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Here's what you'll find in this rental agreement template:A simple, understandable, and easy to customize contract template Clearly demarcated sections for easy referenceOptions divided by state and use case Written (and vetted) by legal experts
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A rental agreement, also known as a lease agreement, is a legal document that is created to show the relationship between a landlord and a tenant as concerns renting property. Generally, these agreements last for a year and the tenant agrees to pay monthly but this can vary based on the terms that are favorable to both parties.
After it has been duly signed and executed, it’s a legally binding agreement that the landlord and tenant have to abide by until the end. Of course, there are situations where the lease is terminated early but that is an exception to the rule. Tenants, after filling the rental application and being selected, usually pay a security deposit and rent for at least a month before moving in.
Add the landlord's name, number, email, and business address (if applicable). The same should be added for the tenant if it’s a commercial rental. For a residential unit, the address will be the address of the unit.
No one wants a guest that will never leave - right? Even if they’re the best tenants you’ve ever had, there should be a clear commencement and ending date for the rental agreement. Leave the option for the tenants to request an extension on their lease instead of instantly granting them an indefinite leave to stay.
Terms can be different but it’s usually monthly. State clearly how much the tenant will pay every month and on which date payment is expected. If payment is expected on the first of every month then they should mail the check before then. Otherwise, it’s late when it arrives on the second. The agreement should also stipulate the grace period for late payments and the penalty for them.
If you require a security deposit (which most rental agreements do), state how much it is and under which circumstances it can be taken to offset costs.
A rental agreement will either stipulate the maximum number of occupants that can live in the property at any time. In lieu of that, all of the occupants must be registered with the landlord. If the tenant wants to include another person then they’ll need prior written consent from the landlord.
A clause can also be added that stipulates if pets are allowed. If so, you can also limit what kind of pets. For example, only cats and small dogs but not snakes or rodents of any kind. The contract may also stipulate a separate deposit fee for pets.
Who is in charge of utility payments and what type of utilities? Be specific here. If there’s damage, at what point does the landlord step in? Is there an incentive for them to handle repairs?
For example, you may remove $100 from their rent payments after three months if they handle small repairs themselves.
If there is no incentive, be as clear as possible when stating which repairs tenants are in charge of and which ones the landlord is in charge of. Also, note any additional fees that may be included.
List the general rules associated with the property. If the rules will take up a lot of space in the agreement, they can be attached as a separate document. There’s no way to cover every single situation so after adding specific rules, include a clause that says the tenant must comply with state and federal laws.
There can be multiple additional clauses within a rent agreement such as detailing whether or not pets are allowed, utilities, etc. But the options above are the bare minimum needed to make a simple lease agreement.
Rental agreements and lease agreements are similar and because of that, they’re often used interchangeably. In fact, the clauses are similar and the laws governing them are the same. If that’s the case, is there any real difference?
Yes, a lease agreement establishes the relationship between a tenant and a landlord. It sets out expectations and clear ground rules for the landlord and tenant to follow. Usually, they’re at least six months and can extend to years. A rental agreement is the same except for the length of time. They’re shorter than leases - under six months but usually 30 days or less. Rental agreements can last for years but they’re designed to be month to month.
Leasing property - commercial and residential - doesn’t have to be a difficult process. We lay out the steps in this short guide.
After getting an agent to help you advertise the property or doing it yourself, there should be a few expressions of interest. If that’s the case, allow prospective tenants to view the space and determine whether or not it can fit their needs. If they do find it acceptable then it’s customary to make an initial verbal offer or to negotiate the offer that was initially presented (if applicable). If the landlord is ok with the offer then the tenants can proceed to the next step.
To weed out the serious tenants from the tire kickers - and to properly perform due diligence - the landlord should ask the interested tenants to fill out a rental application form. This usually comes with a small fee to cover the cost of the background check and other incidental expenses that may occur.
This is where the landlord protects themselves and their property from tenants that could be a liability. While past behavior isn’t an indication of future performance (like they say in the financial markets), it’s all we have. Check the credit, rent background, and criminal history. If there are no red flags then you can proceed to the next step.
MySmartMove.com - detailed background checks for less than $50.
Make it a point to check the references supplied in the application form. Include employers, past landlords, colleagues, etc. It may be a good idea to avoid family references because they’ll usually paint the tenant in a positive light. Prioritize information from past landlords and, if possible, run blind background checks. These are people that know them but weren’t included as a reference.
Once the landlord is happy with the tenant, the background checks out, and the references are satisfactory then it’s time to draft the lease. Use our templates or use our lease creation software that’ll walk you through drafting your lease in a step-by-step process. It’ll also help you avoid mistakes.
A lease is relatively straightforward and contains the clauses outlined above but here’s a quick recap.
Fees and utilities
Rental payments
Security deposit
Term of the lease
When they’ll move in
Rental agreements are simple legal documents that aren’t required to be witnessed by anyone. With that being said, it’s a good idea to have at least one witness as this helps to prove the authenticity. Once the lease has been duly executed, the landlord should give the tenants the keys to the property. The tenant should pay the security deposit either through electronic transfer or check.
As a landlord or a tenant, it’s important to do a move-in inspection. Take note of any existing property damage. If it’s the landlord, file it away for your records with photo evidence. If it’s the tenant then sign it and send it to the landlord with photo evidence and keep a copy.
This will prevent the tenant from having their security deposit deducted for damages they aren’t responsible for and is required in multiple states such as Arizona, Georgia, Kansas, and many more. Even if it’s not required, it’s a good practice to adopt.
All leases have a designated end date and some have the option to extend or renew. If the landlord decides not to renew the lease (or the tenant doesn’t renew) then the tenant must vacate the property. The landlord will send the security deposit back to the tenant after subtracting any fees. The landlord can also terminate the lease for various reasons before the stipulated end date.
If the landlord wishes to renew the lease then they must issue a renewal letter and make any necessary changes to the lease.
Many laws govern the relationship between landlords and tenants which extend to security deposits, how a landlord can access the property, etc. It’s different for each state and you can find an overview of the laws by state here.
For most lease agreements, the landlord requires the tenant to pay a security deposit which is returned after the tenant vacates the property. Money can be deducted if there are damages to the property, if the tenant ends the lease prematurely, or in the case of an eviction. Keep in mind that the damage does not include normal wear and tear. You can find the state-specific regulations for security deposits here. Security deposit laws.pdf
After a tenant takes possession of the property, it’s their home or place of business. That means they have a certain right to privacy and the landlord is required to give them sufficient notice before trying to enter the property. Each state has different regulations related to how much time a landlord must give a tenant before visiting a property and you can see those regulations here. Landlord access laws.pdf
Like the access laws and security deposit laws, each state has different regulations related to when a landlord can charge a late fee for past due rent. These laws prevent the landlord from unduly charging a fee or evicting a tenant for late payment. Even though there are grace periods, keep in mind that this will not protect a tenant from having the information reflected on their rental history. You can find information on the grace period by state here. Grace periods by state.pdf
The max amount that can be charged by a landlord when rent is late is something that’s not defined by most states. That means a landlord can charge as much as they feel is necessary as long as it conforms to the terms of the lease. Some states set a cap on how much can be charged in late fees and you can find that information here. Maximum late fees.pdf
Alterations – Alterations aren’t usually allowed. If a tenant does make changes, the property should be returned to the original state when the tenant vacates. An example would be if a tenant decides to add a built-in bookshelf and the landlord doesn’t approve then they must remove it when vacating.
Appliances – All appliances that come with the property such as a microwave, refrigerator, washer and dryer, etc. should be documented and described.
Verbal Agreements – Avoid these if at all possible because they’re not honored by the court system. Include all terms that have been agreed upon in the rental contract.
Furnishings – Include things such as chairs, couches, beds, tables, etc. When the property comes furnished, the items should be documented and described and the tenant should not carry anything when they move out.
Governing Law – this clause stipulates which state has jurisdiction over the lease. Each state has its laws regarding landlords and tenants so always check to make sure you’re compliant.
Guests - the maximum number of people that can visit at once (which may also include the maximum timer period they can stay).
Late Charges – This is a clause that encourages compliance with the payment schedule and allows landlords to penalize tenants for not adhering to the terms of the agreement.
Maintenance – This clause outlines what kind of maintenance is required by the tenant and what kind of maintenance is required by the landlord. For example, in a single-family home, the landlord would be responsible for changing the water heater or the roof while the tenant may be responsible for cutting the grass.
Payment – This documents the monthly payments owed every month and should be stated in words, numbers, and verbally so there’s no room for confusion. There should also be a clause that states when the rent is due every month.
Property Description – A clear and detailed description of the property should be included. Add things like the number of rooms, sizes, bathrooms, the color of immovable items like countertops, etc.
Receipt of Agreement – The lease becomes valid and enforceable once all concerned parties have gotten a copy of the lease and acknowledged their copy.
When a tenant is late on their rent payment, landlords have multiple options to handle the situation. If it’s the first time or only late by a short amount of time due to things outside of the tenant’s control then it’s recommended that you give them a grace period. If it’s a regular occurrence then it may be time to send them a notice to pay or quit. This lets the tenant know that if they don’t pay their rent then the landlord may terminate the lease.
Late rent isn’t the only type of lease violation. There are many and, depending on the severity, a tenant may be given a warning or asked to vacate the property immediately. Usually, the landlord sends a notice to comply or quit letter. If the situation isn’t rectified then the landlord will proceed with the eviction. Violations can include contravening any of the rules in the signed lease but common ones include:
Consistently loud music
Wonton damage to property