Rental Agreement

A Rental Agreement is a contract that sets down the terms to be followed while the tenant occupies a rental unit. The rental agreement, sometimes referred to as a lease agreement, gives the tenant the right to use and occupy rental property for a period of time.

Although a lease agreement can be an oral agreement, if the lease extends beyond one year, most states require that it be in writing. An oral rental agreement has the risk of misunderstandings over terms of the agreement, and potential problems for enforcement of terms between the landlord and the tenant. A rental agreement defines a tenancy for a short period of time, usually one month. When referring to a “month-to-month” rental agreement, it means that it is automatically renewed each month unless the landlord or the tenant gives the other the proper amount of notice (typically 30 days) and terminates the agreement. In a rental agreement, the landlord may increase the rent, change other terms of the tenancy or terminate it on relatively short notice (usually 30 days)–unless local rent control ordinances specify otherwise. Many landlords prefer to rent month-to-month, particularly in tight rental markets where new tenants can be easily found and rents are trending upwards. The downside is that month-to-month rental agreements almost guarantee more tenant turnover.

A lease obligates both the landlord and the tenant for a set period of time, usually one year. The landlord can’t raise the rent or change other terms until the lease runs out, unless the lease itself provides for modifications or the tenant agrees in writing to the changes. In addition, the landlord usually can neither ask the tenant to move out nor prevail in an eviction lawsuit unless the tenant fails to pay the rent or violates another important term of the lease or state law. At the end of the lease term, the landlord can either decline to renew it or negotiate to sign a new lease with the same or different terms. Landlords often prefer leases in areas where there is a high vacancy rate or where it is difficult to find tenants for certain seasons of the year–for example, in college towns that are often deserted in summer.

If you interested in writing your own rental agreement or lease agreement, you want to make sure you follow some basic rules. It should be thorough and also be legal. Be sure your lease or rental agreement complies with all relevant laws including rent control ordinances, health and safety codes, occupancy rules and anti-discrimination laws. State laws are very important, setting security deposit limits, notice requirements for entering rental property, tenants’ rights to sublet or bring in additional roommates, rules for changing or ending a tenancy, specific disclosure requirements such as past flooding in the rental unit and more. Check with your state’s landlord-tenant statutes for details.

Here are some of the most important items to cover:

Include the names of the landlord and the names of the tenant (and often the names of others who will occupy the rental property). Including the names of all the adults that occupy the property makes each tenant legally responsible for all terms, including the full amount of the rent and the use of the property.

A description of the rental property subject to the lease agreement, includes type of property and detailed addresses.

Term of the agreement. Month-to-month rent agreement, one year lease agreement, etc.

The rental fees that the tenant must pay the landlord, and the payment schedule.

Details on the security deposit (dollar amount, how the deposit may be used or not used – such as for the last months rent, whether it is held at interest, when it will be returned at the end of the lease, etc.)

Default – what will happen in the event of failure of either party to live up to the terms of the agreement? Default can occur when the tenant fails to pay rent or the landlord to keep the rental property in condition suitable for living.

Define if the tenant must pay the landlord a late fee if the rent is not paid on time (or if a cheque is returned for non sufficient funds).

Specify if the tenant may operate a business out of the rental property (where local zoning ordinances at the particular rental property allow such activities).

Whether the tenant will be in default in the event that the tenant disturbs other tenants’ “right of quiet enjoyment”.

The respective duties of the landlord and tenant regarding the maintenance of the rental property. For example, the tenant’s obligation to keep the property clean and sanitary, restrictions on repairs and alterations, paymen for damage caused by abuse or neglect, etc.

Defining what will happen at the end of the term (period) of the agreement. Is there an option to renew? What is the tenant option for termination? etc.
Clarify the rights to access to the property for repairs, etc. How much advance notice landlord should provide the tenant before entering.

Pets, smoking, etc. – are they allowed in the premises? Specify in detail what is allowed and where permission is needed from the landlord, etc.

Although there are many pre-printed lease forms, both the landlord and the tenant have the right to change the particular terms and conditions of the pre-printed lease. Lease forms, like all contracts, may be subject to negotiation between a prospective tenant and a landlord. SmartFormz lease and rental agreements contain all of the options the landlord and tenant can agree upon and are flexible enough to change according to your specific needs and requirements.

Lease agreements and rental agreements can include many legal provisions. The examples above represent some of them. The lease agreement may not preclude any rights in the Landlord/Tenant Act. The agreement can not limit any legal liability of the landlord or tenant; any clauses which limits legal liability may be unenforceable.

State and local laws can govern the terms of a lease. For example, state law often requires that the landlord must provide an “implied warranty of habitability”. Some local jurisdictions have enacted laws regarding “rent control” which governs how much the rent may be increased at the end of any given lease term.

An example of illegal provisions can be any clause that protects the landlord from liability for the consequences of his own negligence. A penalty for late rent may not be larger than the landlord’s reasonable expected damages. Stating that the tenant will lose the whole deposit no matter what.

If you need any further details, or you are not sure what other provisions are associated with a good lease agreement, please contact a local lawyer.

To create a lease agreement using our step-by-step form wizard, please proceed to the question page. It is an easy to use process, taking you through three pages of simple questions that changes based on the answers you provide. At the end of the process, you will be able to preview a draft of the agreement, based on the answers and requests you filled out; you can change them again and again until you get the best results that fit your special needs. The cost of our agreements are usually less than $20. To proceed to the questionnaire page, please click here.

To look for other agreements we provide, please visit our forms page.