A lease agreement is a written contract that explains the terms for renting a property and is on the list of essential property management forms. It outlines what the landlord and the tenant are each responsible for and what happens if the agreement is not followed. Lease agreements help protect the property, the landlord (lessor), and the tenant (lessee).

This document, also known as a rental agreement, lease contract, or tenancy agreement, includes details like how much rent is to be paid, how long the rental term lasts, and the responsibilities of each party. It may also have rules about pets, deposits, late fees, utility bills, and more. The lease can be for a set term (like 6 or 12 months) or a flexible arrangement (like month-to-month). If it’s for a set term, both parties must stick to it until it ends.

When Should You Use a Lease Agreement?

• You’re a landlord renting out a home or apartment.
  
• You own a home and want to rent a room to a tenant.
  
• You’re a tenant looking to rent a property and the landlord doesn’t have a lease ready.

What Should Be Included in a Lease Agreement?

A lease agreement outlines the rental relationship between a landlord and a tenant. It sets clear expectations and states the consequences if they’re not followed. Here’s what the agreement should include:

Description of the Property

The lease should list the property’s full address and any included appliances like a fridge, stove, dishwasher, microwave, washer, dryer, or water system. Listing these protects both the landlord and tenant in case of repairs or replacements.

Names of Tenants

Every adult living in the property should be named and must sign the lease. This way, each person is legally responsible. If roommates change, the lease should be updated. This also helps with rule enforcement since one person’s violation could affect all.

Duration of Lease

Whether it’s month-to-month, annual, or another term, the lease should clearly state the rental period.

Renewal Terms

Month-to-month leases often renew automatically unless one party gives notice. Fixed-term leases may become month-to-month after they expire. The lease should explain how much notice is needed to end it, usually 30 or 60 days.

Security Deposits, Fees, and Rent

The lease should state all deposits, fees (like for pets or cleaning), and rent details. It should also explain how rent is paid, what late fees apply, and how the deposit will be held and returned.

Utilities

It should clearly say who pays for things like electricity, gas, water, internet, cable, or trash.

HOA Fees

If there are homeowners’ association fees, the lease should state who pays them. These fees are usually included in the rent, but this should be clear since unpaid fees can cause issues.

Use of Property and Subletting

The agreement should say that the property is only for living in, unless the landlord allows it to be used for business. It should also say whether subletting is allowed and the process for doing it.

Right to Enter

While tenants have privacy rights, landlords may need to enter the property for repairs or checks. The lease should say how much notice is needed—usually 24 hours.

Repairs and Maintenance

Landlords must handle major repairs, but smaller ones may be the tenant’s responsibility if the lease says so. The lease should also list tasks like lawn care or pool maintenance if the tenant must handle them.

Rules and Regulations

The lease should include or attach a list of rules the tenant must follow, including any HOA rules.

Pets

The lease should say if pets are allowed, how many, what types, and if special insurance is needed for pet-related issues like damage or injury.

Most landlords start with a general rental agreement and adjust it for local laws or specific situations. Whether you’re a landlord or tenant, always read the lease fully before signing.

Legal Tips for New Landlords

Being a landlord can be rewarding, but it also comes with responsibilities. Here are some helpful tips:

Always Put It in Writing

Putting everything in writing is one of the smartest things you can do. The lease agreement is your main protection. If problems arise, a written lease proves what both parties agreed to and helps settle disputes.

Collect a Security Deposit

A deposit shows the tenant that you expect the property to be kept in good condition. It can also cover any damage or cleaning needed when the tenant moves out. Ask tenants to fill out a Renter’s Inspection Worksheet when they move in to avoid confusion later.

Check the Tenant’s Background

Ask tenants to fill out a rental application. Use it to check their credit and job status to make sure they can pay rent. It’s better to find another tenant now than deal with eviction later. While you must follow fair housing laws, it’s okay to turn down a tenant who can’t afford the rent. You can also ask for a credit reference or employment verification.

Know the Lease Terms

Make sure you follow the terms of your own lease. If you don’t, a tenant could take you to court or file a complaint with housing authorities. Also, if you don’t follow your responsibilities (like doing repairs), it’s harder to expect the tenant to follow theirs.

Understand Your Rights

As a landlord, you also have rights. You can enter the property for emergencies or repairs with proper notice. You can also evict a tenant if they break the lease. Learn about the eviction process in your area before you need to use it.

Is a Lease Agreement Legally Binding?

A lease becomes legally binding once all parties sign it. A completed and signed lease gives more protection than a generic form or a blank template. Most leases are valid with electronic signatures, but check your state laws to be sure.

Why Should a Landlord Create a Lease Agreement?

Even if you’re renting to someone you know, a lease protects both sides. A written lease:

• Sets clear dates for the rental term.
  
• Explains each person’s responsibilities.
  
• Clarifies when and how rent should be paid.

Without a lease, misunderstandings or missed payments are more likely.

What Can’t You Include in a Lease?

Laws vary, but there are limits to what you can put in a lease. You usually can’t include anything that discriminates based on race, sex, origin, or family status. You may not be allowed to ask for the applicant’s age unless it’s needed to confirm they can legally sign. In some states, you must list the bank that’s holding the deposit. If you have questions, talk to a legal expert to make sure your lease is valid.

What Should You Include in a Lease for a Home?

To prepare a lease agreement for your property, you’ll need:

• The address and a short description of the home.
  
• The tenant’s contact details.
  
• The rental start and end dates.
  
• Which amenities are included.
  
• How rent should be paid.

You should also include rules about pets, guests, smoking, late payments, and move-out procedures. You can also add details about furniture, maintenance, and insurance if needed.

How Much Does It Cost to Hire a Lawyer for a Lease?

Lawyers who handle landlord-tenant matters usually charge between $200 and $500 an hour depending on where you live. However, you can often create a lease yourself using reliable online tools for free.

What to Do After Creating a Lease Agreement

Once your lease is ready, take these steps:

• Review the document to make sure it includes everything you need.
  
• Share it with the other party to review and make changes if needed.
  
• Sign it (you can do this online).
  
• Give a signed copy to each party.
  
• In some places, you may need to notarize it. If so, print it and sign in front of a notary.

Landlords might also need other documents like rent receipts or notices. Make sure you have everything required to manage your rental properly.

How Do Local Rental Laws Affect My Lease?

Rental laws change over time. If you’re unsure about what your lease should say, consider talking to a legal expert. Getting feedback can take time if you do it alone, but working with an experienced attorney can help make sure your lease follows all local rules.

Whether you’re renting out one room or managing several properties, having a well-written lease is one of the best ways to protect yourself and your tenants.