What Are Essential Terms for a Lease Agreement?

Whether you’re a landlord or a tenant, having a proper lease agreement for your rental unit is essential for protecting your rights. But not all rental agreements are created equal. In order for a lease to be effective, it should usually include a few essential terms and standard information to secure your legal rights.

A rental agreement for a residential property provides the terms for a person or persons to lease a property for the purpose of living in it. A residential lease should almost always include the following information.

The Rental Length of Time

Leases for residential property typically fall under one of three categories:

  • A tenancy for years, despite the name, can last for any specified unit of time, be it for a certain number of weeks, months, or years. These leases have a definite end date.
  • A periodic tenancy continues for a consecutive periods of time, such as going month-month. Usually, there is no specified end date, and either the landlord or the renter can decide to end the lease with the appropriate notice.
  • An at-will tenancy may not specify a period of time at all, but either party can end the lease at any time with appropriate notice.

A lease should always specify how long the rental will last, as well as terms for breaking the lease early or options for renewal. Most leases apply for a year with an option to renew at the end, or change to month-to-month. Rental agreements should be in writing to protect both parties and prove what they agreed to, but in some cases, you may be required to have a lease if it’s to last for a year or more.

What are the Costs?

Your rental agreement should also include details on payments, such as how much rent will be, when it needs to be paid, how it should be paid, and what the penalties are for not paying on time. Typically, if a landlord wants to charge a late fee for delayed rental payments, it needs to be specified in the lease. Security deposits and stipulations for paying last month’s rent up front should also be included.

The Renters and the Landlord

Your lease should state the names and addresses of the renters and the landlord. Other rules of occupancy, such as the number of people allowed to live there, how many guests can enter the property, and how long they’re allowed to stay, should all be included. All parties will need to sign the lease.

What About Pets?

Many properties have rules about pets in the rental, such as type of pet, the size of the pet, and how many pets the renters are allowed to have. If renters will need to pay an additional security deposit or monthly pet fee, that will need to be spelled out in the lease.

Who Covers the Utilities and Appliances?

The lease should clarify which utilities the landlord will cover. Some states require landlords to cover specific utilities, such as trash or water. The lease should also state which expenses will be the tenant’s responsibility. Information on appliances, such as air conditioning units or optional washer and dryer set ups, should be explained as well.

Rules for Entry and Repairs

Most of the time, landlords can’t enter a lessee’s rental unit without their permission and sufficient notice, which is typically 24 hours. The rental agreement should clarify when and how the landlord can enter the premises, and who will be responsible for repairs. Residential landlords are usually required to maintain the property and make repairs to the units and common areas.

What Additional Terms Should Be Considered?

Some additional terms that may be included in a lease include information on parking, prohibited items, general rule for use, requirements for renter’s insurance, and any information related to state laws that apply to renting property. Notices on asbestos removal or lead paint, for example, may be required.

You should also note the rules on subletting. In most places, a renter is allowed to sublet the property without the landlord’s permission unless the lease states otherwise.

It’s in your best interest to include documentation on the state of the rental unit before the lessee moves in, rules on altering the property – like if the renter can paint the walls or hang decorations with nails – and the consequences for damaging the rental. This will make it easier to settle any disputes around the security deposit when the lease is over.

What Should Be Included in a Commercial Lease?

Commercial leases are for rental properties that will be used to run a business. They usually last for a longer period of time and the renters are typically the ones responsible for repairs and maintenance.

Most of the above terms will also apply to a commercial lease, such as the length of time, rental payment information, and information on the occupants and the landlord. But commercial properties may have additional terms related to the company leasing it, such as what type of business is allowed to operate there.

Commercial renters should pay very close attention to the terms of their lease, as there are few protections that will apply to them beyond what’s written in the agreement. Residential leases, on the other hand, usually have additional protections on habitability that are required by law.

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This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified landlord tenant lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact an attorney in your area from our directory to discuss your specific legal situation.

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