day | |
Washington | - 2 days with written or verbal notice - 1 day for the intent to show the unit | |
West Virginia | Not required | N/A |
Wisconsin | "...advance notice and at reasonable times" | |
Wyoming | Not required | N/A |
Security Deposit Laws
Most of the state laws will regulate security deposits in terms of:
The maximal amount of money that could be taken as a security deposit
Providing that the landlord must keep the security deposit in a separate account
Cases in which a landlord can use a security deposit
Deadlines for returning the security deposit after the lease
On the other hand, landlords can use a security deposit for covering:
The costs of tenants default on rent
The unpaid utilities bills
The cost of any missing items in the property
The costs of repairing for the damage that is not resulting from normal wear and tear
Regulations about the maximum amount of the security deposit and the deadline for returning it to the tenant are very different from state to state. Check the table below to see what rules apply in your state:
State | Maximum deposit | Separate account for keeping the deposit | Deadline for returning the deposit | Regulations |
---|---|---|---|---|
AL | 1 months’ rent | Not required | 60 days | |
AK | 2 months' rent, unless monthly rent is greater than $2000 | An escrow account is required | - 14 days - 30 days if the tenant failed to provide proper notice | |
AZ | 1.5 months’ rent, unless the tenant agrees to pay more | Not required | 14 days | |
AR | 2 months' rent unless the landlord owns fewer than 6 rental units | Not required | 60 days | |
CA | 2 months rent for unfurnished property and 3 for furnished | Not required | 21 days | |
CO | Not regulated | Not required | One month, unless otherwise provided in the lease agreement, with the maximal cap od 60 days | |
CT | - 2 months' rent if tenant is below 62 years old - 1 months’ rent if tenant is above 62 years old | Interest-bearing account required | -30 days -15 days from the moment the tenant provides the forwarding address | |
DE | 1 months’ rent for 1-year lease (if property is unfurnished) | An escrow account is required | 20 days | |
FL | Not regulated | Landlord can choose between the interest-bearing or non interest-bearing escrow account | 15 days or 30 days if any amount is retained | |
GA | Not regulated | An escrow account is required unless the landlord owns fewer than 11 rental units or the property is managed by a third party | 30 days | |
HI | 1 month’s rent | Not required | 14 days | |
ID | Not regulated | Not required | - 21 days unless otherwise stated in the lease with a 30 day maximum cap | |
IL | Not regulated | Not required | 45 days | |
IN | Not regulated | Not required | - 21 days unless otherwise stated in the lease with a 30 day maximum cap | |
IA | 2 months’ rent | A federally insured account is required | 30 days | |
KS | 1 months rent for unfurnished property and 1.5 for furnished | Not required | 30 days | |
KY | Not regulated | An escrow account is required | 30 days | |
LA | Not regulated | Not required | 30 days | |
ME | 2 months’ rent | Not required | 30 days | |
MD | 2 months’ rent | An escrow account is required | 45 days | |
MA | 1 months’ rent | An interest-bearing escrow account is required | 30 days | |
MI | 1.5 months’ rent | Not required | 30 days | |
MN | Not regulated | Not required | 21 days | |
MS | Not regulated | Not required | 45 days | |
MO | 2 months’ rent | Not required | 30 days | |
MT | Not regulated | Not required | -10 days -30 days if any amount is retained | |
NE | 1 months’ rent | Not required | 14 days | |
NV | 3 months’ rent | Not required | 30 days | |
NH | 1 months’ rent or $100 (whichever is greater) | Not required | 30 days | |
NJ | 1.5 months’ rent | Not required | 30 days | |
NM | -1 months’ rent for leases shorter than one year -No limit for leases longer than a year | Not required | 30 days | |
NY | Not regulated | Not required | 14 days | |
NC | - 2 weeks' rent for week-to-week lease - 1.5 months' rent for month-to-month lease - 2 months' rent for yearly leases | A trust account or bank bond is required | -30 days -60 days if the damage is higher than the one months’ rent | |
ND | 1 months’ rent | An escrow account is required | 30 days | |
OH | Not regulated | Not required | 30 days | |
OK | Not regulated | A federally insured escrow account is required | 30 days | |
OR | Not regulated | Not required | 31 days | |
PA | 2 months’ rent | An escrow account is required for deposits above $100 or any amount held for longer than 2 years | 30 days | |
RI | 1 months’ rent | Not required | 20 days | |
SC | Not regulated | Not required | 30 days | |
SD | 1 months’ rent | Not required | 14 days | |
TN | Not regulated | An escrow account is required | 30 days | |
TX | Not regulated | Not required | 30 days | |
UT | Not regulated | Not required | 30 days | |
VT | Not regulated | Not required | 14 days | |
VA | 2 months’ rent | Not required | 45 days | |
WA | Not regulated | An escrow account is required | 21 days | |
WV | Not regulated | Not required | 60 days | |
WI | Not regulated | Not required | 21 days | |
WY | Not regulated | Not required | -30 days -60 days if any amount is retained |
Eviction Laws By State
Most state laws protect the tenant in the event of an eviction. Protection is usually provided if:
Eviction Laws & Protection
The tenant is late with the rent, the tenant must wait a certain number of days before sending a notice to the tenant.
There is a period of time that must pass between the date the tenant received the notice and the date after which the landlord can file for eviction.
Each state provides different deadlines for notice and eviction. In the table below, you can find which deadlines, if any, apply in your state:
State | Period from late payment until the landlord can send the notice to the tenant | Period from receiving the notice until the landlord can file for eviction | Law |
Alabama |
| 7 business days | |
Alaska |
| 7 days | |
Arizona |
| 5 days | |
Arkansas | 5 days | 3 days if landlord is filing a civil eviction ("unlawful detainer"); 10 days if landlord is filing a criminal eviction ("failure to vacate") | Ark. Stat. §§ 18-16-101, |
California |
| 3 days, excluding weekends and judicial holidays | |
Colorado | 7 days | -10 days -5 days for single-family houses being rented under an "exempt residential agreement" | Colo. Rev. Stat. §§ 38-12-105, §§ 13-40-104(1)(d), (5)(b) |
Connecticut | 9 days | 3 days | |
Delaware | 5 days If the late charge is allowed by the rental agreement, but the landlord does not have an office in the same country where property is located, the due date for the rent will be extended for 3 days | 5 days | |
Florida |
| 3 days, excluding Saturdays, Sundays, and legal holidays | |
Georgia |
| A landlord can file for eviction as soon as the rent payment is due. The tenant then has 7 days to pay the rent and avoid eviction | Ga. Code Ann. §§ 44-7-50, 44-7-52 |
Hawaii |
| 5 business days | |
Idaho |
| 3 days | |
Illinois |
| 5 days | |
Indiana |
| 10 days | |
Iowa |
| 3 days | |
Kansas |
| 2 days If the notice is sent by mail 2 days will be added from the day of mailing | |
Kentucky |
| 7 days | |
Louisiana |
| 5 days | |
Maine | 7 days | 7 days | |
Maryland |
| 10 days | |
Massachusetts | 14 days, unless otherwise specified in the agreement | Reasonable time | |
Michigan |
| 7 days | |
Minnesota |
| 14 days for tenancy at will 30 days for a lease longer than 20 years | |
Mississippi |
| 3 days | |
Missouri |
| A landlord can terminate the lease with an unconditional quit notice. | |
Montana |
| 3 days | |
Nebraska |
| 7 days | |
Nevada |
| 7 days | |
New Hampshire |
| 7 days | |
New Jersey |
| A landlord can terminate the lease with an unconditional quit notice. | N.J. Stat. Ann. §§ 2A:18-53, 2A:18-61.1, 2A:18-61.2, 2A:42-9 |
New Mexico |
| 3 days | |
New York | 5 days A landlord must send a written notice via certified mail | 14 days | N.Y. Real Prop. Law § 235-e(d); N.Y. Real Prop. Acts. Law § 711(2) |
North Carolina |
| 10 days | |
North Dakota |
| 3 days | |
Ohio |
| A landlord can terminate the lease with an unconditional quit notice. | |
Oklahoma |
| 5 days | |
Oregon | 8 or 5 days | 72 or 144 hours | |
Pennsylvania |
| 10 days | |
Rhode Island | 15 days | 5 days If tenants have paid rent before the lawsuit is commenced, they can stay in the property Tenants can stay if they pay rent before the eviction hearing in case they haven’t received the "pay or quit" notice in the past 6 months | |
South Carolina |
| 5 days If there is a clause in the agreement that the landlord can file for eviction if the tenant is 5 days late for the rent payment, he can do so without giving notice. If there is no such clause, the landlord must give 5 day notice before filing for eviction | |
South Dakota | 3 days | 3 days. The landlord can terminate the lease with an unconditional quit notice | |
Tennessee |
| 14 days | Tenn. Code Ann. § 66-28-505 (in counties with a population bigger than 75,000 by the 2010 census); Tenn. Code Ann. § 66-7-109 (in counties with a population of less than 75,000) |
Texas |
| 3 days unless lease agreement specifies the other deadline | |
Utah |
| 3 business days | |
Vermont |
| 14 days | |
Virginia |
| 5 days An eviction lawsuit will be dismissed if the tenant pays the due rent with all interests and fees within 10 days from the moment of filing for eviction. The tenant will not be evicted if he pays the due rent with all interests and fees 2 days before the eviction | |
Washington |
| 14 days | |
West Virginia |
| Landlord can file for eviction without prior notice, and possibility to cure | |
Wisconsin |
| In case of month-to-month lease it is 5 days, or 14 days for the unconditional quit notice For a lease shorter than one year or a year-to-year lease, it is 5 days, without the possibility for unconditional quit notice For a lease that is longer than one year the notice must be 30 days, without the possibility for unconditional quit notice | |
Wyoming | 3 days | 3 day unconditional quit notice |
Rental/Lease Agreement Glossary
Lease agreements can be pretty confusing sometimes.
In the list below, you can find some of the most commonly used terminology that will help you better understand your property lease agreement.
Glossary & Terminology
Access. The right of a landlord or tenant to enter the leased facility.
Alterations. Any changes made to a leased property.
Assignment. When a tenant transfers all of their interests from a lease agreement
As-Is Condition. The tenant is accepting the leased property in the seen condition before signing the lease agreement, with all defects.
Attorn. When a tenant accepts the new owner of the property as the new landlord.
Base rent. A fixed amount of the minimal rent that can be increased by certain provisions that affect the rent amount.
Building code. A set of laws usually set on a municipal level that regulate how real estate in a certain area can be used and affects the design of the real estate.
Condemnation. A situation in which the government confiscates property for a public interest, like infrastructural projects (highways, railways, bridges, etc.).
Common Area Maintenance. Additional fee added up to the base rent. It is paid to cover the costs of maintaining the areas that all residents of a shared property are using and benefiting from. It usually includes cleaning, snow removal, outdoor lighting, parking lot maintenance, etc.
Covenant. A written promise or agreement to do or not to do a particular action.
Default. A party fails to fulfill its obligation, for example when tenant fails to pay the rent or makes some other violation of the lease agreement
Distraint. The action of seizing personal property from the tenant for failing to timely pay the rent.
Guarantor / Co-Signer. A person that is taking the obligation to pay the rent if the tenant is not able to do so.
Joint liability. When more people are sharing the responsibility for any damages made to the property, no matter which one of them made the damage.
Late rent fee. An additional fee is charged in case the tenant doesn’t pay the rent on time.
Option to purchase. A clause in the lease agreement that gives the tenant the option to buy the leased property.
Pet policy. Set of rules allowing or prohibiting pets at the leased property or defining rules for keeping pets at the property.
Renewal. When a tenant has the option to renew the lease agreement after the previous one is over.
Renter’s insurance. The insurance that usually covers the cost in case tenants’ personal property gets damaged.
Severability. A clause in the lease agreement stating that if one clause of the agreement is invalid or null, the other valid clauses will stay in power.
Sublet. An agreement between the old and new tenant, where the new tenant leases part or the whole property from the old tenant.
Tenant at will. A tenant leasing the property without the specified duration of the lease.
Lease Agreement Frequently Asked Questions
A lease is an agreement between the landlord or lessor (the person renting out the property) and the tenant or lessee (the person renting the property). This kind of agreement is usually made in written form as a legally binding contract.
According to Forbes, every lease agreement should include:
Information about the landlord and the tenant
Information about the occupancy limit
Duration of the lease
Rent amount and dynamics of paying it
Information about deposits and fees
Rules about maintenance and repairs
Rules about landlord’s right to access the property
Rules about illegal activities and pets
The lease agreement provides protection to both the landlord and the tenant. It sets out rules under which the tenant can use the property and secures their right to live at the property without disturbances. And, after all, most states require such an agreement.
Having a lease agreement is also beneficial because, with one, the landlord:
Can legally claim the rent before the court
Can file for eviction in case the tenant is not paying the rent
Will not be liable if some illegal activities are conducted at the property
Can legally claim compensation for any damages made to the property
Will not be penalized for unpaid utilities
The main difference is in the period of commitment.
With a lease agreement, the parties take on the obligation to lease the property for a fixed period of time, usually a year or longer. This is more suitable for long-term leases since it gives stability to both the tenant and the landlord.
A rental agreement does not have a fixed duration for the property lease. Therefore, it is more suitable for a short-term property lease or if the parties want flexibility.
If you are renting a room on your property, it is important to have a lease agreement in which you specify which part of the property is the subject of the lease.
If you are a tenant at the property and you want to rent a room to another tenant, the best way to do it is to sign a sublet agreement.
With a room rental agreement, you can:
Secure the rent is paid on time.
Set house rules regulating guest visits, smoking, and pet policy.
Set how the utilities will be divided.
Set rules for using the common areas and appliances.