Things to Include in a Residential Lease Agreement

A leasing agreement is a binding contract between a landlord and a tenant. It formalizes the agreed upon terms, conditions, disclosures and clauses of the two parties. The residential lease agreement contains basic information about the tenant, landlord and the property being rented out. If any conflicts arise, it is a document that can be presented in court as evidence that an agreement had been broken.

The lease agreement acts as a guide that can be a reference to the tenant and the landlord. It outlines both of their rights and obligations. It also includes the important financial figures and due dates. Below are the terms you'll tend to find in a residential lease agreement:

1. Names of all occupants

All names of the occupants of the rental property shall be written down on the leasing agreement. If the tenant happens to be a couple, both their names should appear. This translates to both being liable as tenants. The landlord can collect the rent payment from any one of them. If one fails to pay the rent, the other half of the couple is accountable to pay. If one commits a violation, both are subject to eviction.

2. Limits on occupancy

Subletting can be a popular strategy for some tenants to save further on rent costs. By covering a limit on occupancy, you automatically impose an authorization before a tenant sublets the rental unit.

Otherwise, your detailed tenant screening is useless. You won't be able to check the background of the other occupants moving into your rental space. This is a protective condition to specify and clarify the actual identity of the tenants in your rental.

3. Term of the tenancy

Different terms apply in residential leasing agreements depending on the parties' decision. It can be a month-to-month rental arrangement that auto renews if no written notice is provided. It can also be a fixed term rental arrangement where the tenant is bound to stay for a year. Typically, leases last for a year before being subject to a renewal.

4. Rent details

To make things simpler, a landlord can lay out all details in the lease such as:

  • The amount of rent that's to be paid
  • The rent due date (normally this is at the start of the month)
  • The channel of payment (electronic fund transfer, via the office or by mail)
  • The method of payment (by check or bank transfer)
  • Late fees to be collected in case the rent payment is delayed (if this is permitted)
  • Grace period for the late payment (if this is allowed)
  • Additional fees for bounced checks

5. Applicable deposits and fees

Conflicts can be avoided when conditions regarding the security deposit are specific on the residential leasing agreement. Here are things that should be stated:

  • The exact figure of the security deposit to be collected from the tenant (review state laws for compliance on the maximum limit of the deposit amount)
  • The deductions that will affect the security deposit such as repair fees for property damages

  • The limitations of using the security deposit to cover for the tenant's last month of rent
  • The period that the security deposit will be refunded back to the tenant (review state law guidelines since some require 3 weeks while others are more lenient, providing 30 days)
  • The method of refunding the security deposit after deductions are made during the end of tenancy
  • The non-refundable fees paid by the tenant such as pet fees (review state laws since some don't permit non-refundable fees)
  • The storage method and location of the security deposit (as prescribed by some state laws)
  • The interest rate of the security deposit if it's stored in an interest-bearing account (as prescribed by some state laws)

6. Repairs and maintenance of the rental unit

The issue on repairs and maintenance is where most discord occurs between a landlord and the renter. This is why it's essential to outline both parties' duties when it comes to the rental property's upkeep. These are the things that should be covered in the residential leasing agreement on the topic of maintenance:

  • What is expected from a tenant in terms of maintaining the cleanliness and sanitary practices in a rental unit? Any deviation from the responsibility will incur damage fees if the tenant is guilty of neglect in performing the duty.
  • What is required of the tenant to report when it comes to the state of the property? This should also include the process for submitting a repair request/complaint and how the procedure is conducted.

  • What restrictions a tenant must abide in case of altering the property's decors, repainting the unit or installing bulky appliances? It should state that a written request must be submitted before any changes are conducted in the rental home.

7. Access to the rental property

In observance with a tenant's right to privacy, the residential leasing agreement must include when a landlord can access the rental unit legally. In cases of emergency, it's naturally accepted that a landlord may enter the premises. For housing repairs, an advanced written notice is normally required before being allowed free entry to the property.

8. Restrictions on tenant illegal activity

Tenants can be guided on what type of behavior is required from them. In the leasing agreement, the landlord's policies should be specific. It should cover what constitutes excessive noise so respect is always fostered in the rental place. It's also advisable to outline illegal activity by defining criminal acts to warn renters from engaging in them.

9. Pet permission

The residential lease agreement should state if a pet is allowed in the property. If it's not mentioned, it can be taken as a non-issue for tenants. However, if the rental space is pet friendly, then a pet addendum can be attached.

Otherwise, the residential agreement should include details such as the pet type, size and number that are allowed per renter. Additionally, the pet-owning renter will also be informed of the responsibilities to be taken in relation to pet ownership.

Next Post Previous Post