Rental Agreement: Definition, Key Terms, Differences
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What Is a Rental Agreement?
A rental agreement is a legal document describing the arrangement between the owner of real estate and another party who will pay rent in exchange for permission to occupy the property.
The owner of the real estate is also known as a "landlord" or "lessor." The party paying rent is known as a "tenant" or "lessee."
This type of agreement is a contract documenting the use of a space, either residential or commercial, for a fixed period of time in exchange for rent. The landlord and tenant can negotiate the terms of this contract. Once both parties sign the agreement, however, it is considered legally and mutually binding.
You may also encounter a rental agreement referred to as the following:
- Apartment lease
- House rental agreement
- Lease agreement
- Lease form
- Rental contract
- Rental lease agreement
What Is the Difference Between a Rental Agreement and a Lease Agreement?
Although the terms are often used interchangeably, a rental agreement and lease agreement can legally refer to distinct types of agreement documents. Both rental agreements and leases are legally binding contracts between a landlord and a tenant or tenants.
A rental agreement has the following characteristics:
- A rental agreement is usually month to month.
- Landlords can make changes to the rules of the property and rent, provided they give their tenants proper notice.
- Notice of changes must typically come 30 days in advance, although the required amount of time can vary among states.
A lease agreement has the following characteristics:
- A lease agreement states the amount of rent due for a specific amount of time.
- A landlord cannot make changes to the property rules or rent during the rental time.
- If landlords decide to make changes to the lease agreement terms, they must wait until the lease has expired to renegotiate new terms for the lease.
The biggest difference between a rental agreement and a lease is the period of time these documents typically cover. A lease generally covers a longer period of time, for example, six months or 12 months. A rental agreement covers a shorter period of residency, usually 30 days.
Lease Agreement Templates
Terms to Include in a Rental Agreement
Whether you are creating a rental agreement for an apartment, home, or room, you should include certain terms in your agreement.
Names of All Parties
A rental agreement should list all parties to the agreement in the document, making sure to include all adult tenants. A rental agreement should list the landlord and main tenant as well as all other adults occupying the premises.
Including all names ensures that:
- All adults living in the rental property are responsible for obligations and duties outlined in the agreement, including paying rent.
- The landlord can terminate the agreement if any tenant violates the terms of the agreement.
If only one tenant is listed, the landlord has fewer options if one of the other occupants violates an important term of the agreement.
Term of Tenancy
This clause should describe whether the rental agreement is a month-to-month agreement (carrying over each month unless the tenant or landlord terminates the agreement) or whether it is a lease agreement covering a fixed term (typically for a year with the option for renewal upon expiry of the initial fixed period). The rental agreement should also address options for termination.
Rent
The rental agreement should include provisions for:
- The amount of rent
- When the rent payments are due
- When a rent payment is considered late
- How rent payments should be made
- What payment methods are accepted
- What happens if a rent payment is late or if a rent check bounces
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Security Deposit and Other Fees
Security deposits can become a contentious issue between a landlord and tenant. The rental agreement should make all matters pertaining to the security deposit clear to avoid future disputes. The rental agreement should state:
- The amount of the security deposit
- When and how a landlord can use a deposit
- When and how the landlord will return the deposit
- Other fees that can be deducted from the security deposit, such as repair or cleaning fees
States may set specific requirements with which landlords must comply in terms of security deposits. Landlords should consult with state laws to ensure the terms of the rental agreement are valid.
Repairs and Maintenance
Both the landlord and tenant(s) should have their maintenance obligations set in the terms of the rental agreement. For example, tenants may be responsible for:
- Maintaining a clean premises
- Any damages they cause
- Informing the landlord of any repairs that need to be made for which the landlord is responsible
Alteration and Damage to the Property
The rental agreement should state who is responsible if damages to the property occur. The agreement should also set out what, if any, types of alterations a tenant may make to the property, as well as when a landlord must approve or grant permission to a tenant to perform an alteration.
Occupancy or Subleasing
If the landlord has limits on occupancy or subleasing possibilities, the rental agreement should define these terms. A landlord can place limits stipulating that only those who sign the lease and their minor children can live in the rental property. A landlord can also prevent a tenant from subleasing the property without prior approval.
Pets
The rental agreement should clearly state whether pets are permitted on the property. If the agreement allows pets, the document should describe:
- The maximum number of pets allowed
- Any restrictions to the types of pets allowed, for example, small dogs weighing less than 50 pounds
- The tenant's responsibility to keep the premises clean
Right of Entry
A rental agreement should specify the conditions that allow a landlord to enter a rental property. The agreement should also state what notice is required before the landlord can enter. State laws often regulate a landlord's right of entry, and provisions in the rental agreement should align with the legal requirements of a state.
Illegal Activities and Disruptive Behavior
The rental agreement should clearly state what constitutes illegal activities, such as dealing drugs, as well as what is considered disruptive behavior, such as excessive noise). The agreement should also prohibit such activities and behavior, stating that these activities and behaviors would be grounds for termination of the agreement.
Other Rules and Regulations
A rental agreement can cover other expectations for the tenant's behavior, including the following:
- Whether smoking is allowed
- Whether overnight guests are allowed
- If overnight guests are allowed, how long they can stay at the property
Severability Clause
A severability clause will allow the rest of the rental agreement to remain in place if one particular clause is illegal, for example, because it doesn't comply with state laws for rental property.
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Local and State Laws
Before writing a rental agreement, landlords should consult with local and state laws to make sure that all included provisions comply with legal requirements. Local and state laws can regulate aspects such as subleases, notice requirements, and how a landlord can deal with a property if a tenant leaves without paying rent. These laws may vary from location to location.
If you are a landlord preparing to rent a property, a rental agreement can provide important protections. When you're drafting a rental agreement, consult with a lawyer to ensure your document covers all necessary aspects.
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Landlord Tenant
Rental Agreement
Washington
Are there automatic renewals in rental agreements?
I am looking to rent a property and have read the rental agreement, however, I am unsure if there are any automatic renewals in the agreement. I have heard that sometimes rental agreements are set up to automatically renew after a certain period of time, but I am not sure if this is the case with my agreement. I am looking for clarity on whether or not the agreement I am signing includes any automatic renewals.
Merry K.
Residential month to month rental agreements and/or residential lease agreements often include terms regarding whether or not an agreement automatically renews. However, the Washington State Residential Landlord Tenant Law and/or ordinances in certain WA cities sometimes may provide the answer to your question. https://apps.leg.wa.gov/rcw/default.aspx?cite=59.18
Landlord Tenant
Rental Agreement
Florida
What happens if a rental agreement expires?
I recently signed a rental agreement for an apartment. The agreement was for a one year lease and it is now coming close to the expiration date. I am wondering what are my rights and obligations if the agreement expires. I am concerned that the landlord may try to keep me in the apartment longer than I am legally obligated to stay.
Diane D.
When your lease expires, then it is over unless you sign a new lease or fail to give your landlord a 30-day notice. Send your notice and move out when before the lease expires, which could be the last day of the lease.
Landlord Tenant
Rental Agreement
Washington
How to amend a rental agreement?
I am a tenant in an apartment that I have been renting for the past year. Recently, my landlord has asked me to sign a new rental agreement with updated terms and conditions. I would like to know the process for amending the agreement so that I can make sure all the terms are agreeable to both parties.
Merry K.
Speaking generally, if your agreement is a lease, neither the landlord nor tenant can amend it unless both parties agree (the same can be said for a completely new agreement). If it is a month to month agreement, if you don't sign, the landlord may be able to give you notice to vacate. What I would do is ask for a couple of days for review. Put your current agreement down with the proposed new agreeement down, side by side, and go through them together, paragraph by paragraph. At the same time, make notes about anything in the new agreement you don't like, and attempt to negotiate the terms with your landlord before signing. Please note that the WA State Residential Landlord Tenant law was modified in several ways by the WA State Legislature, effective a few months ago - this may be why your landlord is doing this. For example, a landlord now has 30 days to return a security deposit (or explain why he/she isn't); it was 21 before that, and 14 before that). To review the Landlord/Tenant Law at the same time, follow this link: https://apps.leg.wa.gov/rcw/default.aspx?cite=59.18 If you would like to hire me to help, I am not available until October 15th, I'm afraid - I'm on vacation at Yosemite.
Landlord Tenant
Rental Agreement
Washington
What's an addendum in a rental agreement?
I am a renter who recently signed a rental agreement for an apartment. I was provided with a copy of the agreement, but it included an addendum that I was not given an opportunity to review before signing. I am concerned that the addendum may contain terms that I was not aware of and would like to know what an addendum in a rental agreement is in order to understand my rights and obligations under the agreement.
Merry K.
An addendum to a rental agreement is the same as any other terms and condition that is part of the rental agreement itself. An addendum is binding. If you are concerned about the terms in the addendum, especially since you were not given an opportunity to read the addendum in advance, you should contact the landlord in writing to express your concerns, and note that you were not given the opportunity to read the addendum in advance and do not consider the addendum part of your rental agreement. For assistance, please contact a landlord/tenant attorney.
Landlord Tenant
Rental Agreement
New York
Can a landlord increase the rent during the term of a rental agreement?
I am currently renting an apartment and have a signed rental agreement with my landlord for a fixed term of one year, with a specified monthly rent. However, recently my landlord informed me that they intend to increase the rent starting next month. I was under the impression that the rent amount was fixed for the duration of the agreement, so I am seeking clarification on whether a landlord has the right to increase the rent during the term of a rental agreement.
Damien B.
Hello! My name is Damien Bosco, Esq. My law office is in Long Island City, across from Manhattan. Generally, you are correct. For an annual lease with a fixed monthly rate, a landlord cannot increase the monthly rent during the pendency of the lease. Sometimes, the lease may allow for such an increase, but only if there is a provision in the lease that allows for it. If your lease does not include a rent adjustment clause and you believe the landlord is acting improperly, you are within your rights to challenge the increase. Feel free to reach out with any more questions about this.
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