A standard residential lease agreement is a binding contract formed between a landlord and a tenant over the rental of a property for an average length of one (1) year. The agreement sets out a list of requirements that both parties agree to follow for the full length of the lease, covering topics such as rent payments, utilities, security deposits, guests, pets, moving-out, and more.
Rental Application – Allows a landlord to screen a potential tenant before signing a lease.
By Type (4)
Apartment Lease Agreement – For renting out duplex, triplex, studio, loft, and other apartment-styles.
Condominium Lease Agreement – Allows condo owners a means of easily leasing their unit(s) when they are not in use.
Home Lease Agreement – For leasing out an entire home to one (1) or more tenants.
Realtor Lease Agreement – The official versions used by Realtors, specific to each state.
Download: Adobe PDF
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
What is a Residential Lease?
A residential lease is a contract used for providing legal protection for a landlord (lessor) and tenants (lessees). Landlords require tenants to sign a lease to have physical proof that the tenant(s) agreed to pay rent to the landlord for a certain amount of time. Without a lease agreement, it would be difficult for a landlord to hold the tenant(s) liable for paying rent, repairing tenant-caused damage, and other responsibilities.
On the other hand, the agreement protects tenants from being taken advantage of by landlords, ensuring they have access to a safe and habitable rental, are not disturbed by neighboring tenants (or the landlord themselves), and are guaranteed their right to live in the rental for the length of time specified on the contract. It’s important to remember that tenants are often protected by the state’s landlord-tenant laws. While each state is different, these laws ensure tenants have the right to terminate the agreement if the rental is unsafe to live in (for example).
Who Needs a Residential Lease Agreement?
Anyone that allows another person or entity to live in a space they own in exchange for monetary payment should use a lease agreement. This applies regardless of whether or not the owner knows the tenant(s) personally. A lease should be used by:
- Landlords and property management companies;
- Homeowners looking to lease their property for part of the year; and
- Those looking to rent to friends and family.
Important Lease Clauses
- Abandonment Clause
- Arbitration Clause
- Automatic Renewal Clause
- Breaking the Lease (“Early Termination”)
- Guarantor Clause
- Escalation Clause
- Military Clause
- No Smoking Clause
- Pet Clause
- Sale of Property Clause
- Security Deposit Clause
- Sublease Clause
- Waterbed Clause
An abandonment clause allows landlords to remove a tenant’s possessions in the event the tenant has “disappeared” from the premises without providing notice to the landlord. It’s important that the state laws are consulted to ensure an abandonment clause is enforceable before using.
“If, without notifying the Landlord, Tenant is absent from the Premises for seven (7) days while rent is due and Tenant’s possessions have not been removed from the Premises, Landlord shall have the right to terminate this Agreement immediately and remove all belongings including any personal property off of the Premises.”
Arbitration is a process of dispute resolution in which the parties to the lease have a third (3rd) party make a binding decision regarding a dispute they have with one another. By using arbitration, the parties avoid going to court, which is often a costlier, more time-consuming process. The process shouldn’t be confused with mediation which is the act of having a third (3rd) party facilitate conversation between the parties, the major difference being that the mediator cannot make a binding decision (where an arbitrator can).
“All claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration in the state of _________ or another location mutually agreeable to the parties. An award of arbitration may be confirmed in a court of competent jurisdiction.”
An automatic renewal clause (also known as an “Evergreen clause”) causes the lease agreement to renew for a certain length of time (typically the same term as the original lease) once the lease expires. If the landlord or tenant(s) do not provide the other party adequate notice of their intent to terminate the lease, they will automatically be bound to a new lease agreement. This clause does not just bind tenants – if the landlord forgets about the clause and expects the lease to terminate upon the date listed on the contract, they have no choice but to re-lease the rental to the tenant(s) for another term (potentially locking-in tenants to a below-the-market rate).
“The initial term of this Agreement shall be one (1) year commencing as of the date hereof. Thereafter, the term of this Agreement shall automatically renew for successive one (1) year terms unless one party provides written notice to the other party at least thirty (30) days in advance of the end of the then-existing term stating they do not wish to renew the term of this Agreement.”
While a landlord hopes to never need this clause, it should be included to ensure the parties understand the steps they need to take if they want to “break” the lease legally. This provides the landlord with a means of collecting unpaid rent until a new suitable tenant is found.
“The Tenant ___ Shall ___ Shall Not have the right to terminate this Agreement at any time by providing at least ___ days’ written notice to the Landlord along with an early termination fee of $______ (US Dollars). During the notice period for termination, the Tenant will remain responsible for the payment of rent.”
The term “guarantor” is often used in conjunction with “cosigner”, although the two aren’t exactly the same. A guarantor is an individual that is responsible for making rent payments if the tenant is unable to, whereas a co-signer is typically a tenant on the lease that is responsible for making rent payments if the other tenant is unable to. While not necessary on every lease, it is recommended landlords use the clause for tenants they deem as a “financial risk” after conducting screening checks.
In addition to the clause below, the landlord should have the guarantor sign a separate guarantor agreement.
“Guarantor. In the event the Agreement is guaranteed, the person(s) guaranteeing the Agreement (“Guarantor”) hereby absolutely guarantees Tenant’s obligations and performance under the Lease. Guarantor further agrees to be bound by the same covenants and conditions of the Lease and hereby makes the same warranties and representations as Tenant hereunder. If Tenant defaults in the performance of its obligations under the Lease, Guarantor will perform said obligations.”
An escalation clause, more commonly known as a “rent escalation clause”, allows the landlord to adjust the rate of a tenant’s rent on a specific timeline. This ensures the landlord has a means of keeping the rental on-pace with rental market rates. Increasing the rate on a percentage basis is recommended.
“Beginning on the first twelve (12) month anniversary of the Start Date of the Agreement and on each succeeding anniversary date hereafter for the Term of the Agreement and any renewals or extensions thereof, the rental rate for the Premises shall increase three percent (3%) per year over the rate charged for the preceding one (1) year term.”
Tenants that are in the military have a right to break a lease in the event they are called upon for active duty. However, landlords are allowed to include a clause that requires the tenant to provide a notice of at least thirty (30) days after the last rental payment. As an example, assuming the tenant received orders on the 12th of March requiring them to leave in a month and they gave their notice to the landlord that same day, they’d be obligated to pay rent through the 30th of June.
“In the event the Tenant is or hereafter becomes a member of the United States Armed Forces on extended active duty and hereafter the Tenant receives permanent change of station (PCS) orders to depart from the area where the Premises are located, or is relieved from active duty, retires or separates from the military, is ordered into military housing, or receives deployment orders, then in any of these events, the Tenant may terminate this lease upon giving thirty (30) days written notice to the Landlord. The Tenant must provide the Landlord a copy of the official orders or a letter signed by the Tenant’s commanding officer, reflecting the change which warrants termination under this clause. The Tenant will pay prorated rent for any days in which he/she occupies the dwelling past the beginning of the rental period.”
A simple clause that either, denies, approves of, or restricts a tenant’s right to smoke on the rental premises.
“Smoking on the Premises ___ is ___ is NOT permitted on the Premises and common areas. If permitted, Tenant’s can smoke in the following areas ONLY: _________________.”
States whether or not the tenant(s) are permitted to have pet(s) on the Premises. If a landlord does permit a tenant to have a pet, they should require the tenant to pay an additional deposit for the pet due to the increased likelihood of pet-caused damage. This is often tacked-on to the security deposit. Landlords should check their state’s landlord-tenant laws to ensure a pet deposit can be collected.
“The Tenant shall have the right to have ___ pet(s) on the Premises, consisting of ____________ [Types of Pets Allowed] that are not to weigh over ____ pounds. For the right to have pet(s) on the Premises, the Landlord shall charge a fee of $___________ that is refundable unless there are damages related to the pet. The Tenant is responsible for all damage that any pet causes, regardless of the ownership of said pet and agrees to restore the Premises to its original condition at their expense.”
This clause comes into play in the event the rental property is sold while a tenant is currently leasing it. The clause is used to either allow the new owner permission to terminate the lease (so long adequate notice is provided) or restrict their ability to terminate the lease. Tenants’ will obviously prefer having the security in knowing their lease will be unaffected if a sale were to occur.
“In the event the Premises is sold, the Landlord is to notify the Tenant as to the name(s) of the new Owner and Manager (if applicable), and provide contact information for requesting repairs. The new Owner: 1) ___ Does NOT have the right to terminate the Agreement, or 2) ___ has the right to terminate the Agreement, so long the Tenant is delivered a notice ______ days’ in advance of the termination.”
One of the most commonly-used clauses in leases, a section covering security deposits should be used in every lease agreement. A security deposit is a monetary amount paid at the beginning of the lease by the tenant(s). Typically equivalent to one (1) or two (2) months of rent, the deposit is refunded to the tenant at the expiration of the lease so long the rental unit is left undamaged and the tenant(s) did not miss any rent payments.
“The Landlord requires a payment in the amount of $________ (“Security Deposit”) for the faithful performance of the Tenant under the terms and conditions of this Agreement. Payment of the Security Deposit is required by the Tenant upon the execution of this Agreement. The Security Deposit shall be returned to the Tenant within ____ days after the end of the Lease Term less any itemized deductions. This Security Deposit shall not be credited towards any Rent unless the Landlord gives their written consent.”
Landlords are highly advised to require their tenants to consult with them prior to subletting. This is because landlords make a significant effort in ensuring the tenants they lease to have been thoroughly vetted through the use of a rental application. If they allow their tenants to sublet freely, the landlord runs the risk of introducing a troublesome subtenant into their property.
“Tenant shall not be able to sublet the Premises without the written consent from the Landlord. The consent by the Landlord to one Subtenant shall not be deemed to be consent to any subsequent Subtenant.”
Although waterbeds were mainly a fixture of the ’80s, where they made up between twelve and fifteen percent (12-15%) of the entire bedding market, they can still be found today (albeit very rarely). A waterbed clause is a rather simple statement either permitting or denying tenant’s the right to use a waterbed. Why would a landlord not want their tenants to have a waterbed? Because the bed type is typically filled with hundreds of gallons of water, in the event they burst, significant amounts of damage can occur to the rental (and the floors/units below).
“Tenant shall not use or have waterbeds on the Premises unless authorized by a separate wirtten Waterbed Addendum to this Agreement.”
Frequently Asked Questions (FAQ)
Does a residential lease need to be notarized or witnessed?
Because lease agreements do not need to be recorded with a county clerk, there is no need to have them notarized. The same goes for witnesses, although some states such as Florida require leases that are longer than one (1) year to have the landlord’s signature witnessed by at least two (2) witnesses (§ 689.01).
How can I get out of a Lease Agreement?
A tenant can get out of a lease agreement for many ways, of which include the ability to
Can a landlord change the lease agreement?
No. Not unless 1) both the landlord and tenant(s) sign an amendment to the lease, or 2) the lease contains language that allows the landlord to change a certain aspect of the agreement on a whim, such as permitting subleasing.
Lease vs. Rental Agreement (Month-to-Month)
In short, a lease agreement is a binding contract that has a known beginning and end date, regardless if it’s for two (2) months, half a year, or five (5) years.
Rental agreements, more commonly known as “Month-to-Month Lease Agreements”, are contracts that automatically renew at the end of each month. This can continue on for years if neither party wishes to end the agreement. To end the contract, either party will need to provide a written notice to quit, typically thirty (30) days in advance.
Can a Lease be used for Renting out a Room?
Yes. Although a full-fledged residential lease is most likely overkill. A roommate agreement is all that is needed.