ContractsCounsel Logo

Elements of Residential Real Estate Lease

Updated: March 28, 2023
Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 10,596 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Blog Elements of Residential Real Estate Lease

Jump to Section

Residential Real Estate Leases: Key Terms

Having a rental property is a great way to create passive income. However, with most investments you are exposed to risk. Most people think the biggest risk is ‘market’ risk and how the price of your property is affected by market conditions. That is certainly a big risk, but one risk that is often overlooked is what I will call ‘tenant risk’. There are many risks associated with renting to tenants and it is important to have a good lease in place to protect you and your property.

Below are 5 essential clauses you should consider including in your lease agreement.

Use of Premises

This clause lets the landlord limit what the tenants use the property for. Most renters think they can use the property for anything they want. Ask yourself, do you want them throwing large parties? Do you want them renting it on AirBNB? Do you want your renters running a business out of your property? Wait…does that create a new type of liability for me?

It is important to have the use of the premise clearly outlined in a contract so that you are covered.

Subletting

This clause outlines whether the tenant is allowed to sublet the property, or parts of it. If a landlord is OK with tenants subletting, it should define under what circumstances. Most landlords do some form of screening to make sure they have good tenants they trust with their asset. If you do not address subletting, that screening may become moot if your tenants decide to sublet the property to new tenants you have not screened.

Lease Renewal

This clause will create transparency on what happens when the lease is up for renewal. Will you plan to increase rent? Will they move to month-to-month? Renters like predictability.

Some clauses may include a pre-defined escalator in rent, such as an automatic increase after the first year by a certain percentage. Anywhere between 2%-5% is pretty standard.

The clause may also include information about a ‘notice’ period, which would require renters to let the landlord know if they plan to renew. This helps as it will give you time to plan to find tenants so there are no gaps in rental income.

Severability

This clause basically means that if one part of the lease is deemed to be illegal for any reason, the rest of the contract is still legally binding. This is a very important clause that is often overlooked. You do not want to be in a situation where your lease is not compliant with local rules, thus, your entire lease becomes void and invalid.

Joint and Several Liability

This clause means that each party of the lease is jointly and individually responsible for fulfilling the terms of the lease agreement. This becomes important when you are renting to multiple tenants on the same lease. If one of them defaults on the lease, it says the other tenants are responsible for fulfilling all lease obligations.

Property managers and landlords are encouraged to have great leases that protect your asset and interests. As we always say, if you have any question or need advice on real estate leases, please speak to a real estate lawyer!

Need help with a Residential Lease Agreement?

Create a free project posting

Meet some of our Lawyers

Sara S. on ContractsCounsel
View Sara
4.9 (67)
Member Since:
July 14, 2023

Sara S.

Attorney
Free Consultation
Washington, D.C.
4 Yrs Experience
Licensed in DC, MD
American University Washington College of Law

With over ten years of intellectual property experience, I’m happy to work on your contractual matter. I am very diligent and enjoy meeting tight deadlines. Drafting memoranda, business transactional documents, termination notices, cease and desist letters, licenses and letter agreements are all in my wheelhouse! Working in a variety of fields, from construction to pharmaceutical, I enjoy resolving any disputes that come across my desk.

Ted A. on ContractsCounsel
View Ted
4.9 (19)
Member Since:
August 10, 2023
Jeremiah C. on ContractsCounsel
View Jeremiah
5.0 (42)
Member Since:
March 5, 2021

Jeremiah C.

Partner/Attorney at Law
Free Consultation
Houston
16 Yrs Experience
Licensed in NV, TX
Thomas Jefferson

Creative, results driven business & technology executive with 24 years of experience (15+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.

Brianna N. on ContractsCounsel
View Brianna
5.0 (2)
Member Since:
June 16, 2021

Brianna N.

Attorney
Free Consultation
New York
8 Yrs Experience
Licensed in NY
Touro Law School

Brianna is a well-respected New York licensed attorney with a Juris Doctorate degree in law from Touro College Jacob D. Fuchsberg Law School and bachelor’s degree in Business Administration and Management from Dowling College. Since becoming an attorney, she has practiced in various areas including business law, corporate law, residential real estate, commercial real estate, criminal law, traffic law, employment law, landlord tenant law, estate planning, and has represented intermediaries in procurement and the personal protective equipment industry. Brianna has broad and extensive business experience; She is an entrepreneur and co-owner of a microtechnology manufacturing company that was built by her and her partner, where she also served as the Chief Legal Officer and Human Resource Manager for the company. While building the manufacturing business, she created a brokerage firm for business transactions and has managed several other businesses which she has ownership interest in. Brianna’s involvement in these various businesses over the past 15 years provides a unique skillset to her clients; Not only does she understand contractual principals and obligations from a legal perspective while drafting and negotiating agreements, but she also has the foresight, experience, and ability to ensure the agreement reflects the practical aspects of the business. Based on the client’s needs and desired outcome, she has the forethought to cover different angles that would be overlooked from a legal standpoint, and as a result she is able to help prevent unforeseen business ramifications. She conducts extensive risk assessments on behalf of her clients and minimizes exposure to potential liability without “over lawyering” agreements. One of Brianna’s main areas of focus is drafting and negotiating agreements. Negotiation is a passion of hers which was applied in law school while she was a member of the Alternative Dispute Resolution Society, notably winning Touro Law School’s intraschool negotiation competition. In her more recent years, Brianna has removed herself from her various business interests to focus on her law practice. Brianna has a strong moral compass and believes in quality over quantity. She treats every client as a top priority; thus, she will not take on many cases at a time because she wants to give each client the focus and attention they deserve. She has sharp attention to detail and is a forceful advocate for every client. Brianna has broad and extensive business experience; She is an entrepreneur and co-owner of a microtechnology manufacturing company that was built by her and her partner, where she also served as the Chief Legal Officer and Human Resource Manager for the company. While building the manufacturing business, she created a brokerage firm for business transactions and has managed several other businesses which she has ownership interest in. Brianna’s involvement in these various businesses over the past 15 years provides a unique skillset to her clients; Not only does she understand contractual principals and obligations from a legal perspective while drafting and negotiating agreements, but she also has the foresight, experience, and ability to ensure the agreement reflects the practical aspects of the business. Based on the client’s needs and desired outcome, she has the forethought to cover different angles that would be overlooked from a legal standpoint, and as a result she is able to help prevent unforeseen business ramifications. She conducts extensive risk assessments on behalf of her clients and minimizes exposure to potential liability without “over lawyering” agreements. Additionally, she specializes in drafting and negotiating agreements. Negotiation is a passion of hers which was applied in law school while she was a member of the Alternative Dispute Resolution Society, notably winning Touro Law School’s intraschool negotiation competition. In her more recent years, Brianna has removed herself from her various business interests to focus on her law practice. Brianna has a strong moral compass and believes in quality over quantity. She treats every client as a top priority; thus, she will not take on many cases at a time because she wants to give each client the focus and attention they deserve. She has sharp attention to detail and is a forceful advocate for every client.

Jeff C. on ContractsCounsel
View Jeff
5.0 (8)
Member Since:
July 31, 2020

Jeff C.

Outside General Counsel / Business Attorney
Free Consultation
Colorado
37 Yrs Experience
Licensed in CO, OR
University of Oregon

Experienced and broad based corporate/business attorney and Outside General Counsel (OGC), for start-ups, small businesses and growing companies of all sizes, advising and assisting clients with corporate and LLC formation, contracts and agreements, internet and terms of use/service agreements, trademarks and intellectual property protection, the purchase and sale of businesses (M&A), labor and employment matters, compliance and risk management, corporate governance, and commercial leasing matters. See other reviews on my website at www.ogcservices.net/reviews

Paul S. on ContractsCounsel
View Paul
5.0 (14)
Member Since:
August 4, 2020

Paul S.

CEO
Free Consultation
Cincinnati, OH
38 Yrs Experience
Licensed in CA, OH
Boston University

I focus my practice on startups and small to mid-size businesses, because they have unique needs that mid-size and large law firms aren't well-equipped to service. In addition to practicing law, I have started and run other businesses, and have an MBA in marketing from Indiana University. I combine my business experience with my legal expertise, to provide practical advice to my clients. I am licensed in Ohio and California, and I leverage the latest in technology to provide top quality legal services to a nationwide client-base. This enables me to serve my clients in a cost-effective manner that doesn't skimp on personal service.

Christopher J. on ContractsCounsel
View Christopher
Member Since:
August 4, 2020

Christopher J.

Attorney and Counselor at Law
Free Consultation
Ann Arbor, MI
25 Yrs Experience
Licensed in MI
Detroit College of Law at Michigan State University

Experienced attorney focusing on estate planning, probate administration, business formation and counseling, and consumer bankruptcy.

Find the best lawyer for your project

Browse Lawyers Now

Need help with a Residential Lease Agreement?

Create a free project posting
CONTRACT LAWYERS BY TOP CITIES
See All Real Estate Lawyers
Learn About Contracts
See More Contracts
other helpful articles

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a Residential Lease Agreement?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city