What Is a Lease?

You have likely signed a lease at some point in your lifetime. If not, you likely will. This article answers some frequently asked questions about leases, what terms a lease should have, and things to watch out for in a lease.

While this article provides an overview, every real estate rental situation differs, every tenant’s circumstances differ, and the local and state laws surrounding leases and property rentals differ. Contact a local and experienced landlord-tenant lawyer for specific answers to your questions.

Lease Definition

A lease or rental agreement is a contract between a landlord and a tenant.  The landlord, or lessor, is the property owner, and the tenant, or lessee, is the person who wants to use the property. The contract gives the tenant the right to use and occupy the rental property for a specified time, usually a year. In return, the rental agreement requires the tenant to pay the landlord monthly rent. 

The lease also sets out the rights and obligations of the landlord-tenant relationship.

Terms That Should Be Included In A Written Lease

A written agreement should include all terms of the contract required under a lease and other specified terms that may be otherwise material or ambiguous unless put in writing. Commonly written leases include the following:

• Names of parties (including landlord, tenant, and other occupants)
• Duration of tenancy (month-to-month, one year, five-year, etc.)
• Terms of rent (amount, date due, method of payment, late fees, grace period)
• Terms of the security deposit
• Use of amenities (appliances, furniture, parking spaces, etc.)
• Terms of use of the property (business, residential, etc.)
• Assigning responsibility for paying utilities
• Terms of landlord repairs and maintenance
• Events that cause a default
• Events that warrant eviction
• Result of default of lease agreement
• Terms at the end of the lease
• Terms of possible future disputes (attorney’s fees, costs, mediation, etc.)
• Conditions landlord may enter the tenant’s rental property
• Methods for monthly payment
• Result of landlord death or sale of rental property
• Subletting rules and restrictions
• Other rules and regulations that apply to rental property (community rules, pets, quiet hours, other deposits, etc.)

Differences In A Commercial Lease Compared To A Residential Lease

Residential tenancies tend to be more regulated by state and local law than commercial rentals to ensure that residential rental property meets basic standards set by law regarding habitable living conditions and to fix certain rights and obligations of the parties.  Since housing is a fundamental need, the law sets forth such minimum standards.

On the other hand, commercial leases are for things like office space, retail stores, or storage/warehouse use.  Commercial leases are viewed as contracts between knowledgeable business people who have had the opportunity to negotiate the rental terms fully.  As such, in most commercial situations, the law provides that the lease terms govern the rights and obligations of the parties. 

Certain types of commercial leases are more regulated by law than others; however, this depends on the nature of the use intended for the lease and the particular business/industry.

Who Pays the Legal Fees If You Sue Your Landlord?

Usually, the lease will have a provision that states that the “prevailing” party in any lawsuit can collect reasonable attorney fees. Without this provision, each party pays their own attorney fees.

Getting Out Of Your Current Lease

If you are on a month-to-month lease, in most states, you must give the landlord 30 days notice to end your lease (usually, that notice will be given on the day you pay your next month’s rent). If you have a lease for more than a month-to-month duration (for example, a 6-month or 1-year lease), your lease may contain a provision for early termination. 

Sometimes, the terms of the lease will provide for early termination of a lease in certain situations, for example, if the landlord agrees in writing to an early termination or agrees to a sublease or assignment of the property.  If you don’t get prior permission or your lease doesn’t provide for early termination, then if you leave early, you will be “breaching” the lease contract by leaving early. 

When a tenant breaches a lease by leaving early without permission or failing to pay rent for the remaining months, the tenant may owe the landlord money for the remainder of the lease term or until the landlord can get another tenant.  A landlord may sue a tenant to recover any money owed for leaving early and breaching the lease.

However, suppose you like another place better than your current one because the landlord has failed to provide a habitable space or otherwise has materially defaulted on their obligations under your lease. In that case, you might be able to terminate the lease early, depending on your state’s laws.

Finally, always remember that a landlord may not discriminate against tenants based on other factors such as race, color, age, religion, national origin, gender, handicap, or familial status. Some states also extend these protections to marital status and sexual orientation. If you feel discriminated against when attempting to enter a lease agreement, it’s time to contact a lawyer. For tailored assistance in negotiating your lease, reviewing the terms of a lease, terminating your lease, or any other lease-related activity, contact a local and experienced landlord-tenant lawyer.