Rental and Lease Agreements
The rental agreement (or lease) governs the entire rental relationship from a financial and legal standpoint. This includes the amount of rent, when it's due, and how to pay it; how many people can live in the apartment, including rules for subletting; what each party’s duties are, and what to do if either party fails to perform. Given how important the lease is to both parties, landlords and tenants must educate themselves on the terms and legal implications of leases. In this section, you will learn about how leases work, what to look for when reviewing a lease or rental agreement, how to add a roommate to a lease (if allowed by lease), terminating a lease, and more.
Common Lease Provisions
While leases occasionally are reached with a verbal agreement and a handshake, they more often involve a written lease agreement. Certain provisions, including the names of the two parties and the address of the rental unit, are standard. But lease agreements are all different, depending on the landlord's wishes and the limits of the law.
Common provisions include, but are not limited to, the following:
- Description of the rental property
- Length (term) of the lease
- Amount and due date of rent
- Late fees (if applicable)
- Rules for pets
- Parameters for when landlord may enter the property
- Security deposit amount
While verbal lease agreements may be considered valid, you should always insist that the terms are in writing in order to best protect your interests.
Illegal (Unenforceable) Lease Provisions
Just because it's written in a lease agreement doesn't mean it's enforceable. Certain provisions violate federal law, such as requirements that a tenant be a certain gender or not be a certain race, color, or nationality. Other provisions that violate the law and are thus unenforceable include the following:
- Agreements allowing the landlord to enter the property at any time, without warning
- Agreements that tenant will pay for all damages, regardless of fault
- Agreements that landlord can repossess property if tenant is late with the rent
Ending a Lease
When the lease ends, the parties may agree to extend the lease for another year or part ways, but state laws provide some parameters for what is allowed. If the tenant simply continues to pay rent after the lease term is up, and the landlord accepts the rent without offering a new lease, then the lease automatically carries over into a month-by-month lease in most states. But in some states, the lease is automatically extended (usually for one year) after the landlord accepts rent beyond the lease term. If the landlord wants to alter the terms, he or she must give the tenant at least 30 days notice.
If the tenant is planning to move out at the end of the lease, the landlord likely will take inventory of any damage done to the property and the cost of any required cleaning, which is paid through the security deposit. Any amount left over must be returned to the tenant within the time period allotted by the particular state's law. Some states require repayment of the balance of the deposit within 14 days, and some allow up to 60 days.
When you sign a lease, you sign a legal agreement with the owner of a rental property. So it makes sense to get a complete understanding of what it is you're agreeing to. Click on a link below to learn more about rental and lease agreements.