Standard residential real estate lease agreements consist of legally binding contracts between property owners and tenants that document the terms of leasing property. This type of agreement constitutes one of the most common lease contracts and has many of the same clauses regardless of the jurisdiction.
The importance of residential lease agreements becomes magnified during times of disagreements. Tenants must make sure they understand the lease so that they are clear about the expectations. This also lessens chances of encountering problems during the course of the lease and at the agreement’s termination.
The four kinds of residential lease agreements are fixed-term lease, periodic lease, tenancy at will and holdover lease agreements. The fixed-term lease outlines certain duration such as nine months or three years. A periodic lease obligates the property owner and tenant for only the current period month, which may go from week to week or month to month, but does not have a start or end date. A tenancy at will typically consists of an oral rental agreement that runs 30 days.
A holdover lease, also referred to as “tenancy at sufferance,” dictates the events when a tenant does not move out at the end of a fixed lease. Generally, the terms of the lease remain the same, except the lease does not have a duration. The property owner may move to evict the tenant without providing a notice.
Lease agreements must contain clear language that addresses key issues. Most standard agreements contain many of the same provisions, including security deposits, rent payment and occupancy and use of the property. Many jurisdictions have laws that govern the amount of the security deposit, including the circumstances in which owners may use the deposit in case of damages, payment of interest rate and the time frame for returning the deposit.
The typical lease states the amount of the rent, methods of payment, the rent due date and penalties for late payment. The agreement should specify the method of delivery, such as mail or depositing in a drop box or at the management office. The occupancy clause outlines how the tenant may use the property. For example, the lease may prohibit the tenant from using a garage or operating certain types of businesses. Tenants and landlords should clarify the policy regarding pets, unit inspection and entering the premises and maintenance, repairs and improvements.
The typical agreement contains the beginning date and the end date for the lease. In addition, most leases contain language for the required notice period to vacate the property at the end of the lease period. Usually, state law dictates the number of days required, such as 30 days or 60 days.
State laws govern the clauses contained in residential lease agreements. Both tenants and property owners should familiarise themselves with their rights and responsibilities under the contact as well as state regulations. Many jurisdictions may not allow tenants to waive certain rights under landlord-tenant law, such as requirements pertaining to health and safety.