What is a Lease Agreement?
A lease agreement (or rental agreement) is a document that explains the terms under which a tenant rents a residential or commercial property from a landlord.
Lease agreements are legally binding contracts that detail the obligations and rights of the tenant and landlord.
Even if you are renting out a room in your house to a friend or family member, you need a lease agreement for legal protection in case you encounter problems with your tenants.
Use our builder to create a lease agreement that you can use to rent a room, house, apartment, commercial property, or piece of land.
When Should You Use a Lease Agreement Form?
Landlords should create a lease agreement form after they decide on a tenant based on an approved lease/rental application.
IMPORTANT
Our lease agreement builder walks you through the form creation process, step by step. Landlords can and should create lease agreements that are specific to the property they want to rent.
How to Write a Lease/Rental Agreement
The following are the main steps in writing a lease agreement form:
Step 1 – Name the parties
A simple rental agreement form names the parties signing the lease and where they live. It includes:
- the landlord or property management company and its current address
- the tenant or tenants and their current address
Step 2 – Describe the premises
The “premises” are the exact address and type of property being rented, such as an apartment, house, or condominium.
Step 3 – Define the term of the lease
The “term” is the length of time a tenant will rent the listed property. A standard lease agreement should detail exactly when the lease term begins and ends.
Furthermore, a lease can either be fixed-term or month-to-month.
- A fixed-term rental lease means the agreement is set for a predetermined, or fixed, period of time. This type of lease expires on the end date listed in the agreement (usually up to six months, one year, or two years from the start date).
- A month-to-month rental lease means the agreement is for a one-month period with no defined end date. It continues on a per month basis until either the landlord or tenant terminates the agreement.
Additionally, include any clauses pertinent to your property, such as pet and smoking addendums.
Step 4 – Set the rent amount
A lease agreement must explicitly list the monthly rental amount and outline what the consequences are if the rent is late
It is up to the landlord to decide how much to charge for rent, but the cost usually compares to other properties within the same area.
In addition, rent control laws may limit the amount that you can charge for rent. Check your local rent control ordinance to ensure your lease agreement is compliant.
Step 5 – Assign a security deposit amount
A security deposit is a set amount of money a landlord usually collects at the beginning of the lease. Property owners have the right to collect a security deposit from their tenants, but each state’s security deposit laws strictly dictate what landlords can use that money for.
Step 6 – Finalize the lease
Finally, a lease agreement contains:
- Signatures – The landlord and tenant must sign a lease agreement to make it binding.
When creating your lease agreement form, double-check all entries to ensure you correctly state all terms, expectations, and clauses.
Remember
- Reference any important disclosures or addendums
- Mention when the landlord can access the property
- Explain any noise or parking policies
- Add other pertinent property details
Avoid
- Any language that is discriminatory (this violates fair housing laws)
- Collecting more of a security deposit than your state law allows (check with your state)
- Unclear verbiage on subleasing and lease assignment
What should be included in a lease agreement?
You should include the following specifics in your lease agreement:
- Move-in and move-out date
- Monthly rent payment amount
- Security deposit amount
- When the rent is due each month
- What will be done about late rent payments
- Who pays or manages the utilities
- The penalties, if any, of breaking a lease
After you go over everything with your new tenant and create the lease contract, both parties sign the agreement. You may need to calculate prorated rent, depending on when the tenant moves in.
IMPORTANT
Legal Templates makes it easy to sign your lease agreement form digitally and collect an e-signature from your tenant.
Remember to save a copy of the fully executed (signed) lease agreement and provide a copy to the new renter.
Create Your Lease Agreement with our Step-by-Step Builder
Use our step-by-step builder to create your next lease agreement and easily fill out all the required clauses, terms, and critical information.
