Residential Lease Agreement

A standard residential lease agreement (or “rental agreement”) is a written document between a landlord and tenant that formalizes an agreement to rent real property for a fee. The contract must include specific details such as the monthly rent and the responsibilities of each party.

Residential Lease Agreements by State

Types of Lease Agreements

A lease is a legally binding agreement between the landlord and tenant. The agreement allows a tenant to use the property in exchange for a rent payment.

1. 1. Standard/Fixed Term – The most common lease agreement is a fixed term agreement, typically payment is due every month, and the lease term is generally one year or a fixed lease period.
   2. Month-to-Month – An agreement which typically lasts for 30 days and usually involves an automatic lease renewal. The lease will continue until a tenant or landlord provide a notice to end the tenancy.
   3. One Page (Simple) – A simple, one-page agreement between the landlord and tenant for a fixed term.
   4. Sublease– This agreement can be constructed in two ways: a tenant who wants to end their lease early, but the landlord denies the early termination and instead decides to rent to a subtenant until the expiration of the lease; or a tenant who wants to remain in the dwelling unit while renting a room to a subtenant.
   5. Roommate– This agreement is designed for tenants who live in the same dwelling unit and share common areas. This type of agreement can be constructed in two ways: among roommates; or among roommates and the landlord.
   6. Commercial – A lease that is used for commercial business property (e.g., retail, office space, or industrial use).
   7. Short-Term (Vacation) – A short term tenancy that typically lasts a few days.
   8. Land Lease – A lease which can be used to purchase home and land.
   9. Rent to Own – An agreement where the tenant has the option of purchasing the dwelling unit. Typically, the lease includes both rent payments and additional payments for a down payment on the home.

Lease Agreement Basics

A lease outlines a plan of tenancy and defines the rights and responsibilities of both the landlord and tenant.

What is the difference between a lease and a rental agreement?

The biggest reason between a lease agreement and a rental agreement is the length of the contract.

• Rental Agreement – secures a tenancy for a short period of time, typically a month or a 30-day period. Month-to-month rental agreements typically renew each month unless the landlord or tenant provides a notice to terminate the tenancy. Landlords have the authority to revise the rental agreement and may choose to increase rent, change the terms of tenancy, or terminate the agreement on short notice.
• Lease Agreement – secures a tenancy for a longer period of time, generally a year. During that time, the landlord is unable to raise the rent or change the terms of the tenancy unless the lease agreement allows for modifications, or the tenant agrees to the changes in writing. Landlords in high vacancy areas often prefer leases due to the income stability and low turnover costs.

Can a tenant rent without a lease agreement?

Depending on the state, a written lease may be required to make disclosures or impose duties relating to tenancies. Oral lease agreements may satisfy some state or local laws but with no clear written agreement, a potential tenancy conflict may arise. It is important to note that without a written agreement, landlords run the risk of not being able to collect or use a security deposit for unpaid rent or property damage.

Can you write your own lease agreement?

You can write your own lease, but to increase landlord-tenant protection, use a lease agreement template or contact an attorney for legal advice. This way, landlords can ensure that the lease is legally compliant and protects your rights as a landlord.

Typical Lease Agreement Provisions

A lease agreement or rental agreement outlines the basic rules and terms that both the landlord and tenant agree to. Below are examples of important information that should be included in every lease or rental agreement.

• Names of Tenants/Landlords – The agreement should state the names of the tenants, landlord, or any individual authorized to speak on behalf of or accept payments for the property. Some states require a landlord to disclose the contact information of anyone authorized to speak on behalf of or accept payments for the property to the tenant(s).
• Resident Contact Information – Knowing how to effectively communicate between a tenant and landlord can save a lot of hassle. Outline how both the tenant and landlord want to be contacted (e.g., text, phone, written notice, etc.).
• Limits on Occupation – Having this outlined in the agreement guarantees a landlord’s right to determine who should be occupying the dwelling unit. If a person’s name is not on the agreement, it could potentially be grounds for eviction.
• Type of Tenancy – The agreement should clearly state what type of tenancy arrangement a landlord will have with the tenant (e.g., month-to-month, fixed term, etc.). Include the start date, tenancy length and expiration date (if there is one).
• Payment of Rent – Details of how the rent should be paid (i.e., mailing a check, paying online, etc.), acceptable payment methods, the amount of rent owed, the date the rent is due (i.e., the first of every month) should all be explained in the agreement. If a landlord is charging a late fee or charging for a bounced check, this should be outlined in the lease or rental agreement.
• Deposits and Fees – To avoid any confusion or conflict, it is recommended to describe how the security deposit will be used (i.e., damages), the amount of the security deposit being collected, how the security deposit will be returned and depending on state laws, where the security deposit will be held and if any interested will be paid to the tenant. Any non-refundable fees should be clearly stated such as a pet deposit or cleaning fee.
• Repairs and Maintenance – The agreement should clearly layout the landlord and tenant’s responsibilities to maintain the dwelling unit (i.e., keep the premises clean, changing the batteries in a smoke detector, maintaining the yard, etc.). This should also outline any restrictions imposed on tenant’s making repairs to the dwelling unit.
• Landlord’s Access to the Property – To avoid any discrepancies regarding a landlord’s right to access the premises and to avoid any privacy issues, it must be clarified in the lease agreement of how much notice must be provided to the tenant. A landlord may access the property to make necessary repairs or in some states to show the unit to potential renters.
• Rules and Policies – Important rules, regulations, and policies (i.e., smoking restrictions, rent control ordinances, health/safety codes, prohibiting illegal activity, or permitting pets, etc.) should be outlined in the agreement. This helps limit a landlord’s liability.
• Disclosures – Depending on the state, federal, state or local laws might require landlords to disclose information in the agreement.

State Lease Agreement Laws

After a lease agreement is signed by both parties, the landlord may be required by state law to provide a copy of the rental agreement upon request. Below are some examples of state requirements for providing copies to tenants.

Required Disclosures and Addendums

Required disclosures and addendums vary by state. Disclosures may be made in the lease or rental agreement and addendums may be attached separately to the lease or rental agreement. Below are the most common required disclosures.

• Lead-Based Paint – It is a federal law that landlords provide notice of the potential risks of lead-based paint in homes built prior to 1978 with a specific disclosure form and pamphlet in addition to any known hazards in the building.
• Asbestos – Informs tenants if there is asbestos at the property so that a tenant can take certain precautions to minimize the chance of disturbing the asbestos fibers. This disclosure is required for properties build before 1981.
• Bed Bugs – For rental units with a history of infestation, it is recommended to provide information on the protocol for handling a bed bug infestation. This will notify the tenant of their obligation to cooperate with bed bug prevention by promptly reporting any sign of infestation to the landlord.
• Landlord’s Name & Address -Landlords or any individual authorized to manage the rental property must disclose their name and address so future legal notices and demands that are sent by the tenant can be properly delivered.
• Mold Disclosure– Informing the tenant of the current mold status of a property to protect against future liability of mold damages which might be caused by a tenant’s negligence during the lease term.
• Shared Utilities Arrangements – For rental units with shared utilities, it is recommended to disclose the specifics of how they are shared, and how each party’s bill is calculated, so that tenants have a reasonable expectation of what they owe each month.
• Move-in Checklist – An itemized list of damages to the property before the tenant moves in will clarify that the tenant is responsible for any serious damages that occur during the lease term.
• Refundable/Non-Refundable Fees- If nonrefundable fees are charged, such as a pet fees or other one-time expenses like access to amenities, they must be stated as “nonrefundable” in the lease. Otherwise, they may be subject to a refund upon termination of the lease.
• Smoking – It is recommended to state where smoking or medical marijuana use is and isn’t allowed on the property so that expectations are clear.
• Late and Returned Check Fees – Landlords are recommended to disclose any late fees or returned (bounced) check fees that they intend to charge. Some states limit how high these fees can be and should reflect the actual expenses incurred by the landlord because of a late payment.

Illegal Clauses

It is unlawful for a landlord to require a tenant to waive any of their rights or place discriminatory conditions in a lease or rental agreement. Illegal provisions may result in the landlord being liable for damages.

Here are a few examples of illegal provisions:

• Warranty of Habitability – Every state (except for Arkansas) has an implied warranty of habitability meaning that landlords have an obligation to keep the dwelling unit in a livable condition. Landlords are required to follow specific health and safety codes that provide minimum standards for rental units. This right to a livable dwelling unit cannot be waived.
• Tenant Responsible for Maintenance and Repairs – Landlords need to pay for the property’s maintenance and repairs; however, many leases and rental agreements are written to purposely confuse tenants when describing the landlord’s responsibilities. This is to make tenants feel that the maintenance and repair responsibilities are theirs. It is important to note that in certain circumstances, a tenant may be responsible for a repair if they negligently or deliberately destroy part of the premises.
• Charging Penalties Instead of Fees – All late fees and nonrefundable fees must be outlined in the lease or rental agreement. Late fees cannot be seen as a penalty for paying rent late, instead, the fee should reflect a reasonable estimate of the amount that the late payment will cost the landlord.
• Security Deposit – Security deposit deductions are the most common cause of lease disagreements. Tenants cannot be charged for damage they did not cause, costs the landlord did not incur, or normal wear and tear of the property. Many states regulate how a landlord can use a security deposit.

How to Write

Below is a step-by-step process on how to fill out a lease agreement.

Section I. The Parties

1. Date –Include the date when the agreement was written.
2. Landlord’s Contact Information –Include the landlord’s name and current mailing address.
3. Tenant’s Names – State the tenant(s) full name(s).

Section II. Location of the Premises

4. Address – Include the property address that is being leased.

Section III. Lease Term

5. Lease Term – Define the terms of the lease by clearly stating when the lease term begins and ends.

Termination Notice – Include the termination notice period.

Section IV. Rent

7. Monthly Rent Due – Include the price of rent that is due per month.
8. When Rent is Due – Write the date rent is due, typically rent is due on the first of each month.
9. Late Fees & Grace Periods– In most states, a late fee can be charged if rent is not paid on time. If there is a late fee, enter when rent is considered late and the fee for each day or occurrence rent is late.
10. Returned Checks – Enter where or not there will be a fee for a bounced check with non-sufficient funds (NSF). If there is a fee, enter the amount per bounced check.
11. Rent Increase -Include when the rent increase will become effective.

Section V. Security Deposit

12. Security Deposit – If a security deposit will be collected at the beginning of the lease, the amount should be disclosed in the agreement. Generally, this is equal to one month’s rent. Each state’s security deposit law indicates what a landlord can use the money for and the maximum amount that can be charged.

Section VI. Use of Property

13. Occupants – Name all tenants who are allowed to occupy the property so there are no discrepancies. This should include the tenant’s immediate family (including children) who will reside in the dwelling unit.

Section VII. Subletting

14. Assignment – Check the appropriate box to allow or deny the tenant to sublet the dwelling unit. If a landlord is allowing the tenant to sublet, it is important to indicate the number of days the tenant must notify the landlord of the subtenant’s contact information.

Section VIII. Right of Entry

15. Landlord Access – Landlords have a right to enter the dwelling unit during normal business hours by providing prior notice to tenants. Check with your state law to confirm if there is a required notice period.

Section IX. Non-Delivery of Possession

16. Non-Delivery of Possession – If the landlord cannot deliver possession of the property to the tenant at the designated lease term start date, the landlord shall have a certain amount of time which must be outlined in the lease to give possession of the property. Always check with state and local laws to confirm if there is a required possession period.

Section X. Utilities

17. Utilities – Indicate which utilities and services the landlord will provide to the tenants. Any utility or service not mentioned in the lease will be the responsibility of the tenant.

Section XI. Pets

18. Pets – Indicate if pets are allowed in the rental unit. If they are, outline any restrictions such as the type of pet allowed, the number of pets, weight restrictions. If the landlord is charging a non-refundable pet fee this should be clearly stated in the lease. Check with state laws to see if there is a limit on the amount a landlord can charge for a deposit. It is important to keep in mind that it is illegal to charge a pet deposit/fee for service or emotional support animals.

Section XII. Default

19. Default – This section touches on lease termination. If the lease will be terminated by the landlord for noncompliance enter how many days of notice shall be given. Next, if the lease will be terminated by the landlord for nonpayment of rent enter how many days of notice shall be given. It is important to check with state laws regarding notice periods.

Section XIII. Notice

20. Notice – To create a line of communication for important notices or demands between tenant and landlord, it is recommended that a landlord provides their mailing address in the lease.

Section XIV. Parking

21. Parking – The lease should inform the tenant if parking is included or not. If it is included, indicate how many parking space(s) are available to the tenant, the cost, and a description of the parking space(s).

Section XV. Early Termination

22. Early Termination – Gives the tenant to break the lease early or not. The lease must indicate the notice period for breaking the lease and the termination fee. It is important to check with state laws regarding early termination fees.

Section XVI. Smoking

23. Smoking Policy – Indicate if smoking is allowed or not allowed on the property. If there is a smoking policy, name the designated area(s) where a tenant can smoke.

Section XVII. Signatures

24. Signatures – The landlord and each tenant (who is an adult) should sign and date the agreement. A copy should be distributed to each tenant as well. It’s important to follow state law on distributing lease copies.