Table of Contents
- The Basics: What is a Lease Agreement?
- When Do I Need One?
- The Consequences of Not Having One
- The Most Common Landlord-Tenant Relationships
- What Should be Included?
- Download a Lease Agreement Template
1. The Basics: What is a Lease Agreement?
What is a lease agreement?
A lease agreement is a written document that officially recognizes a legally binding relationship between two parties — a landlord and a tenant. This page covers residential agreements — click the following link if you’re looking for information about commercial lease agreements.
A simple residential lease agreement in writing will identify the following basic elements:
- Premises: a house, apartment, condo, basement, or attic
- Landlord: the owner of the Premise, aka “Lessor”
- Tenant: renter who wants to live in the Premises, aka “Lessee”
- Rent: the amount of money paid by the Tenant to the Landlord
- Term: length of time the Tenant has the right to stay on the Premises
Click here to see a full list of critical details that should be included in a simple lease agreement.
As a reference, people often call this document by other names:
- Rental Contract
- Lease Form
- Tenancy Agreement
Lease agreements are not limited to the above. It may also be used to cover these additional Premises:
- Mobile Home
- Vacation rental
- In-law suite
- Other living spaces
- Rent-to-own options
If you’re looking for an alternative to leasing out your place, there is also the option of being a host on Airbnb for guests instead.
3. When Do I Need One?
When a formal relationship exists between two parties, the law recognizes that both the Landlord and Tenant have a special set of rights and obligations.
This document has the added advantage of laying out possible problems that might occur and then detailing possible solutions available to the Landlord and Tenant.
In contrast, an oral agreement (verbal, spoken, or word of mouth) is difficult to enforce in a court and is unlikely to accurately capture important details over time. Memories fade, people remember different things, and sometimes we understandably change our minds because circumstances change.
A written version, however, serves as a constant reminder to everyone, including you and the court, about what everyone agreed to at the beginning of the relationship.
Here are a few examples of what a Landlord or Tenant may agree to in a simple lease agreement:
The Landlord promises to:
- Repair and maintain the air conditioner or heater
- Respect the Tenant’s privacy and do not make any surprise visits or allow anyone else to use the condo (“Quiet Enjoyment”)
- Provide a safe and clean home to the Tenant for the Term of the Lease
- Return the Tenant’s Security Deposit (with interest if required) if the Tenant treats the Premises like their own and it is still in good condition at the end of the lease
- Tell the Tenant in advance if they need to enter the Premises to fix something or show someone the property
The Tenant promises to:
- Pay the Landlord on time each month on a specific day
- Pay the utility company directly for light, gas, heating, and water
- Live in the home only with their spouse, children, and maybe even their parents or grandparents (“immediate family”)
- Not have a dog, cat, chinchilla, pork belly pig, or pet goat in the house without first asking the Landlord or paying a small fee (“Pet Policy”)
- Not start an illegal business like a meth lab or human trafficking scheme (only for “residential” and “lawful” purposes)
In contrast to a verbal, spoken, or oral agreement, an agreement in writing spells out the detailed promises between the Landlord and Tenant and also explains what should happen if they break their promises to each other.4. The Consequences of Not Having One
This document can resolve problems neutrally and objectively before a simple problem becomes a more complicated problem.
Here is a chart of some of the preventable suffering a lease agreement could resolve if the Landlord and Tenant took the time to create one in writing:
Potential Problems This Document Will Solve
|Lost rent money||Damaged or bad credit|
|Unpaid utility bills||Unable to find a new place|
|HOA fees for nuisance or eye sores||Getting sick because there is no heat|
|Property damage||Penalties for unpermitted use|
|Expensive lawyer fees||Expensive lawyer fees|
|Personal safety & well being||Property damage
|Risk of illegal activities||Personal safety & wellbeing
|Fear of Landlord|
5. The Most Common Landlord-Tenant Relationships
A landlord and a tenant no longer have to be a person. In fact, a landlord or tenant could actually be an organization or company that owns an entire apartment building or just two normal people.
Possible Landlords and Tenants
- An individual
- Homeowners and Renters
- Family members
- Users of a public online search engine
- i.e. PadMapper, Craigslist, Zillow, or AirBnB
- Husband and wife
- Same-sex marriage partners
- An organization
- Public housing agency
- Company employer for an employee
- Property managers
- Tenant placement services
- Legally recognized domestic partners
- Boyfriend and girlfriend
6. What Should be Included
A simple residential lease agreement should generally have at least the following:
1. Who is on the hook? (the “Parties”)
This document should definitely name the parties and where they live:
- The Landlord and their current address
- The Tenant and their current address
2. Where? (the “Premises”)
It is common sense for a Texas residential lease agreement to explicitly identify that everyone is talking about the same place — a sleek and modern studio apartment in Dallas or the attic room of a rustic home of a college town like Austin.
Our version requires you to write down the exact address and type of place being rented (the “Premises”).
3. For how long? (the “Term”)
A standard document should detail exactly when the lease begins and ends. By listing the date, there is a clear understanding of when the relationship and the promises start and finish.
Depending on where you live, a month-to-month rental agreement carries a different set of rights and obligations than a 1-year lease agreement. Nolo provides a quick low down on the difference between a rental agreement — usually for a short 30-day period that automatically renews — and a lease agreement — usually a longer 6-month or 1 year plus period that ends.
Note: If the Tenant does not renew the Lease and the Landlord allows the Tenant to continue staying on the Premises after the Lease expires, states usually treat this as a month-to-month- tenancy.
4. For how much? (the “Rent”)
“Just pay what you think is fair,” or a number written on the back of a napkin is not an option. This document should explicitly list the monthly rental amount. If you are unsure of what the going rate is for a place, check out Zillow. You can also include the terms of whether the rent may be subjected to changes in the future, using a Notice of Rent Increase.
Other details may include what happens if rent is late. Will a late payment fee or interest rate apply? For example, if the monthly rent of $500 is due on the first of the month, what happens if the rent is not paid until the 15th of the month? You can use a Late Rent Notice to ensure rent payment is made. Learn more about late rent fees from Nolo.
5. What about a Security Deposit?
Landlords have the right to collect a Security Deposit from their Tenants. Security Deposits are usually paid up front at the beginning of the lease. The Tenant promises that they will treat the Landlord’s home like their own. The Landlord promises that they will return the Security Deposit if the Tenant does not damage the Premises. For more information about Security Deposits, please read this Wikipedia article.
Each state regulates the maximum amount a Landlord can collect from a Tenant as a security deposit. We recommend you check the requirements of your state, but here is a useful chart compiled by Nolo outlining the limits of a security deposit.
Further, some states require that Landlords return Security Deposits to their Tenants within a certain amount of time and with interest. Please check your individual state or county requirements (which the Nolo link above also covers.)
Usually, the Landlord can deduct the following amounts from the security deposit:
- Unpaid rent
- Cleaning costs
- Key replacement costs
- Cost to repair damages to Premises above ordinary wear and tear
- Cost to repair damages to common areas above ordinary wear and tear
- Any other amount legally allowable under the Lease
6. What other details should be included?
Here are some other useful details a written lease agreement might include:
- Access: may the Landlord come over to use the laundry machine?
- Alterations: can the Tenant paint the bedroom, hang a chandelier in the living room, or install a security alarm system?
- Guests: can the Tenant have a short term guest stay for two weeks?
- Keys: how many copies of the key can be distributed?
- Pets: can the Tenant have a pet hamster if they ask the Landlord?
- Right to Entry: can the Landlord come and make repairs or show the home to a possible future Tenant? Maybe only after giving the Tenant 24 hours advance notice, unless there is an emergency water pipe burst?
- Smoking Policy: can the Tenant smoke inside the Premises?
- Sublet: will the Tenant be allowed to sublet the apartment to someone else without the Landlord’s permission beforehand?
- Note: Subletting period must be for less than the lease term.
- Water Beds: can the Tenant have a waterbed or “liquid-filled furnishing” that uses 10 or more gallons of liquid?
- *Other: can the Tenant start a small raised bed garden in the backyard?
Fees & Payments
- Attorney Fees: who should pay the lawyer fees if there is a disagreement?
- Guarantor / Co-Signer: does the Landlord require the Tenant to have someone pay rent if the Tenant cannot do so?
- Insurance Liabilities: should the Tenant purchase renter’s insurance to cover the possible theft or damage of their property
- Late Rent Fee: should the Tenant be responsible for paying a late fee in the event of missing a rent payment?
- Utilities: who should pay for the light, gas, heat, and water?
- Appliances: will the Landlord provide a refrigerator or dishwasher?
- Furniture: will the Tenant need to use the Landlord’s existing furniture?
- Option to Purchase: can the Tenant buy the house at a later time?
- Parking: where can the Tenant park their bicycle, Segway, car, or RV?
- Asbestos Disclosure: if the apartment was built before 1981, did the Landlord tell the Tenant not to hang pictures on the walls because asbestos exposure increases if the walls and ceilings crumble?
- Fire and Accidents: can the Tenant leave the Premises and end the Lease if a fire, flood, or earthquake destroys the Premises?
- Lead Disclosure: if the house was built before 1978, did the Tenant receive a Lead-Based Paint Disclosure Form or EPA Pamphlet?
- Noise Policy: are there any quiet hours in the apartment building, condominium, or neighborhood?
- Notice: when must the Landlord tell the Tenant to leave?
- Property Maintenance: who is supposed to cut the grass, take out the garbage, or unclog the kitchen and bathroom drains?
- Renewal: is there an option for the Tenant to renew the Lease?
- Rent Increase: how long in advance should the landlord give notice?
- Default: what will happen if the Tenant does not pay rent or violates a provision of the Lease (i.e., notice of default, a chance to correct the problem, early termination of the Lease, or eviction proceedings)
- Condemnation: what if the City takes the Premises for a public purpose like building a library (i.e., eminent domain)
- Joint and several liabilities: if the rental unit is damaged by Tim, the Tenant, his roommate Tina the Co-Tenant, is also on the hook for the repair costs
- Successors: if Larry sells the home, the buyer becomes the new Landlord
- Assignment: if Larry transfers the right to collect rent to Anna, Anna is the “assign,” and the Tenant must pay Anna rent
- Severability: if one part of the Agreement is invalid for any reason, the rest of the Lease is still enforceable (i.e., the bad part of the Lease is “severed” or cut out from the Lease)
If you’re finding managing your property more challenging than expected, consider hiring a Property Management Company to assist you.
7. When are you finally done?
Once you have finished negotiating and discussing the details . . .
Remember to PRINT, SIGN, and SAVE:
Step 1: Print – print TWO copies for you and the other party.
Step 2: Sign – BOTH the Tenant and Landlord need to sign AND date the document
Step 3: Save – File a hard printed copy of the SIGNED document in a safe place AND scan a soft electronic copy in secure cloud storage like Google Drive or Dropbox.
Alternatively, let Legal Templates take care of this for you.
Step 1: Print or PDF – generate a PDF of the document using our easy form builder that you can print or email to the other party for review as you hash out the details.
Step 2: E-Sign & Share – digitally sign your name and allow the other party to sign electronically. E-signatures are validly recognized in most states.
Step 3: Save & Store – we save a digital copy of your signed agreement and store a copy for both parties on our secure server.
Remember to do a walk-through of the Premises together after it has been signed. Before the Tenant moves into the Premises, use a helpful checklist like the one provided by the University of Santa Cruz (UCSC) to document the current condition of the Premises.
If you’re finding managing your property more challenging than expected, consider hiring a Property Management Company to assist you.
6. Download a Lease Agreement Template
Your Free Lease Agreement MS Word Download and Sample PDF: Word & PDF