A standard residential lease agreement is a predetermined rental contract specifying tenancy terms and outlining the responsibilities of both the landlord renting the property and the tenant who will occupy it. This document specifies the rent amount, payment schedule, security deposit details, and consequences for late rent payments.
Beyond financial aspects, it establishes guidelines for maintenance, outlines conditions for terminating the lease, addresses potential property damage, and provides rules governing subletting or modifications to the premises.
Landlords and property managers should conduct a diligent tenant screening process to select the best tenants for the property. This involves two critical steps:
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- What Is a Residential Lease?
- What to Include in a Standard Residential Lease Agreement
- Fixed Lease vs. Month-to-Month Lease
- How to Negotiate a Standard Residential Lease
- What Happens When a Residential Lease Agreement Ends?
- How to Write a Standard Residential Lease Agreement
- Standard Residential Lease Agreement Sample
- Frequently Asked Questions
What Is a Residential Lease?
A residential lease is a legal contract between a landlord and tenant for the rental of residential property. The landlord agrees to rent the space to the tenant in exchange for payment of rent. Typically, the rent is paid monthly, and the lease agreement lasts one year.
The lease ensures the landlord can collect consistent rental income and the tenant’s right to occupy and use the premises per the agreement’s defined terms, creating a structured and legally binding relationship.
The document serves as a conclusive record for both parties, minimizing disputes by outlining clear terms. This mutual understanding ensures both parties know their duties and responsibilities, encouraging a transparent rental relationship.
Residential properties are intended for personal living, unlike commercial properties designed for business purposes. Residential leases apply to many types of properties, including:
- Single-family homes
- Room rentals
- Mobile homes or trailers
- Over-garage dwellings
When Does a Residential Lease Become Effective?
The lease becomes effective on the date set in the lease document.
Some leases become immediately effective on the date the agreement is signed. This depends on what the parties negotiate and how their arrangement is written.
What to Include in a Standard Residential Lease Agreement
There are several important provisions you should include in your lease:
- Identifying Information: the full names of the landlord and tenant(s) and their contact information.
- Premises Information: the property address and description of the property, type, number of bedrooms, bathrooms, and more.
- Lease Term: when the tenancy starts and how long it will last (end date or length of term). It should also outline how to renew or terminate the lease.
- Rent: the rent amount, due date (frequency and day of the month), and the consequences of late payment.
- Utilities: whether they are included in the rent, specifying which utilities are included, if any, and any other relevant details.
- Signatures: the landlord and all tenants who are party to the lease must sign.
Fixed Lease vs. Month-to-Month Lease
There are two primary types of residential leases:
- Is designed for long-term tenants.
- Fixed term ( specific start and end date )
- Cannot be terminated early except as expressly permitted in the contract or agreed upon by the parties.
- Cannot increase or decrease the rent during the leasing period.
A month-to-month lease is less common but is used frequently in landlord-tenant situations:
- Is designed for short-term tenants.
- Can increase or decrease the rent during the leasing period.
- Allows either party to terminate the lease with the proper notice.
The required termination period may vary from state to state, so make sure to check the month-to-month termination laws.
How to Negotiate a Standard Residential Lease
Every landlord and tenant should know how to negotiate a lease. Consider these tips and factors when negotiating your rent agreement:
- Previous Rental History: some lease applications even require previous landlord references, where permissible under state and local law.
- Employment History: landlords want proof of consistent employment when picking a quality tenant. They may ask for an employment history of three to five years to understand a tenant’s background.
- Past Income: the applicant must compile their income tax filings from the past 2 to 3 years as filed with the Internal Revenue Service (IRS). Employees should gather Form W-2. On the other hand, self-employed individuals or independent contractors will need to provide Form 1099-NEC.
- Current Pay Stubs: proof of employment might also be required to ensure a tenant can pay the expected rent. The stubs from the most recent two weeks can be obtained directly from the employer or through bank statements.
- Rent Pre-payment and Security Deposit: a landlord might require a tenant to pre-pay one or multiple months of rent as a condition of the agreement. They may also need a security deposit to protect the lease premises.
It’s important to note that many states have established legal limits on the maximum amount a landlord can charge for a security deposit. These limits protect tenants from excessively high deposits while allowing landlords to secure financial protection against potential damages or unpaid rent.
What Happens When a Residential Lease Agreement Ends?
Residential lease agreements, whether month-to-month or fixed-term, follow distinct procedures upon termination. Understanding these adequately is crucial for both landlords and tenants.
Fixed-Term Lease Agreements
A fixed-term lease terminates automatically upon reaching its end date unless renewed or extended:
- Tenants must vacate the property by the lease’s conclusion, ensuring the unit is returned in the same condition as when they moved in.
- Landlords perform a final walkthrough, assessing any damages beyond normal wear and tear, and may use the security deposit to cover repair costs.
Month-to-Month Lease Agreements
In a month-to-month lease, either party can terminate the agreement by providing proper notice, usually 30 days in advance:
- The tenant must ensure the property is in its original condition, clean, and undamaged.
- The landlord conducts a final inspection and may deduct from the security deposit for any damages beyond normal wear and tear.
General Termination Process for Both Lease Types
Understanding the specifics of lease termination for residential lease agreements helps both landlords and tenants navigate the process effectively:
- Notice: Both landlords and tenants should provide written notice per the lease terms or local regulations.
- Property Inspection: Landlords usually conduct a final inspection to assess the property’s condition.
- Security Deposit: Landlords may use the security deposit to cover damages, unpaid rent, or cleaning fees.
- Return of Keys: Tenants should return all keys and access devices upon moving out.
- Documentation: To resolve potential disputes, both parties should document the property’s condition with photos or a checklist.
How to Write a Standard Residential Lease Agreement
Follow these tips below to help you write your agreement:
Step 1 — Identify the Parties
The lease should identify each party to the contract. The first party is the landlord. They could be an individual or a business entity.
The second party is the tenant; the agreement may list multiple tenants. Children and people not listed as tenants but living on the property are named occupants.
Step 2 — Describe the Residential Property
The lease should clearly describe the premises, specifying whether it is a single-family home, apartment, condo, or another property type. If it involves amenities or other available services, these features should be precisely detailed and included in the document.
The contract should provide specific details about the premises:
- The number of bedrooms.
- The number of bathrooms.
- Whether there is a garage or basement.
- Whether parking is included.
- The street address, unit number (if any), city, and state.
- Whether it offers any separate storage.
- Whether it is furnished and what is provided.
Step 3 — Define the Lease Term
The lease agreement must define the term. For a fixed-term lease, provide the start and end dates in a mm/dd/yyyy format. The parties may choose to extend the lease term with a lease extension agreement, or a month-to-month tenancy may be created at the end of the term.
In the case of a month-to-month tenancy, the agreement should define the first day the tenant may occupy the premises and state that the rental agreement will continue every month after that date until either party terminates.
Step 4 — Establish the Rent Amount
The agreement must list the specific amount of rent and how often it is due. In most residential leases, tenants pay rent monthly. However, how a landlord charges rent is up to them.
Before establishing the rent amount, conducting a final assessment of the neighborhood is advisable to compare the monthly rent offered by other landlords. RentoMeter uses third-party resources to provide prospective tenants with the median rent in the market area, helping them determine if they might be overpaying.
In the rent amount section, other important details to add are:
- Whether the lease requires a security deposit.
- The amount of the security deposit.
- Where to send the monthly rent payments.
- Whether the tenant can pay with cash, credit card, check, or other payment instructions.
- The late payment policy if rent is not paid on time.
- Whether there are any late fees for late rent payments.
Late fees are typically charged per day of delayed payment or occurrence. Several states have imposed maximum limits, so it’s a good idea to research the applicable laws in the property’s location.
Step 5 — Set up Utilities and Services Responsibilities
The lease should outline whether utilities are included in the rent. If they are not, the lease should detail how the tenant should set them up. It might mention which company to contact or other vital details. The lease may also make the tenant responsible for utility services, which may include:
- Water and sewer
- Internet and cable
- Waste management
- Air conditioning
- Lawn care and snow removal (in suburban areas)
Step 6 — Outline Furnishings
The lease should describe what furnishings come with the rental premises. This section should also address a rental inspection checklist. A tenant can complete this checklist to examine the presence and condition of the furnishings and if there is any preexisting damage to the property.
Step 7 — Determine the Standard Lease Termination Conditions
Most lease agreements require the tenant or landlord to deliver a specific amount of notice before ending the tenancy. This is typically one month’s notice before termination. However, it may have a longer duration.
It should detail what happens if the tenancy is terminated early, including any consequences for the early breach. A lease addendum can prove helpful when modifying the original lease agreement.
Step 8 — State the Policies and Disclosures
The agreement should contain standard policies and disclosures, such as:
- Military early termination clause.
- Whether subleases are permitted.
- Policy regarding reasonable accommodations for disabilities.
- Sex offender registry clause.
- Mechanic’s lien clause.
- Policy about property alterations.
- Smoking policy.
- Pet policy.
- Renter’s insurance policy.
- Lead-based paint disclosure.
- Right of entry and notice requirements.
Step 9 — Sign the Lease
The landlord and all adult tenants should sign the lease. The lease template must have a section where parties sign and print their name and another to date their signature.
An authorized agent or officer should sign for the company if the landlord is a business entity. The landlord agent should also note their official title immediately behind their name.
Standard Residential Lease Agreement Sample
You can download your standard residential lease agreement template below in PDF and Word formats.
Frequently Asked Questions
What is the most common residential lease?
The most common type of residential lease is fixed-term. The predefined duration format, typically six to 14 months, offers security and continuity for tenants and landlords.
This lease is especially popular as it outlines the rental period, rent amount, and other conditions, thereby minimizing uncertainties and potential disputes during the lease term.
When might I opt for a monthly lease?
Opting for a monthly lease can benefit individuals who value flexibility in their living arrangements. This type of lease is particularly suitable for those who might need to relocate swiftly, such as for a new job opportunity or unexpected life changes, allowing them to move without incurring penalties.
Furthermore, transitioning to a month-to-month lease can be a practical option after the expiration of a fixed-term lease. Many landlords are open to this arrangement with reliable tenants, offering a way to remain in the current property without committing to another extended lease period.
How do you get out of a fixed-term lease?
You can get out of a fixed-term lease by delivering a notice in accordance with the lease agreement. If you must terminate early, speak with your landlord to negotiate a potential resolution.
Does a residential lease need to be notarized or witnessed?
In each of the 50 states, lease agreements with a term of one year or less do not typically require the signature of a witness or a notary public to be valid. However, in states like Florida, additional signing requirements, such as the presence of witnesses, are mandated for leases extending beyond this duration.
Notarizing a lease, even when not mandated, may prove the validity of your agreement.
Can the landlord or tenant break a residential lease?
Both landlords and tenants are legally bound to the terms of a residential lease until its specified end date unless the lease includes a specific termination clause. However, there are strategies that either party can employ to negotiate an early termination in a mutually agreeable manner.
Landlord’s options for early termination include:
- Offering a Payout: a financial incentive for the tenant to vacate early, such as returning the security deposit immediately and covering moving expenses.
- Offering Rent-Free Periods: can effectively incentivize the tenant to move out sooner.
Tenant’s options for early termination consist of:
- Offering the Security Deposit: as a gesture of good faith in negotiating an early lease termination.
- Offering Additional Rent: if no security deposit was initially paid, offering an extra month’s rent or an equivalent payment could persuade the landlord to agree to an early termination.
- Demonstrating Financial Hardship: tenants who have experienced significant financial difficulties, such as job loss, may find landlords willing to terminate the lease early rather than pursue eviction.
- Citing Domestic Violence: in certain states, like Nevada, tenants who are victims of domestic violence may legally break their lease without penalty. Victims of domestic violence must seek immediate assistance, regardless of their lease situation or local laws.