A residential lease agreement, sometimes referred to as a lease or rental agreement, is a legal contract a tenant and landlord sign when a tenant decides to rent a residential property. It outlines the terms and conditions of the tenancy, including the obligations and rights of the tenant and landlord. Tenants and landlords can use residential lease agreements for a variety of residential properties, including townhouses, duplexes, condos, houses, apartments, and more.
The landlord's most important obligations in a residential lease agreement include:
On the other hand, the tenant's most important obligations in a lease agreement include:
The clauses included in a residential lease agreement vary depending on whether it is a standard residential lease agreement or a comprehensive lease agreement. A standard residential lease agreement typically includes the following:
In addition to the clauses in a standard residential lease agreement, a comprehensive residential lease agreement can specify whether or not the property is furnished, appoint a property manager who acts on behalf of the landlord, and state whether or not the tenant can operate a home business on the premises. This type of residential lease agreement also allows the landlord to include a pet fee or deposit and includes information about a guarantor or surety. A guarantor is someone, such as the tenant's parent or close friend, who agrees to pay the rent if the tenant defaults on rent.
Here's an article that shares a few other essential clauses in a residential lease agreement.
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Only the tenant and the people listed as occupants can live in the property. The difference between a tenant and an occupant is that a tenant is a person who signs a lease agreement, while an occupant is a person who lives in the property with a landlord's permission but doesn't have the same obligations and rights as a tenant. For example, an occupant is not legally required to contribute to a security deposit or pay rent but a tenant would.
Occupants can be both children and adults. Children adopted or born while the tenant lives in the property are automatically listed to lease as occupants. However, any state may limit the number of occupants/tenants in the property if that number violates safety or health regulations for housing. These regulations vary from one state to another.
A residential lease agreement doesn't have to be notarized because a lease is usually considered a short-term contract. Lease terms are usually month to month, six months, or one year in length.
Some states consider leases that exceed one year to be long-term leases. In this case, the residential lease agreement has to be notarized. It doesn't usually cost much money to notarize a residential lease agreement.
If you want to learn more about how much you can expect to pay in notary fees, head to this article .
If a tenant chooses a periodic term lease, the lease will automatically renew with the same terms and conditions as the initial lease, unless the landlord made some changes using the required notice period. Even after the initial lease period, notice from either the landlord or the tenant is required to end the lease agreement.
If a tenant chooses a fixed-term lease, however, the lease agreement between the tenant and landlord may continue if both parties agree. In some states, a fixed residential lease automatically becomes a periodic term residential lease. In other states, the fixed-term lease may become a "tenancy at sufferance" or a "tenancy at will" when it ends, which only lasts as long as the tenant and landlord want it to. This type of residential lease term usually occurs after an expired residential lease agreement and doesn't have as much legal protection as an unexpired residential lease.
If a tenant decides to terminate all rights under a fixed-term residential lease agreement as soon as it expires, they should serve notice before the end of the lease term, in accordance with their local requirements.
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If a tenant agreed to a fixed-term tenancy, they have to pay the rent during that period. If the tenant leaves the property before the term of the contract ends, they're still responsible to pay the rent for the entire length of the lease. However, if the landlord is able to re-rent the property before the end of the lease of the breaching tenant, they may no longer require the breaching tenant to pay rent. Landlords are not allowed to collect double rent, even if the previous tenant has left.
If the tenant breaches a term of the residential lease agreement, they're responsible for correcting it. This may involve paying money to repair any damages that the tenant or their guests may have caused. If they don't voluntarily pay to correct the breach, such as making a payment or repair, they can be evicted by the landlord or possibly face a lawsuit for damages sustained as a result of the breach.
If you are a landlord preparing to lease residential property, a residential lease agreement can provide important protections. When you are drafting a residential lease agreement, consult with a lawyer to make sure your document includes all necessary aspects.
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