Standard Lease Agreement

Standard Lease Agreement

Standard Residential Lease: What is it?

Standard residential leases are the most commonly used type of rental agreement used when renting property to an individual, or a tenant. In addition, it can be modified according to the needs and property type of any landlord or owner who wishes to customize the agreement.

These are the 3 main elements of a lease:

• Term 

• Rent ($) 

• Deposits ($) 

Standard Residential Lease by State

In what circumstances should you use it?

Whenever livable property is leased to a tenant, including a house, apartment, room, condo, mobile home, or other types of habitable property, a residential lease agreement should be used. If ever a problem leads to the need for court, such as an eviction, a lease is necessary in order for either party to prevail, particularly the landlord.

Negotiation Tips

A lease agreement is negotiated based on a number of factors, starting with market conditions and how the property is priced compared to other nearby rentals. It is the goal of a landlord to collect the highest amount of rent possible each month while assuming the lowest amount of risk. Rent may be discounted for applicants who can demonstrate that they would be a stable tenant with utilities included.

A lease negotiation should take into account the following factors:

• Job History – The landlord looks for applicants with long, stable employment history and that have stayed at the same company for at least three years. In the case of less than this or significant periods of unemployment, the landlord will deem the tenant high-risk.

• A current pay stub – To verify an applicant's income, the landlord requires them to show two weeks' pay stubs. A bank statement or direct contact with the employer can be used to gather this information.

• Past Income - It's vital to collect your past two or three tax returns from the Internal Revenue Service (IRS). This would be Form W-4 for employees and Form 1099 for self-employed individuals or independent contractors.

• Rent Pre-Payment – A renter who can pay rent in advance at the start of the lease may get a lower monthly rate if he or she can do so. Particularly if the amount is greater than 3 months;

• Security Deposit – As most States stipulate a maximum amount for security deposits, tenants may find that they can't fully utilize this option

• Landlord History –Applicants with prior rental history should gather the contact information of previous landlords and property managers as references.

A comparison of Standard leases and Month-to-month lease

Standard Lease Agreements contain a fixed term, whereas Month-to-Month Lease Agreements are revoked anytime by either the landlord or tenant.

Standard Lease

• A fixed-term agreement (start and end dates);

• No early termination allowed

• The contract cannot be altered.

Month-to-Month Lease

• Tenant at will (renews every month)

• Termination is permitted by either party (according to month-to-month termination laws)

• Agreements may be altered with notice.

Writing Instructions

1. Complete the Parties’ Information

Names of the "landlord" and "tenant" will be included in the lease. A question like this is asked to renters who will be living together, such as couples in a  relationship. It is generally recommended that both tenants be named as tenants if the rent can only be supported by their incomes.

Those living on a property but not listed as tenants will be designated as 'occupants'.

2. Describe the Property

Renters should be aware of what is expressly stated in the lease. The tenant should ensure that all aspects of the property are available during the term, for example, if it's a condominium.

A detailed agreement should state whether parking or other services are available and accessible to the tenant.

3.  Rent Amount ($)

You should check out other landlords' monthly rent offers in the surrounding area before settling on a rent amount. Using RentoMeter, a third-party service, prospective tenants can find out if they are paying too much rent by comparing it with the median for the location in which they wish to live.

Read the contract carefully to find out what utilities and services are included in the rent, and how and on what day the rent is to be paid.

Late Fees – There should be a clear understanding between the landlord and tenant regarding any late fees. Most often, a fee is charged for every day the payment is late or for each occurrence. It's best to check the law where the property is located since some states have maximums.

4. Utilities and Services Responsibility

Utility and service packages are almost as important as rent. A tenant's everyday life depends on utilities and services, including:

Examples include:

• Electricity

• Trash / Recyclables

• Water / Sewer

• Cable / Internet

• Heat (gas, propane, etc)

• Air Conditioning etc. 

5. Furnishings

Check that all appliances and furniture listed in the lease exist on the property. Should this not be the case, the landlord may claim whatever was mentioned in the lease at the end of the contract. The move-in checklist should provide a clear picture, however, the tenant must ensure that everything in the lease is included.

6. Lease Term

The standard lease lasts for 12 months in most cases. The agreement can, however, be for any set period of time in some cases, such as when the tenant has employment restrictions. The tenant should choose a term that works for them.

7. Security Deposit

A security deposit is money that is held in escrow by the landlord. At the end of the lease, if there are no damages to the property, the funds are fully released to the tenant. For the landlord, the security deposit serves as a safety net if the tenant doesn't pay rent, leaves early, or if the property has been damaged by the tenant. A landlord usually provides an itemized listing of all repairs made and their cost at the end of the lease if there are damages to the property.

• Maximum Amounts ($) – State-specific limits.

• Returning the Security Deposit – The landlord must return the security deposit to the tenant within the State-mandated timeframe.

8. Early Termination

It is up to the landlord and tenant whether to charge a fee for ending an agreement early. The fee is commonly equal to one (1) month's rent and gives thirty (30) days' notice to the other party. These terms are entirely negotiated between the parties. There are no state-imposed limitations on these terms.

9. Smoking Policy

It must be stated in the agreement if there is a smoking policy. Smoking may be permitted if it's not explicitly prohibited. According to California law, every lease must state what the property's policy is.

10. Pets

Even though technically a pet is an occupant, landlords do not consider pets to be their best pals. The landlord should specify exactly which types of animals are allowed on the property so that an "organic" tenant doesn't bring farm animals with them. In addition to placing a weight limit, the landlord should consider liability (large, dangerous dogs are more dangerous) and property damage.

An additional pet fee or deposit that is separate from the security deposit is allowed by most states. The Pet Lease Addendum can be used by landlords to define how their property is to be treated by animals.

11. Lead-Based Paint Disclosure

Identifying lead-based paint on-premises is perhaps the most important disclosure to a new tenant. In accordance with federal law (42 U.S. Code § 4852d), the landlord is required to provide the tenant with the disclosure if the building on the property was built prior to 1978. In the disclosure, the tenant is warned to contact the landlord immediately if they see any chipping, deteriorating, or cracking paint on the premises.