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What Is a Lease Agreement?
A lease agreement is a legal document outlining the rental terms for either a commercial or residential property between the property owner, also known as the landlord or lessor, and the renter, also known as the tenant or lessee. These documents may also be called apartment leases or lease forms, though the lease agreements are not limited to apartments.
Creating a thorough and effective lease agreement is very important as it protects all parties involved throughout the length of the lease. While many landlords begin with boilerplate lease agreements, the language and terms are negotiable by all parties until signed, at which point the lease agreement becomes a legally binding document.
Types of Leases
People can lease all manner of property, including items like cars and boats. Most frequently, however, lease agreements are used for real estate, both residential and commercial. A few of the most common types of leases include:
- Commercial lease: Commercial property like offices.
- Condominium lease: A residential property that shares some building amenities with other tenants.
- Family member lease: For family members leasing property.
- Hunting lease: To use private property for hunting.
- Lease-to-own lease: Provides the option to purchase the property from the landlord.
- Month-to-month lease: A type of short-term lease agreement.
- Parking space lease: To use for parking a vehicle on private property.
- Room lease: Leasing a single room within a home.
- Standard lease: Used for single-family homes, apartments, and other residential properties.
- Sublet lease: A lease created by the renter for adding a renter to the lease.
- Short-term lease: Used for short-term leases of unusual periods.
- Weekly lease: Used often for vacation properties.
Elements of a Lease Agreement
Lease agreement terms can differ greatly depending on the type of lease and the specific needs of the renter and landlord. However, basic elements include:
- Contact information: Include information for the landlord and all adults who will live at the property.
- Property details: Describe the property with its address, square footage, amenities, and other important identifiers.
- Lease specifics: Explain the type of lease, such as residential, and the terms, such as the end date.
- Rent details: List the monthly rent amount and the date it's due each month.
- Rights and obligations: Provide the rights for the landlord and tenants, such as entry or giving notices.
- Dispute resolution: Outline the steps to resolve any disputes over the property or lease agreement.
- Deposit and fees: List the amount of any security or other deposits or additional fees.
- Occupancy limits: Provide specifics for how many people and who specifically can reside at the property.
- Restrictions: List any restrictions, like installing additional appliances or making changes to permanent fixtures.
- Pets: Describe whether or not pets are allowed and the specifics related to pets on the property.
- Maintenance and repairs: List what maintenance and repairs are provided by the landlord.
- Utilities: Explain who is responsible for paying which utilities.
Lease Agreement Templates
Addendum, Disclosures, and Notices
Some leases require additional documentation in the form of addenda, disclosures, and notices. Usually, disclosures are included with the initial lease, while addenda and notices can be added to the lease later.
- Addendum: An addendum is an addition to the lease. Common examples include adding pet terms to a lease or documenting a change in one of the renters.
- Disclosures: Disclosures are often legally required to ensure renters understand all aspects of the property they're renting. An example might be the possible existence of old lead paint in a home built prior to a certain date.
- Notices: Notices are official announcements. For example, a renter might give notice that they don't intend to renew their lease for another year.
Lease Agreement End Dates
Leases generally have two possible end dates — either fixed term or automatic renewal. Fixed-term end dates provide a specific time frame in which the lease is active. At the end of the lease, both parties must agree to renew and either include an addendum to the lease extending its length or write up a new lease. An automatic renewal continues indefinitely unless either the landlord or the renter provides notice dissolving the lease.
Image via Unsplash by Sebastian Herrmann
Lease Agreement vs. Rental Agreement
Often, the terms "lease agreement" and "rental agreement" are used interchangeably. However, some people do use them to mean specific things, so it's essential that you clarify with the other parties involved in a lease agreement what the terms of the contract are.
Generally, lease agreements refer to long-term property contracts, usually over 30 days. Lease agreements also tend to have fixed-term end dates. Rental agreements, by contrast, refer to short-term property contracts, usually under 30 days. A new agreement is generally required to renew.
What Is a Rent-to-Own Lease Agreement?
Rent-to-own lease agreements, also called option-to-purchase or lease-to-own agreements, give the renter the option to buy the property at a predetermined price or the option to apply a portion of the rent towards the purchase price if the tenant decides to buy the property in the future. In most cases, the renter pays an option fee to the landlord for the right to purchase the property later. If the renter decides not to go through with the purchase, then the landlord keeps the option fee.
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Lease Agreement Laws
Every state in the country has its own laws and regulations regarding leasing and renting property. If you're a landlord, it's vital you understand the laws for your state to ensure your lease agreement properly accounts for all the legal necessities for you and your tenants. Most states have laws outlining:
- General landlord and tenant rights.
- Security deposits.
- Landlord's access to the property once the tenant takes up residence.
- Late rent payments.
- Lease agreement violations.
How to Create a Lease Agreement
Landlords have a couple of options when writing a lease agreement. You can create your own by using a standard template and adjusting it to meet the needs of your tenants. However, if you're not well-versed in the landlord and tenant laws that govern your state, you may not adequately cover all the necessary terms in your lease. It's often better to consult a contract attorney who can help you draft a lease agreement that protects both you and your tenant while meeting all state legal obligations.
Important Terms
When writing or reviewing a lease, you'll probably come across some industry terms. These are the most common and important to understand:
- Alterations: Changes to the property, such as paint or fixtures.
- Appliances: Items like ranges and refrigerators that are included with the property.
- Cosigner: A third-party who helps the primary tenant pay the rent.
- Furnishings: A list of all included furniture like tables, couches, and beds.
- Guarantor: A third-party who will pay the rent if the primary tenant cannot.
- Governing law: Reference to the state laws that govern the lease.
- Guests: The number of people who can visit the property at one time.
- House rules: Agreed-upon rules like quiet hours.
- Insurance: Disclosure of any landlord-provided insurance protection for the tenants.
- Late charges: The amount of money the tenant will have to pay in addition to their rent if payment is late.
- Monthly rent: The amount of money due each month.
- Parking: Explanation of whether parking is included, where, and for how many vehicles.
- Receipt of agreement: All parties must have a copy of the signed lease for it to be valid.
- Renewal option: An explanation of the terms and conditions related to renewing the lease.
- Security deposit: The amount of the security deposit and the terms for the tenant to get it back at the end of the lease.
- Subletting: An explanation of whether subletting is allowed and the specifics for adding a subletter.
- Termination: Specifics for early termination of the lease and any monetary penalties associated.
- Utilities: A description of which party is responsible for which utilities.
Lease agreements are legally binding agreements, so the language within the lease must be clear and comprehensive. Consider using the expertise of a contract lawyer to help you craft an effective lease agreement that protects everyone involved.
Meet some of our Lease Agreement Lawyers
Don G.
Texas licensed attorney specializing for 22 years in Business and Contract law with a focus on construction law and business operations. My services include General Business Law Advisement; Contract Review and Drafting; Legal Research and Writing; Business Formation; Articles or Instructive Writing; and more. I am able to draft and review contracts, and have experience with, contract law and business formation in any state. For more insight into my skills and experience, please feel free to visit my LinkedIn profile or contact me with any questions.
Adalbert M.
Dynamic Attorney helping people and small business owners protect their assets. Founding Attorney at THE CYA LAW FIRM, PLLC, in Port Saint Lucie, Florida. Offering a wide range of legal services including: Living Trusts and Wills, POA and Advanced Directives, Business Formation, Contract drafting, Business Counsel, Prenuptials and Postnuptials, and more. **Licensed in Florida and fluent in English and Spanish.
Mark P.
www.parachinilaw.com I represent a diverse mix in a vast array of specialties, including litigation, contracts, compliance, business and financial strategies, and emerging industries. Credit for this foundation of strength goes to those who taught me. Skilled professors and professionals fostered my powerful educational and professional background. Prior to law school, I earned dual Bachelor’s degrees in Business Administration & Accounting from Peru State College. I received a Master of Business Administration degree from Chadron State College. My ambitions did not stop there. While working full time as a Senior Accountant for the University of Missouri, Columbia, I achieved the lifelong goal of becoming a licensed Certified Public Accountant (CPA). Mizzo provided excellent opportunities and amazing experiences. Managing over $50M in government and private research funding was a gift. As a high ranking professional in the Department of Research, I was given priceless insight into the greatest scientific, journalistic, medical, and legal minds in the world. My passion for successful growth did not, and has not stopped. I graduated summa cum laude (top 3%) with a Doctorate in Law, emphasizing in urban, land use and environmental/toxic tort law from the University of Missouri, Kansas City. This success lead to invaluable experiences of serving as Hon. Brian C. Wimes' judicial clerk for the U.S. District Court for the W. D. of Missouri, as a staff editor/writer for UMKC Law Review, and as a litigation and transactional attorney with Lathrop GPM (fka Lathrop & Gage). My professional and personal network is expansive, with established relationships throughout the U.S. and overseas. Although I engage in legal practice all over the country, I maintain law licenses in Missouri, Kansas, and Nebraska. Federally, I hold licenses in the W.D. and E.D. of Missouri and the District of Nebraska. To offer extra value, efficiency, and options, I maintain a CPA license and am obtaining a real-estate brokerage license.
Albert M.
I am a New Jersey licensed attorney and I have been in practice for over nineteen years. My practice mainly consists of representing public entities (municipalities, school boards, etc) and businesses, both small and large. In that capacity, much of work consists of drafting, reviewing and revising contracts.
Jose P.
I am a corporate lawyer with expertise working with small businesses, venture capital and healthcare. Previously, I worked at large law firms, as well as head attorney for companies. I graduated from Harvard College and University of Pennsylvania Law School. I speak 5 languages (Spanish, French, Italian and Russian, plus English), visited over 60 countries, and used to compete in salsa dancing!
January 26, 2021
Sean D.
Accomplished and results-driven business attorney with extensive experience in commercial real estate / project finance, commercial transactions, and entity formations, that possesses a winning blend of subject matter expertise, skill in client relationship management, and practical experience. Leverages a unique mix of legal, strategic, and analytical expertise that consistently meets and surpasses client expectations. Specialties: Commercial Real Estate Law, Contract Negotiation, Entity Formation, Joint Ventures, Procurement, Lease/Buy/Sell Transactions, Business Consultations, Team Leadership, and Economic Development
February 8, 2021
Jonathan D.
Miami-based duly licensed attorney and customs broker with significant experience in various types of supply chain business agreements, as well as experience in entertainment law.
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Lease Agreement
Texas
Lease renewal clause definition?
I want to know exactly what my renewal term paragraph in my lease means? Just want some clarification. Landlord says he is upping the rent considerable at end of my term for another 2 years, but my lease agreement says something different I believe and would like someone with lease expertise to see what they think?
Forest H.
Good morning, feel free to contact me through the contracts counsel portal with the language in question and I would be happy to give you my opinion.
Landlord Tenant
Lease Agreement
Kentucky
I was working in Califonia and my spouse working in Edgewood, KY. We were living in Fort Thomas. Now my job is changed to lexington KY.
Should Lessee's present employer transfer Lessee's place of employment outside the immediate area (fifty mile radius) Lesse may terminate this Lease upon thiry (30) days written notics and payment of an additional sum equal to one (1) month;s rent. Lessee must present written notics from his employer to lessor. If lessee is inducted, recalled, trasnferred or discharged from military service, Lessee may terminate this lease uopn thirty (30) days written notics and payment of additional sum equal to one (1) month;s rent. Lesse must present o Lessor a copy of his/her military orders.
Nichole C.
It is unclear what your exact question is. Unless illegal or unconconscionable, anything can be agreed to in a contract. Enforcing the agreement may require litigation. If you are asking if the clause is a valid one, it could be. If you are asking what to do if the landlord did not honor it, you may need to sue. If you are asking if this is standard and was not in the contract, the answer is no. You cannot assume it is. Hope this helps some. Contact me if you would like a consultation specifically on this issue.
Car Dealership
Lease Agreement
New York
Can I change my lease agreement with the dealer after purchase since they seemed to cheat
I just lease a new car. I went to the dealer 2 weeks ago, met with a lease specialist and signed a sketch lease agreement and paid $300 for deposit. The important thing is that we agreed on 0 down payment and $253 monthly payment. So on the lease agreement, the item "down payment" was written as "taxes + fees", but not specified how much will be charged. After 2 weeks, the car arrived and I went to pick it up. The original lease specialist was not there and another person took care of my lease. I trusted them and paid as they said, though more than I expected. However after I carefully read the new lease agreement later, I found that the down payment was not set to be 0, while the monthly payment remained the same. Besides taxes & fees totaling to $910, they set up "capitalized cost reduction" $2819, minus some rebates $1175, and charged me $910 + $2819 - $1175 = $2554. Later I called the dealer for an explanation but they said yes this is just 0 down payment, the amount I paid was due to blablabla. I don't believe them now - that $2819 "capitalized cost reduction" is used to calculate the residual value of the car at the end of lease. Doesn't that just mean down payment? I wonder if I can argue with the dealer and get my money back, add it to the residual value of the car. I have both copies of the lease agreement. Maybe I need the help of an attorney.
Jane C.
It seems that you paid the capitalized cost reduction to reduce you monthly payments.
Tenant
Lease Agreement
New York
Charged for not giving a 60-day notice
My rental agreement says nothing about and automatic renewal clause not 60 day notice. I signed a deposit slip after I put down money on the places that says 60 day notice must be given before moving out even at end of lease. Is this legally binding since it is not in the lease? It seems like they are trying to through a lease clause on a deposit slip.
Jane C.
The terms of the lease control. Please read this guide to tenants rights. https://ag.ny.gov/sites/default/files/tenants_rights.pdf
Landlord Tenant
Lease Agreement
New York
Can the tenant use the property for storage?
As a business owner, I am looking to rent a commercial property to use for storage purposes. However, I am unsure if the property's lease agreement allows for such use or if there are any restrictions in place. Therefore, I am seeking legal advice on whether I can use the property for storage and if there are any legal implications I should be aware of.
Donya G.
In order to advise you on the lease, you would have to have the lease reviewed so that the purposes for the lease can be established and discussed with you. I can help to review your lease and advise you on you can and cannot do based on the lease. You can connect with me via the website to engage my services Donya Gordon
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