A House Lease Agreement is a legally binding rental contract between a landlord (lessor) and a tenant (lessee) explicitly tailored for renting a house. It contains detailed information to ensure the tenant and landlord understand all of their contractual obligations.
Why Use a House Lease Agreement?
This agreement is geared specifically toward house rentals and often contains more personable information since the owner may also live in that property or may at a later date.
There are various rental situations in which you would want this type of agreement. Here are a few common situations:
- Standard house rentals. Any time you rent out a house, whether you own several investment properties or are renting your former home.
- Renting your home to family or friends. Even if someone is renting to a family member or friend, this agreement is necessary to protect the landlord, the tenant, and the relationship between both parties.
- Renting a room in your house while you live there. Just because you are only renting out a room in your house does not mean you should not have a House Lease Agreement.This type of agreement is still essential in this situation and can be tailored to the unique situation by outlining boundaries for the parties that will be sharing the house as their residence.
Reasons to have a House Lease Agreement
- Highlight Items Unique to House Rentals. Instead of using a standard lease agreement, a House Lease Agreement can provide specific details on items that are unique to renting a house as opposed to, for instance, an apartment. These specific items can include such things as maintaining the yard and use of the garage and driveways.
- Include all Relevant Clauses. A detailed agreement can be used to include as many clauses as are necessary to protect your house and financial interests. While some landlords may opt for an abbreviated agreement, you may not want to do so with a house you own. A House Lease Agreement ensures you leave nothing to chance when renting your house.
- Details and Instructions. A well thought out agreement will not only cover all the important areas but it allows you to provide specific details and instructions on those important topics such as security deposits and damages. This will reduce the chance of disputes between landlords and tenants.
- Protection. An agreement protects both the landlord and the tenant. This could be protection for the landlord when a tenant unexpectedly moves out or protection for a tenant if a property becomes uninhabitable.
- Expectations of Parties. The agreement can help ensure that both parties are clear on the expectations of the other party.
- Required by law. In some states, a written agreement is required by law.
Drawbacks of a House Lease Agreement
- Scaring away a Qualified Tenant. A standard House Lease Agreement can be long with some clauses that might make a potential tenant nervous. If you find yourself with a qualified yet hesitant tenant, you may want to consider using a simpler 1 Page Lease Agreement.
- Harder to Read and Understand. This type of agreement can be lengthy. A tenant may struggle to read through and understand all of the clauses in this agreement. If not clearly explained, confusion on these clauses may lead to disputes during the lease term.
- Less Efficient to Finalize. It may take longer to finalize if a tenant has questions or even disagrees over the use of any causes.
What to Include in a House Lease Agreement
Renting out a house is different from renting out other types of properties. You may have plans to live at this property or sell it shortly. Make sure your agreement protects you and your property. In addition, make sure it is tailored to your house and whatever requirements are important for maintaining the property in good condition.
Essential Terms and Conditions
The following terms and conditions must be included:
- Lease Terms. Specifically, whether it is a fixed lease or a month-to-month lease, and the start and end date for the lease term.
- Payments. Include all payments and potential fees you will be requiring from the tenant, how they should make those payments, and when they are due.
- Signatures. Without signatures from both the landlord and tenants, the agreement will have no legal effect.
Specific Items to Include in a House Lease Agreement
Here are the specific items you should include and a brief explanation of their purpose:
- Date. The date the agreement goes into effect and is being signed.
- Parties. This will include the landlord and all tenants that will be bound by the agreement. It is also recommended that you include the address for the landlord as well as the current address for the tenants.
- Occupants. If any occupants are not tenants (e.g., kids) you should list them in the House Lease Agreement as well.
- Purpose. This is a house. Make sure it is clear that the house will be used as a residential dwelling only.
- Premises. The full property address of the house should be included at the beginning of the agreement. You may also want to include the number of bedrooms and bathrooms. If you are sharing the premises with your tenant you will want to include which rooms the tenant will be renting and which are common areas.
- Furnishings. Include whether or not the house will come furnished. For any furnishings being provided, include a description of those items.
- Appliances. Indicate which, if any appliances, will be provided by the landlord.
- Lease Term. The agreement should indicate whether this is a fixed-term lease or a month-to-month lease. If a fixed-term lease, it should include the start and end date of the lease. If a month-to-month lease, it should include when the lease starts and the required notice for ending the lease. Many states require a certain amount of notice for terminating a month-to-month lease.
- Rent.Include the amount due each month, the date it’s due and the method tenants can use to pay their rent (e.g., check, online transfer, etc.). You can also include a request for the first and last month’s rent in advance.
- Other Payment Terms. If applicable, you should address other payment terms such as returned checks fees, prepayment, rent increases, and how to handle a prorated period.
- Late Rent. You should also include any details on what will occur for late rent payments. Just be aware of your state’s laws as it applies to the amount of a late fee you can charge and whether or not there is a required grace period. Click here for more information on handling issues with past-due rent.
- Security Deposit. A security deposit is a reimbursable deposit used to protect the landlord in case a tenant violates the lease or causes damage beyond normal wear and tear to your house. Include the amount required for the security deposit (usually equal to one month’s rent) as well as what items can be deducted from the security deposit. In this section, you should also include how the security deposit will be returned to the tenant. Click here for specific information on your state’s security deposit laws.
- Condition. It is a good idea to make sure you have a short clause that requires the tenant to acknowledge that they received the house in good condition.
- Assignment.Indicate whether or not you will allow the tenant to sublet (grant license to other individuals to use) your house or not.
- Right of Entry. There will likely come a time when a landlord will need to enter the house the tenant is renting. Make sure you have a clause that highlights the amount of notice you will provide tenants as well as the reasons you are allowed to enter the premises. Similar to late fees, the right of entry is subject to specific state laws.
- Alterations and Improvements. Specify under what circumstances alterations and improvements can be made by the tenant. Also, this section should discuss unauthorized alterations and improvements and who owns any alterations or improvements that have been made.
- Non-Delivery of Possession. Discusses the landlord’s obligation to turn over the house to the tenant at the beginning of the lease and the consequences if a landlord fails to do so.
- Hazardous Materials. Prohibition against tenants keeping certain dangerous materials in any portion of the house they are renting.
- Utilities. Landlords should list the utilities that they will provide and inform the tenant that they are responsible for setting up and paying all other utilities.
- Maintenance, Repair, and Rules. Provides who is responsible for the general maintenance and repair of the house as well as any rules that must be followed in making those repairs.
- Pets. This section should indicate whether or not pets are allowed, what kind of pets, how many, and if there will be a pet fee.
- Quiet Enjoyment. The landlord promises to ensure that the tenant will be able to peacefully enjoy the use of the landlord’s house.
- Indemnification. Tenant’s agreement to not hold the landlord liable for any damages the landlord did not directly cause.
- Default. The rights and consequences if either party violates the House Lease Agreement.
- Abandonment. The Landlord’s rights if the tenant abandons the house.
- Attorneys’ Fees. Tenant’s agreement to pay the landlord’s attorney fees if they violate the lease or other applicable laws, rules, or codes.
- Compliance with Law. Tenant’s agreement to comply with all laws.
- Severability. Any invalid provisions do not impact other valid provisions in the agreement.
- Binding Effect. The agreement is binding on not just the parties signing the agreement, but their heirs, successors, and legal representatives as well.
- Modification. No changes to the agreement may be made unless in writing and all parties to this agreement sign it.
- Notice. This section will include the addresses of the landlord and tenant to send each other notices.
- Parking. A House Lease Agreement will usually discuss the tenant’s use of the driveway and, in some cases, a garage.
- Early Termination. Whether or not the tenant has a right to terminate a lease early along with the required notice and any fee that may be charged for early termination.
- Smoking Policy. Whether smoking is prohibited or not and, if allowed, the specific locations smoking is allowed.
- Disputes. Both parties agree to negotiate any disputes before taking legal action.
- Retaliation. Prohibits the landlord from taking any retaliatory actions against the tenant.
- Equal Housing. The landlord must provide reasonable modifications to accommodate a tenant’s mental or physical impairment.
- Property Deemed Uninhabitable. Provides the tenant a right to terminate the lease if the property is uninhabitable. It also provides that tenants will be liable to the landlord for any damages and lost money that was the result of the tenant’s negligence.
- Lead-Based Paint Disclosures. Requirement for the landlord to provide a Lead-Based Paint Disclosure if any part of the house was constructed before 1978.
- Entire Agreement. The agreement and any attachments are the complete agreement. Any prior negotiations or understandings, written or oral, are null and void.
- Signatures. Signatures are required from the Landlord as well as all tenants that are part of the agreement. These signatures are what make the agreement officially binding.
Above were items you will see in virtually every House Lease Agreement. Here are some additional clauses you should consider including:
- Additional Terms Specific to Your House. Renting a house is a delicate situation. Make sure you highlight any specific aspects of your house that you want to address with the tenant. This could be anything from maintenance of the lawn to use of certain areas (e.g., garage).
- Governing Law. You may also want to specifically state that the laws of the state (and city, if applicable) govern the agreement.
- Option to Purchase. This clause is used in agreements in which parties agree to a payment structure in which the tenant can eventually own the property.
- Sale of House. If you are even contemplating selling your house, you may want to include a clause with details on what will happen and a tenant’s rights if the landlord/owner decides to sell the house.
- Agent/Manager. If you have someone else manage your house rental, include a clause with their contact information.
- Noise/Waste. This clause requires the tenant to agree to not commit waste or allow nuisances at the house. This clause will also require the tenant to agree to follow any local noise ordinances.
- Guests. Provides details on how long guests are allowed to stay at the house, both with and without the landlord’s written permission.
- Joint and Individual Liability. When there are multiple tenants, the tenants agree to be jointly and individually liable for the entire agreement. That is, you may be liable for another tenant’s violation of the House Lease Agreement.
- Waiver. A landlord’s waiver of one breach by a tenant does not mean they waive other breaches of the agreement.
- Guarantor. Some lease agreements will have what’s known as a guarantor. This is a person that will take care of any financial obligations if a tenant fails to pay their rent.
Additional Items to Include with the House Lease Agreement
Depending on the state your house is located, you may be required to provide additional disclosures and addendums. Besides the specific content above, here are some additional items you may need or want to include:
- Lead-Based Paint Disclosure
- Asbestos Disclosure
- Bed Bug Addendum
- Pet Addendum
- Carbon Monoxide and Smoke Detector Addendum
- Flood Zone Disclosure
- Mold Disclosure
- Shared Utilities Disclosure
- Move In Inspection Checklist
- Move Out Checklist
It’s a good idea to have a separate cover page listing the disclosures and addendums that are part of the agreement. This will help avoid confusion as to what additional documents are part of the agreement.
Final Things to Consider
- Understanding Key Terms.Lease agreements usually contain some legal terms and words that are unfamiliar. If you do not fully understand any legal terms or words, it is a good idea to have an attorney review the document and help you better understand the meaning of the various clauses in the agreement.
- Keep a Signed Copy. Both the landlord and all tenants should have a signed copy of the agreement.
Legal Information for House Lease Agreements
When preparing the agreement you will have certain sections that must be specific to your state’s laws. For these sections, it is important to know those laws to ensure your agreement is fully compliant.
Security Deposit Laws
The amount of security deposit a landlord can withhold is based on the state your property is located. Use the chart below for inputting specific information in your agreement regarding the tenant’s security deposit:
|State||Security Deposit Limit|
|Alabama||1 month’s rent|
|Alaska||2 months’ rent|
|Arizona||2 months’ rent|
|Arkansas||2 months’ rent only for rentals with landlords who have 6 units or more|
|California||2 months’ rent (unfurnished unit); 3 months’ rent (furnished unit)|
|Connecticut||2 months’ rent but for tenants 62 years of age or older, 1 month’s rent|
|Delaware||1 month’s rent only for leases with a term of 1 year or more; For month-to-month tenancies, no limit for the first year, but after that, the limit is one month’s rent|
|Florida||No statutory limit|
|Georgia||No statutory limit|
|Hawaii||1 month’s rent. Landlords may require an additional 1 month’s rent as a security deposit for tenants who keep a pet.|
|Idaho||No statutory limit|
|Illinois||No statutory limit|
|Indiana||No statutory limit|
|Iowa||Two months’ rent|
|Kansas||1 ½ months’ rent (furnished unit); 1 month’s rent(unfurnished unit)|
|Kentucky||No statutory limit|
|Louisiana||No statutory limit|
|Maine||2 month’s rent|
|Maryland||2 month’s rent|
|Massachusetts||1 month’s rent|
|Michigan||1 ½ months’ rent|
|Minnesota||No statutory limit|
|Mississippi||No statutory limit|
|Missouri||Two months’ rent|
|Montana||No statutory limit|
|Nebraska||1 month’s rent (no pets); 1 and 1/4 months’ rent (pets)|
|Nevada||3 months’ rent|
|New Hampshire||1 month’s rent or $100, whichever is greater|
|New Jersey||1 ½ months’ rent|
|New Mexico||1 month’s rent only for leases with a term of less than 1 year; no limit for longer leases|
|New York||1 month’s limit for units other than those subject to the City Rent and Rehabilitation Law or the Emergency Housing Rent Control Law.|
|North Carolina||1 and 1/2 months’ rent for month-to-month rental agreements; 2 months’ rent if a term is longer than 2 months; may add an additional “reasonable” non-refundable pet deposit.|
|North Dakota||1 month’s rent|
|Ohio||No statutory limit|
|Oklahoma||No statutory limit|
|Oregon||No statutory limit|
|Pennsylvania||2 months’ rent; 1 month’s rent for leases that are renewed beyond the first year|
|Rhode Island||1 month’s rent|
|South Carolina||No statutory limit|
|South Dakota||1 month’s rent|
|Tennessee||No statutory limit|
|Texas||No statutory limit|
|Utah||No statutory limit|
|Vermont||No statutory limit|
|Virginia||2 months’ rent|
|Washington||No statutory limit|
|Washington D.C.||One month’s rent|
|West Virginia||No statutory limit|
|Wisconsin||No statutory limit|
|Wyoming||No statutory limit|
In addition to the amount and time allowed for returning a security deposit, you want to make sure that the reasons you list in your agreement for withholding a security deposit are in agreement with your state’s laws. For more information, check out our detailed information on security deposit laws here.
Executing the Lease Terms
After all parties have reviewed the House Lease Agreement here is what’s next:
- Sign the Agreement. Depending on a tenant’s financial history, a landlord may require a cosigner for your lease. To strengthen the validity of the agreement, you may also want to have it signed in front of witnesses or even a notary.
- Keys. Now that the agreement has been signed it is time for the landlord to plan a time to hand over a set of keys to the tenant.
- Payments. The tenant must make sure that they provide the landlord their security deposit, 1st month’s rent, and any other payments listed in the agreement.
- Move-in Day. The final thing you want to do is make sure the tenant has a smooth move-in day. While much of this information should be in the House Lease Agreement make sure you are available to assist the tenant if they have any other questions or concerns.
Move In Inspection
Before the tenant moves in, you will also want to schedule a time to conduct a Move In Inspection with your tenant. In the following states it’s actually a requirement:
|Arizona||All New Tenancies|
|Georgia||Only if Collecting a Security Deposit|
|Hawaii||All New Tenancies|
|Kansas||All New Tenancies|
|Kentucky||Only if Collecting a Security Deposit|
|Maryland||All New Tenancies|
|Massachusetts||Only if Collecting a Security Deposit|
|Michigan||Only if Collecting a Security Deposit|
|Montana||Only if Collecting a Security Deposit|
|Nevada||All New Tenancies|
|North Dakota||All New Tenancies|
|Virginia||All New Tenancies|
|Washington||Only if Collecting a Security Deposit|
Using a Tenant Move In Checklist, this inspection should document the condition of the property before a tenant moves in. This inspection will ensure that the property is in good condition for the tenant and that the tenant has a clear understanding of the landlord’s expectations for the property when moving out.