A lease agreement is a binding contract used by landlords for renting property to tenants in exchange for monthly rent. The tenant will have rights of possession of the property after the lease begins and may only be vacated either at the end of the term or if they violate any of the lease provisions.
Rental Application – To be used by a landlord seeking to screen a tenant before signing a lease.
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
Commercial Lease Agreement – For any type of non-residential use such as retail, office, industrial space.
Condominium Lease Agreement – For a residential unit located in a condominium association.
Equipment Lease Agreement – To rent tools or heavy machinery.
Month-to-Month Lease Agreement – Also known as a “tenancy at will” and continues until either the landlord or tenant gives notice (usually 30 days required).
Rent-to-Own Agreement (Lease-Option) – A standard lease that allows a tenant to purchase the property under predetermined terms and conditions.
Roommate Agreement – To rent a room in an apartment or house.
Simple (1-Page) Lease Agreement – Simple agreement between a landlord and tenant.
Standard Residential Lease Agreement – Fixed term agreement usually for one (1) year.
Sublease Agreement – When a tenant has a lease and re-rents the same space to someone else.
Short Term / Vacation Lease Agreement – For short-term stays.
Weekly (Week-to-week) Rental Agreement – For rentals that can be terminated by giving seven (7) days’ notice.
A lease is a contract between a property owner or manager that rents space to an individual or company seeking to occupy it for rent. There are many types of leases with the most popular being a fixed one (1) year term that does not allow either party to terminate until the end date.
- Tenant undergoes a credit check through a Rental Application (Adobe PDF);
- Security Deposit (see laws);
- Move-In Checklist (Adobe PDF); and
- State Disclosures (if any).
Before a lease can be signed, a tenant must be shown the property, negotiated with, and screened to know their credit and background. Below are the steps that should be followed to lease a property from start to finish.
- Step 1 – Marketing/Finding a Residence
- Step 2 – Schedule a Showing
- Step 3 – Screening the Tenant
- Step 4 – Approving or Rejecting the Tenant
- Step 5 – Negotiating
- Step 6 – Signing the Lease
- Step 7 – Taking Occupancy
- Step 8 – Paying Rent
- Step 9 – Renewing/Terminating the Lease
- Step 10 – Returning the Security Deposit
Depending on the location, the landlord should begin marketing the property by posting online and in any local classified publications. In 2017, 37%1 of the US population (43.7 million) were renters and 83%1 of them used the web to find a rental. In addition, 31%2 of renters felt the largest issue in their search was finding accurate information about a particular property.
Therefore, it is important to disclose all details of the property while taking clear photos of each part of every room.
Property for Rent (top 5 websites)
When a tenant asked to view the property, it’s best to make a time that is when the current tenant is not home and that the premises are clean. It’s also recommended that the property is shown during the day advised to promote as much outside light as possible.
- Move-in Date – Before setting up an appointment, ask the potential tenant their move-in date. Many tenants start their search too early and should only meet with tenants if they are looking to rent within 60 days.
- Rental Application – At the showing, make sure to obtain the applicant’s information and consent to run a credit and background check.
After obtaining the tenant’s credentials through the application it’s time to run a credit and background check to ensure creditworthiness. There is a cost to any background check, between $15 to $45, and is usually passed on the applicant.
Screen a Tenant (top 5 websites)
Income Verification – In addition, it is helpful to obtain the last two (2) years of tax returns (IRS Form W-2) and the last two (2) weeks’ paystubs. If the applicant is self-employed then to have the last three (3) months’ bank statements.
Landlord References – The best reference is always past landlords. Be sure to contact the applicant’s current or previous landlord to ask if they paid rent on time, if they are a loud or quiet tenant, and if they left any damage on the premises.
After reviewing the tenant’s credit report, criminal history, and verifying references it’s time to make a decision: (choose one)
If approved, the tenant will go on to negotiate and sign a lease agreement in the next steps.
If rejected, the landlord will be required to send the applicant an adverse action (rejection) letter stating the reasons for refusal and where they can get a copy of their credit and background check.
After the landlord is aware of the tenant’s financial background, it’s time to negotiate. The monthly rent is the most common item that is debated and if they did not attempt to negotiate at the time of applying, they probably will not request a discount.
If the tenant has bad credit the landlord can request the following:
- Additional Security Deposit – In accordance with State laws.
- Increased Monthly Rent – Due to the elevated risk of a tenant with bad credit, some landlords may increase the monthly rent.
- Pre-Pay Rent – In case the tenant loses their job or income. This is always applied to the last months of the lease, not in the beginning.
- Request a Co-Signer – This requires the tenant to find someone else to act as a “guarantor”. A guarantor agrees to pay for any unpaid debts or damage by the tenant in the chance of defaulting on their lease. Use the Guarantor Addendum.
After writing the lease (see How to Write) it’s time for the landlord and tenant to get together and sign with the real estate agent (if any). Furthermore, it is recommended for any lease for it to either be signed with at least one (1) witness or a notary public. If the landlord or tenant would rather electronically sign, the lease can be uploaded via our Homepage and sent to the other party.
After the lease has been signed, all payments including the security deposit, 1st month’s rent, and any other fees must be paid to the landlord. Upon successful payment, the landlord will issue access to the tenant in the form of keys, fabs, or access codes. All entries must be given to the tenant including any common areas or mailboxes.
During the course of the lease, the tenant will be obligated to pay rent on a monthly basis. It is recommended to convert tenants to pay online or automatically via ACH. In a 2019 study3, consumers made 74% of their transactions with non-cash payments and 85%4 of tenants that pay rent online successfully pay rent the next month. Therefore, it’s best to obtain the tenant’s ACH details or use an online service to collect rent on behalf of the tenant.
Accept Rent Online (top 5 websites)
- Cozy.co (Free ACH, 2.75% cc fees)
- Zillow (Free ACH, 2.95% cc fees)
- Avail.co ($2.50 ACH, 3.50% cc fees)
- RentPayment.com ($4.95 ACH, 2.95% cc fees)
- PayYourRent.com ($2.50 ACH, 2.75% cc fees)
At the end of the lease term, the landlord and tenant must decide whether to move-out or renew the lease. If renewing, the landlord can send the tenant a Lease Extension Amendment that keeps all the terms of the current lease while extending the date. If the landlord decides to change any other terms, such as increasing the rent, it can be added as well.
If the tenant decides to move out of the property or the landlord decides to not renew the lease, the landlord will send a Notice Not to Renew Letter that will inform the tenant to vacate the premises on the lease end date.
After the tenancy has completed, the landlord will be required to return the deposit paid at the beginning of the lease term in accordance with State Security Deposit Laws. The deposit must be returned to the tenant, less any damage left on the property, to the forwarding address given by the tenant.
If the landlord deducts any amount from the security deposit, an itemized list of the damages must be given to the tenant.
The following are the state by state security deposit laws with accompanying sources:
|Alabama||1 month’s rent||60 days after the lease terminates||§ 35-9A-201|
|Alaska||2 months’ rent||14 days if proper notice is given; 30 days otherwise||§ 34.03.070|
|Arizona||1.5 months’ rent||14 days after the lease terminates (does not include holidays/weekends)||§ 33-1321(D)|
|Arkansas||2 months’ rent||60 days after the lease terminates||§ 18-16-305(a)|
|California||2 months’ rent unfurnished; 3 months’ rent furnished||21 days after tenant(s) move out||§ 1950.5|
|Colorado||No limit||1 month; up to 2 months if stated in the lease||§ 38-12-103(1), § 38-12-104|
|Connecticut||2 months’ rent if younger than 62; 1 month’s rent if older||15 days after receiving tenant’s new mailing address, or 30 days after lease termination (whichever is later)||§ 47a-21|
|Delaware||1 month’s rent for 1-year leases only||20 days after the lease terminates||§ 5514|
|Florida||No limit||15 days if no deductions, otherwise 30 days||§ 83.49(3)(a)|
|Georgia||No limit||30 days after tenant(s) move out||§ 44-7-34(a)|
|Hawaii||1 month’s rent (not including pet fee)||14 days after the lease terminates||§ 521-44(c)|
|Idaho||No limit||21 days if not stated in the lease; 30 days otherwise||§ 6-321|
|Illinois||No limit||30 days if deductions; 45 days otherwise||765 ILCS 710|
|Indiana||No limit||45 days after the lease terminates||§ 32-31-3-12|
|Iowa||2 months’ rent||30 days after the lease terminates||§ 562A.12(3)(a)|
|Kansas||1 month’s rent unfurnished; 1.5 months’ rent furnished||30 days after the lease terminates||§ 58-2550(b)|
|Kentucky||No limit||60 days after the lease terminates||§ 383.580|
|Louisiana||No limit||1 month after the lease terminates||§ 3251|
|Maine||2 months’ rent||30 days for fixed-term lease, 21 days for periodic leases||§6032, §6033|
|Maryland||2 months’ rent||45 days after the lease terminates||§ 8-203|
|Massachusetts||1 month’s rent||30 days after the lease terminates||Ch. 186 §15B|
|Michigan||1.5 months’ rent||30 days after the tenant(s) move-out||§554.602, §554.609|
|Minnesota||No limit||3 weeks after the lease terminates||§ 504B.178|
|Mississippi||No limit||45 days after the lease terminates||§ 89-8-21|
|Missouri||2 months’ rent||30 days after the lease terminates||§ 535.300|
|Montana||No limit||30 days if deductions, 10 days otherwise||§ 70-25-202|
|Nebraska||1 month’s rent (not including pet fee)||14 days after the lease terminates||§ 76-1416|
|Nevada||3 months’ rent||30 days after the lease terminates||NRS 118A.242|
|New Hampshire||1 month’s rent / $100 (whichever is greater)||30 days after the lease terminates||§ 540-A:6 & § 540-A:7|
|New Jersey||1.5 months’ rent||30 days after the lease terminates||§ 46:8-21.2 & § 46:8-21.1|
|New Mexico||1 month’s rent||30 days after the tenant(s) move-out or the lease terminates||§ 47-8-18|
|New York||1 month’s rent||14 days after the tenant(s) move-out||576/74 § 6, § 7-108(e)|
|North Carolina||2 months’ rent (1.5 months rent for leases at will)||60 days if deductions, 30 days otherwise||§ 42-51, § 42-52|
|North Dakota||1 month’s rent (2 months’ rent for pets)||30 days after the lease terminates||§ 47-16-07.1|
|Ohio||No limit||30 days after the lease terminates||§ 5321.16|
|Oklahoma||No limit||45 days after the lease terminates||§ 41-115|
|Oregon||No limit||31 days after the lease terminates||§ 90.300(13)|
|Pennsylvania||2 months’ rent||30 days after the tenant(s) move-out or the lease terminates||§ 250.511a, § 250.512|
|Rhode Island||1 month’s rent||20 days after the tenant(s) move out or the lease terminates||§ 34-18-19|
|South Carolina||No limit||30 days after the tenant(s) move-out or the lease terminates||§ 27-40-410|
|South Dakota||1 month’s rent||45 days if deductions, 14 days otherwise||§ 43-32-6.1, § 43-32-24|
|Tennessee||No limit||30 days after the tenant(s) move-out, or 7 days after a new tenant moves-in||§ 66-28-301(g)(1)|
|Texas||No limit||30 days after the tenant(s) move-out||§ 92.103(a)|
|Utah||No limit||30 days after the tenant(s) move-out||§ 57-17-3(2)|
|Vermont||No limit||60 days if the unit is a seasonal/vacation rental, 14 days otherwise||§ 4461(c)|
|Virginia||2 month’s rent||45 days after the lease terminates||§ 55-248.15:1(A)|
|Washington||No limit||21 days after the tenant(s) move-out||§ 59.18.280|
|West Virginia||No limit||45 days if the property is re-rented, 60 days otherwise||§ 37-6A-1|
|Wisconsin||No limit||21 days after the lease terminates||§ 134.06(7)|
|Wyoming||No limit||15 days after the landlord receives the tenant’s new address, or 30 days from lease termination (whichever is lesser)||§ 1-21-1208|
The following are three (3) mistakes commonly made by landlords during the leasing process:
1. Negotiating BEFORE the Rental Application
Until the landlord conducts a thorough background check of the tenant, there is no reason to begin the negotiating process on either side without knowing the financial background of the tenant.
2. Move-in Date Beyond 45 Days
The landlord should never agree to a move-in date beyond forty-five (45) days. Otherwise, the landlord runs the risk of losing more than a month’s rent.
3. Not Requiring the Tenant’s Social Security Number (SSN)
Due to the rise in identity theft, landlords have been hesitant to require the tenant to write their social security number on the rental application. This must be a requirement in order to view all available public records on an applicant.
How much does a Real Estate Agent get paid?
A real estate agent is paid the amount due as stated in their listing agreement. This may either be from the agent representing the landlord or tenant. For rental properties, this is commonly between 10% to 15% of the lease term (usually 12 months) multiplied by the monthly rent.
If there is co-agency, both agents will share the commission amount.
Does a residential lease need to be witnessed or notarized?
While doing so can help prove the validity of the lease, doing so is not required.
What is Prorated Rent?
Prorated rent is when the landlord only charges their tenant for the portion the tenant actually spent living in the rental. It is most commonly done when a tenant is moving in or out in the middle of the month. The easiest way to calculate this is by multiplying the monthly rent by twelve (12), dividing it by 365, and then multiplying the result by the number of days the tenant will be occupying the unit (out of a month).
Example: If the tenant will be living in the rental for only ten (10) days out of thirty (30) and their monthly rent is $1,200, the calculation would be:
(($1,200 X 12) ÷ 365) X 10 = $394.52
- Prorated Rent Calculator: www.jsjsss
Note about colors:
- Red – Mandatory information. The landlord must complete all red sections.
- Yellow – Information that is optional, or is only required if a certain checkmark is selected.
- Blue – Also optional information. Used in conjunction with yellow to show varying options
Step 1 – The Parties
This section breaks-down who the Landlord and Tenant(s) are, as well as specifies the date the contract is being drafted. The landlord will need to enter the following in this section:
- The date in which the lease is being completed (the current date).
- Full name of the landlord
- Landlord’s address (include the street, city, state, and ZIP code)
- The name(s) of the Tenant(s). Up to four (4) spaces provided.
Step 2 – Lease Term
In this area, the length of the lease is specified. The landlord can choose one of two (2) options for the length of the lease. The first option is “Fixed-term”, which refers to the lease being established for a pre-determined length of time. A “Periodic lease” is a type of contract that has no end-date, and renews automatically on a monthly or weekly basis until either party wishes to terminate it.
If “fixed-term” is chosen, the landlord will need to enter the number of years or months the lease will go on for, the beginning date of the lease (day, month, and year), and the end-date of the lease.
If “Periodic lease” is selected, start by selecting whether it will go on for a month-to-month or week-to-week basis. Then, enter the start date of the lease followed by the number (#) of days either party has to give in order to terminate the contract.
Step 3 – Property
Enter the full address of the rental property followed by the type of rental it is (apartment, condo, home, etc.).
Step 4 – Occupants
If the tenant will have additional occupants into the rental (other family members, for example), the first (1st) checkbox should be checked, and the name(s) of the other occupants should be written on the line provided. If the tenant will not be introducing other occupants into the rental, check the second (2nd) box.
Step 5 – Rent
In the first line, enter the amount of money the tenant(s) will be required to pay each month. This is separate from utility expenses that the tenant(s) may be responsible for. Then, enter the day of the month rent is due. This is typically the first (1st) of every month. On the lower line, specify how the tenant should go about paying rent. Examples: “Mail via check to [Address]” or “send via Cozy”.
Step 6 – Rent Pre-Payment
If the tenant will be pre-paying rent to the landlord (and the landlord accepts it), the second (2nd) box should be checked. Write the amount of money the tenant will be paying in advance. Enter the number of days the pre-paid rent is equivalent to, followed by the starting and end-dates the pre-paid rent covers.
Important note: Many states consider rent that is received upfront to be a security deposit. Because many states restrict security deposits to one (1) or two (2) months of rent, the landlord could be breaking rental laws by accepting pre-paid rent on top of a security deposit.
Step 7 – Furnishings
If the rental isn’t furnished, check the first box. If it is furnished (sofa, tables, chairs, rugs, etc.), check the second box and specify the item(s) that are in the rental unit.
Step 8 – Late Fee
A late fee is a fee that is imposed on tenants that are late on their rent. If the landlord intends on charging tenant(s) for late fees, the second (2nd) box should be checked. Then, enter the number of days that must go by before a late fee can be issued, followed by the monetary amount ($) of the late fee.
Step 9 – Returned Checks
A “returned check” occurs if a tenant’s check bounces due to insufficient funds in their bank account. To prevent this from occurring, the landlord can charge a fee. If they want to charge a fee, select the second checkbox, and enter the dollar ($) amount of the fee per returned check. If the landlord doesn’t want to issue fees for returned checks, the first box should be selected.
Step 10 – Utilities
Any and all utilities paid by the landlord should be written in this section. Any fees not included will be the tenant’s responsibility.
Step 11 – Appliances
Any appliances included in the rental should be written. If no appliances are included, check the box below the line.
Step 12 – Parking
If the tenant(s) are provided specific, reserved parking space(s), check the first box and enter the number (#) of spaces allotted. Then, check the box corresponding to whether or not the parking spot(s) cost additional money. Regardless of the option chosen, a description of the parking space(s) should be written in the space provided.
Section 13 – Security Deposit
Enter the dollar ($) amount of security deposit the tenant(s) are required to pay at the start of the lease. Enter the full-value of the deposit, not the amount each tenant would be required to pay. Specify the number of days the landlord has to return the deposit (less any deductions) at the end of the lease.
Step 14 – Notices
Due to notices being important documents, both parties should have specific addresses in which notices should be delivered to. Enter each party’s address for receiving notices.
Step 15 – Move-in Inspection
If the parties will be completing a move-in inspection together, check the second box. Otherwise, check the first box.
Note: Conducting a move-in inspection is highly recommended to avoid charging the tenant(s) for the damage they didn’t cause.
Step 16 – Sale of Property
In the event the owner of the property sells the rental, the landlord can specify whether the new owner would have the power to terminate the rental agreement (check the second box), or would not have the power to end the lease (check the first box). If the landlord decides the new owner could end the agreement, the number (#) of days notice the new owner would need to provide needs to be entered.
Step 17 – Smoke Detectors
How many days the tenant(s) have to verify all smoke detectors in the rental are working. A mandatory field.
Step 18 – Pets
This field is very important, as pets have the means of being a very large liability for landlords. If pets will not be allowed on the premises, the first box should be checked. If one (1) or more pets will be allowed, the second box should be selected. The landlord will then need to enter the number (#) of pets that are allowed in the rental and exactly what types of pets are allowed. Then, the landlord will need to specify whether an additional charge will be added if the tenant(s) intend to keep pets. If they decide to add an additional fee, they will need to check whether it is refundable or not (at the end of the lease) and the amount ($) of the fee itself.
Step 19 – Smoking
If smoking is permitted in certain areas on the premises, check the second (2nd) box and specify exactly where tenants can smoke. If smoking isn’t allowed, check the first box.
Step 20 – Agent / Manager
If the landlord has an agent or manager that speaks to tenants in their place, the first box should be checked and the agent’s name, phone, and email should be entered. If there will be no manager, check the second box.
Step 21 – Governing Law
Enter the state in which the rental is located.
Step 22 – Lead-Based Paint
If the property was built prior to 1978, check the second box. The landlord will need to complete the attached document “Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards”. If the property was built after 1978, check the first box.
Step 23 – Additional Provisions
If there are any additional sections the landlord wishes to include in the agreement, they can be written on the three (3) lines provided. Alternatively, the landlord can attach an additional document if more room is required.
Step 24 – Signatures
At a minimum, the landlord and one (1) tenant need to sign the lease. The lease provides space for up to four (4) tenants, one (1) landlord, and one (1) agent / broker. Each individual signing needs to write (or eSign) their name, enter the date, and print their name legibly.