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Residential Lease Agreement Template

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A standard residential lease agreement is a binding contract formed between a landlord and a tenant in regard to a property rental with (typically) a one (1) year lease. The agreement establishes 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, and moving out.

By State


By Type (4)

Apartment Lease Agreement – For renting out duplex, triplex, studio, loft, and other apartment types.

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Condominium Lease Agreement – Allows condo owners a means of easily leasing their unit(s) when they are not in use.

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Home Lease Agreement – For leasing out an entire home to one (1) or more tenants.

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Realtor Lease Agreement – The official versions used by Realtors; specific to each state.

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Contents


What is a Residential Lease?

A residential lease is a contract used to provide legal protection for a landlord (lessor) and tenants (lessees). Landlords require tenants to sign a lease to have physical proof that the tenant agreed to pay rent to the landlord throughout the term of the rental arrangement. Without a lease agreement, it would be difficult for a landlord to hold the tenant liable for rent payments, damages, and other obligations.

On the other hand, the agreement protects tenants from being taken advantage of by landlords. Because a lease is a legal contract, it ensures the tenant has access to a safe and habitable rental, neighbors (and even the landlord) won’t disturb them, and they have the right to live on the property for the length of the lease term. Each state has their own landlord-tenant laws, but all of these laws protect the tenant’s right to a peaceful living situation.

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 personally. A lease should be used by:

  • Landlords and property management companies.
  • Homeowners looking to lease their property for part of the year.
  • Those looking to rent to friends and family.

Important Lease Clauses

Abandonment 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 it.

Arbitration Clause

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).

Automatic Renewal Clause

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 does 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 for another term (potentially locking in tenants to a below-the-market rate).

Breaking the Lease (“Early Termination”)

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.

Guarantor Clause

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.

Escalation Clause

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.

Military Clause

Tenants that are in the military have a right to break a lease in the event they are called up 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 to the 30th of June.

No Smoking Clause

A simple clause that either denies, approves of, or restricts a tenant’s right to smoke on the rental premises.

Pet Clause

States whether or not the tenant is permitted to have pets 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.

Sale of Property Clause

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 (as long as 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.

Security Deposit Clause

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 amount of money paid at the beginning of the lease by the tenant. Typically equivalent to one (1) or two (2) months’ of rent, the deposit is refunded to the tenant at the expiration of the lease as long as the rental unit is left undamaged and the tenant did not miss any rent payments.

Sublease Clause

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.

Waterbed Clause

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 the tenant the use of a waterbed. Why would a landlord not want their tenants to have a waterbed? Because the bed is typically filled with hundreds of gallons of water and significant damage can occur to the rental (and the floors/units below) if it bursts.


Frequently Asked Questions

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).

Can a landlord change the lease agreement?

No. Not unless both the landlord and tenant sign an amendment to the lease or 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, such as two (2) months, half a year, one (1) 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 to the other party.

Can a Lease be used for Renting out a Room?

Yes; however, a standard residential lease is probably overkill. A roommate agreement is a better option.