Indiana Residential Lease Agreement

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Have a residential space that you’re interested to lease out? Read further to learn more about residential lease agreements in Indiana, such as what disclosures are required and what else should be included.

What is a Residential Lease Agreement?

A residential lease agreement is a legally-binding document that defines the expectations of a landlord and tenant entering into a rental situation. This document is provided by the landlord and must be understood, completed, and signed by both parties prior to occupancy of the property in question.

Several points must be addressed in a residential lease agreement.  This critical document may also include sections that are specific to the property, or required by state or local law.  When drafting a residential lease agreement, a landlord must consider and incorporate all special circumstances that could arise during the rental term.  The landlord should also state the consequences of failing to adhere to the agreement to ensure clarity among all parties.

This guide includes a description of all required sections in a residential lease agreement.  Each section provides information that applies to lease agreements written specifically in Indiana.  Given the unique nature of rental properties, each section describes numerous circumstances for the landlord to consider as they tailor a lease agreement to their rental.  Prior to creating a residential lease, landlords should also research local laws that could affect the content of the agreement.

Lease Introduction and Identification of Involved Parties

     The lease introduction briefly states the names of the individuals entering into the agreement, the date that the agreement goes into effect and the specific location of the property to be rented.  Minimally, it should list the following pieces of information:

  1. The full legal names of the landlord and tenant(s)
  2. The date that the residential lease agreement is written, including the month, day and  year
  3. The rental property address, including the street address, city, state, zip code and county

Optionally, this section can provide a more detailed description of the features that are considered to be a part of the rental property.  Putting specific features in the lease introduction tells tenants which parts of the property they are able to use and protects the landlord’s property at lease termination.  The following features can be listed in the lease introduction at the landlord’s discretion, if they are applicable to the rental unit:

  1. Interior boundaries and specific rooms included in the lease for multi-family and roommate-style rental situations
  2. Included appliances, such as a stove, refrigerator, dishwasher, microwave, washer or dryer
  3. Balcony, patio or other outdoor space, if available.
  4. Garage access
  5. Driveway or parking allotment
  6. Basement as a private living space, communal living space or storage area
  7. Outdoor shed or additional storage areas
  8. Pool, if one is located on the premises
  9. Furnishings, such as tables, chairs, bedroom sets, outdoor furniture or other items
  10. Light fixtures and ceiling fans
  11. Heating and cooling units

Terms and Limits of Occupancy

The lease term is the agreed-upon length of time that the tenant may occupy a rental unit before either vacating the premises or renewing the residential lease agreement with the landlord.  One-year lease terms are common, although a lease term can last any length of time deemed appropriate by the landlord. Space to include the following information is needed when drafting the lease term section of a residential lease agreement:

  1. Start date of the lease
  2. End date of the lease
  3. Whether the agreement is a fixed-term or month-to-month lease
  4. Options for the landlord and tenant upon lease termination
  5. Potential consequences to the tenant for failing to vacate the unit if the lease is not renewed

Month-to-month lease agreements are appropriate in circumstances where the landlord and/or tenant desire a degree of flexibility in their arrangement.  In a month-to-month lease, the landlord or tenant may be required to provide as little as 30 days notice prior to termination.

The limits of occupancy define the maximum number of people that may reside in a rental unit.  Although the state of Indiana does not have a clear standard regarding limits of occupancy, local ordinances may exist to promote safety and prevent overcrowding.  A generally-accepted limit of occupancy is two people per bedroom, plus an additional tenant.

When setting limits of occupancy for a rental unit, the Fair Housing Act must be observed.  This federal law prohibits discrimination against potential renters by a landlord. It allows for exceptions to occupancy limits in certain situations, such as families with children.

Rent and Utilities in Indiana

Potential tenants often skip ahead to the section of the residential lease agreement that explains monthly rent, as this section contains telling information about whether the property in question is a good financial fit for the tenant.  This section should include the following critical items:

  1. Monthly rent amount
  2. Total rent amount for the lease term (optional)
  3. Instructions for remitting rent, including who is authorized to receive payment, the forms of payment accepted and where to deliver payment
  4. The due date of the first rent payment
  5. The due date of future rent payments (usually on the first day of the month)
  6. How rent is prorated if tenant does not take occupancy at the beginning of the month
  7. Grace period for late rent payments, if applicable
  8. Late fee amount if rent is received after the grace period
  9. Consequences for submitting a rent check with insufficient funds
  10. Consequences for nonpayment of rent
  11. Utilities or other costs included with monthly rent

Most landlords include some utilities in the monthly rent payment and hold the tenant responsible for the rest.  Separately-metered utilities are generally billed directly to the tenant, while utilities that are not metered separately are incorporated into the monthly rent.  Here is a list of utilities and services that should be addressed in the residential lease agreement:

  1. Water
  2. Gas
  3. Electricity
  4. Phone
  5. Cable television
  6. Internet
  7. Trash pickup
  8. Grounds maintenance/snow removal

Security Deposits and Additional Fees in Indiana

A security deposit is defined as a sum of money provided to the landlord by the tenant at the beginning of the residential lease agreement to be reserved for potential expenses throughout the lease term.  A security deposit gives the landlord a level of financial protection in the event that the tenant does significant damage to the property or breaches the lease agreement, leaving the landlord financially responsible.  Here are the legal basics regarding security deposits in Indiana:

  1.  A landlord can charge any amount deemed necessary to cover the security deposit in the state of Indiana; however, the unused portion of the deposit must be refundable to the tenant upon lease termination.
  2. In Indiana, a tenant can pay the security deposit via cash, check, money order, or a lien on their car.
  3. In Indiana, there are no regulations stating how or where the security deposit should be kept.
  4. A landlord may withhold the security deposit for failure to pay rent, excessive damage to the rental unit, to cover unpaid utility bills or to pay the final month’s rent (if agreed to mutually in the lease).
  5. The unused portion of the security deposit must be returned within 45 days of the tenant vacating the property.

The security deposit section of the residential lease agreement should include space to record the following:

  1.  Amount of security deposit
  2. Due date of security deposit
  3. When the unused portion of the security deposit will be returned to the tenant
  4. Any potential reasons for withholding all or part of the security deposit

Maintenance, Alterations, and Repairs of Premises in Indiana

Maintenance, alterations, and repairs are common sources of confusion and conflict among landlords and tenants; therefore, it is important that these responsibilities are clearly outlined in the residential lease agreement.  This section should state the procedure for accomplishing any maintenance, alterations, or repairs to the property as well as who is financially responsible for these tasks.

Maintenance refers to tasks performed to keep the rental property presentable and in liveable condition.  Maintenance tasks may be the sole responsibility of the landlord, or a joint responsibility between the landlord and tenant.  They are rarely the sole responsibility of the tenant. Maintenance tasks may include, but are not limited to, the following:

  • Lawn care, landscaping and snow removal
  • Preventative checks and calibrations on appliances
  • Cleaning the interior of the property (e.g., yearly steam cleaning of carpets, cleaning of interior corridors or stairwells)
  • Cleaning the exterior of the property (e.g., sweeping walkways, power-washing exterior surfaces)
  • Keeping smoke and carbon monoxide detectors in working order
  • Fixing slow or blocked drains

Alterations are defined as a change in the structure or appearance of the property.  Alterations to a property by the tenant, if permitted in accordance with the residential lease agreement, generally require the landlord’s permission.  Some examples of alterations to a property include:

  • Painting the interior or exterior
  • Adding new landscape
  • Installing a satellite dish
  • Installing a new light fixture or ceiling fan
  • Installing a new appliance
  • Displaying signs in public view

Repairs are performed to fix broken or non-working features in the rental unit.  Repairs can include the following:

  • Fixing broken or non-working appliances
  • Fixing malfunctioning smoke or carbon monoxide detectors
  • Fixing structural damage, such as unsafe stairs or broken windows
  • Fixing electrical issues

In the state of Indiana, landlords are mandated to keep rental units livable by the Implied Warranty of Habitability.  In short, this doctrine states that if a landlord fails to maintain safe and sanitary living conditions, the tenant has the right to take legal action.

Access to Property/Notice of Entry in Indiana

This section states the conditions in which a landlord may enter a rental property.  In the state of Indiana, a landlord may enter a rental property with reasonable notice given under the following circumstances:

  1. To perform needed or agreed-upon maintenance services, alterations, or repairs
  2. To show the unit to prospective tenants or buyers
  3. To show the unit to the property owners, if different than the landlord
  4. To allow contractors to view the property before, during, or after a maintenance, alteration, or repair.

Twenty-four hours is typically considered a reasonable amount of notice to give in the event that the landlord needs access to the rental unit.  Entry must be planned for a reasonable day and time, generally considered to be Monday through Friday during business hours.

In an emergency, the landlord may enter the unit without advanced notice.  If the unit has been abandoned or the landlord possesses a court order, tenant consent to enter the unit is not required.

When creating this section of the residential lease agreement, the landlord should take care to include the following information:

  1.  A list of common reasons that the landlord might be required to enter the rental property with reasonable notice and consent of the tenant
  2. A list of common reasons that the landlord might be required to enter the rental property without notice or consent of the tenant
  3. The amount of notice required prior to the landlord entering the rental property for an appropriate reason that is not considered an emergency
  4. The amount of notice that the landlord must provide if the tenant needs to leave their unit for an extended period of time due to maintenance, alteration, or repairs
  5. Whether financial compensation will be provided to the tenant if they need to vacate their unit due to maintenance, alterations, or repairs

Pet Addendums in Indiana

The state of Indiana does not have specific laws regulating a tenant’s pets in a rental situation.  Allowing pets on the premises is a decision made at the discretion of the landlord. When creating a written pet policy to include on the residential lease agreement, the landlord should specify the following:

  1.  The type of animals allowed on the premises
  2.  The breed of animals allowed and/or restricted
  3.  Weight restrictions on pets
  4. Limit on the number of pets allowed within the unit
  5. Cost and due date of a refundable pet deposit
  6. Cost of monthly non-refundable pet rent
  7. Whether a pet interview is required as a condition of allowing the pet on the premises
  8. Situations which may indicate that the pet should be permanently taken off of the premises

Since there are no limits on security deposit in Indiana, a landlord may charge any amount deemed appropriate for a pet deposit.  This deposit must be refundable and used only for damages incurred by the pet.

While a landlord has the right to prohibit pets on the premises, they are required to make exceptions in accordance with the federal Fair Housing Act.  A portion of the federal Fair Housing Act states that individuals who require a service animal may not be denied housing, regardless of the landlord’s current pet policy.

Whether it is a family pet or a service animal, any pet that is likely to cause significant property damage, be dangerous to others, or otherwise cause the tenant to breach the residential lease agreement may need to be removed from the property.

Legal Considerations in Indiana

The relationship between a landlord and tenant is governed by several state regulations in Indiana.  When writing a residential lease agreement, it is important that these state regulations are clearly addressed in the document.  Here are some common legal aspects to be specified in the creation of a residential lease agreement in Indiana:

  1.  Anti-discrimination laws:  In Indiana, a landlord can legally deny housing to a potential tenant based on bad credit ratings or poor references from previous landlords.  Landlords are prohibited from discriminating against protected categories within the federal Fair Housing Act. A landlord cannot deny housing to a potential tenant based on race, country of origin, religion, sex, familial status or disability.
  2. Fees for late rent payment:  If a landlord wants to impose a fee for late rent payments, this must be stated clearly in the residential lease agreement.  If it is not written in the agreement, state law may not support the collection of a late fee. The late fee must be considered reasonable and intended to reimburse the landlord for costs related to the late payment.
  3. Rent increase:  If a landlord decides to increase the monthly rent payment on a fixed-term lease, they must wait until the lease is due for renewal.  If a landlord wants to increase monthly rent on a month-to-month lease, Indiana law states that they must give a minimum of 30 days’ notice unless a different amount of time is specified in the lease.
  4. Eviction:  A landlord has the right to evict a tenant for violations of the lease agreement, including nonpayment of rent.  In Indiana, the landlord must provide 10 days notice prior to evicting a tenant from the property in question.

Required Disclosures in Indiana

In Indiana, the residential lease agreement must contain the following disclosures regarding the property to be rented:

  1.  Lead paint disclosure:  This disclosure is mandated federally, and must state all lead-based paint hazards known within the unit if the unit was constructed prior to 1978.  If the unit was built before 1978, the renter must be provided with a a designated informational pamphlet published by the Environmental Protection Agency describing how to minimize potential lead exposure.
  2. 100-year floodplain disclosure:  If the rental unit is determined to be positioned on a 100-year floodplain, this must be stated in the residential lease agreement.  A 100-year floodplain is defined as an area that has a minimum of a one percent chance of flooding in a given year.

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