Top Ten Essential Elements of a Residential Lease

When it comes to a landlord/tenant relationship, one of the most important elements is the Residential Lease Agreement. A lease provides a roadmap of the tenancy, outlining in detail the rights and responsibilities of both the landlord and the tenant. It serves as both a practical document full of important business details as well as a binding contract that can be enforced in court if one of the parties fails to abide by the agreements it contains. Though a written lease is not mandatory in most states, having a written lease can help the landlord and tenant make their expectations of each other clear and clears the path for a smooth landlord/tenant relationship. This guide will discuss the most important topics and provisions that are included in common residential leases.

Important basic terms to understand in this guide include:

-- Residential Lease: a contract between a landlord and a tenant to rent a space where the tenant will live
-- Landlord: the party who owns the rental space and is renting it out to the tenant
-- Tenant: the party who will be living in the rental space that they are leasing from the landlord

1. Information about Tenants

All of the adults living in the rental property, including both members of a couple, whether married or unmarried, should be named as tenants and sign the lease. By requiring all adult occupants of the property to be on the lease, the landlord is provided with an additional form of insurance. Each tenant on the lease is bound by all of the terms of the lease and is legally responsible for paying the full amount of the rent. This means that if one tenant fails to pay or skips out on the rent, the landlord can seek the entire rent from any of the other remaining tenants. Further, if one tenant violates conditions of the lease, the landlord will be able to evict all of the tenants from the property instead of just the one tenant who violated the lease.

Many residential leases also contain what is known as an occupancy clause. An occupancy clause states that only the tenants listed on the lease, along with their minor children, may stay in the rental. It limits the amount of time a guest can stay in the rental property, usually for a set number of days. This way, if a tenant moves in a roommate or subtenant who has not been approved by the landlord in a Consent to Sublease and by using an official Sublease Agreement, the landlord has the right to cancel the tenancy and evict all residents if necessary.

2. Rental Property Description

Good residential leases provide a full description of the property that is being rented. A description should include the complete address of the property, including any applicable unit, apartment, or room numbers. It should also mention any specific storage areas or parking spots that are included, along with stall or spot numbers if these areas are assigned and have these designations. It is also important for the lease to note any areas that the tenant is specifically not allowed to access, such as utility closets, locked sheds, or basement storage.

3. Term of Tenancy

Rental agreements and leases can be arranged to last for different periods of time, known as the term, depending on the situation. A rental agreement can create a short-term, often month to month, tenancy that renews automatically unless one or both of the parties terminate. Leases can also be created so that they last for a specific period of time, usually a year, and then terminate automatically. No matter the arrangement, it is critical that the rental agreement is specific about the term of the tenancy. The agreement should have information including the start date, the length of the tenancy, and, if applicable, the termination date of the tenancy. To renew an expired lease at the end of its term, the parties may use a Lease Renewal Agreement.

4. Rental Price

Complete rental agreements include a detailed description of the amount of rent that will be paid. This provision includes not just the amount paid but also when it will be paid (generally the first of the month) and how it will be paid. The following details should be included when outlining the rental price:

Payment methods that will be accepted (e.g. cash, cashier's check, direct deposit, etc.)
Fees that will be charged for late rent payments, as well as any grace periods
Charges if a rent check bounces

If the landlord wishes to change the rental price after the lease has been signed, they may use a Change of Rent Notice to document the change in writing.

5. Rental Security Deposits and Fees

Some of the most common disputes related to rental agreements arise around security deposits, when and how they will be paid to the landlord, and when and how they will be returned to the tenant. To avoid these disputes, the rental agreement should make clear specific details regarding the security deposit and related fees including:

Dollar amount of the security deposit, being sure to comply with any applicable state laws limiting the amount of security deposit that may be charged
Where the security deposit will be held during the tenancy and whether it will accrue interest that the landlord will later pay to the tenant
How the security deposit may be used (e.g. to cover unpaid rent or the cost of repairs for damage caused by the tenant) and how it may not be used (e.g. accepted in place of last month's rent)
Whether the security deposit must be replenished by the tenant if the landlord uses funds from the deposit to repair damage caused by the tenant during the tenancy
When and how the deposit will be returned to the tenant at the end of tenancy, being aware of state laws regarding returning security deposits
Any non-refundable fees that must be paid at the start of the tenancy (e.g. a cleaning fee, pet deposit, etc.)

6. Maintenance and Repair Policies

Most residential rental agreements include provisions describing when and how the landlord will take care of necessary maintenance and repairs. Making this clear upfront is a good defense against rent-withholding by an angry tenant who expects repairs to be made, as well as future battles of how much of the security deposit should be returned. Maintenance provisions often include the following information:

Tenant's responsibility to maintain a clean and sanitary rental property and to pay for any damage they cause to the property beyond normal wear and tear
Requirement that the tenant alert the landlord to defective or dangerous conditions that must be fixed expediently, as well as procedures for when and how the tenant can report these issues
Restrictions on repairs and alterations that the tenant may perform themselves (e.g. painting, electrical work, etc.)

7. Right to Enter

To avoid claims of illegal entry or violation of privacy rights, a rental agreement should include a provision clarifying the landlord's right to enter and access the rental property. Most states have laws requiring that the landlord provide advance notice before entering the property in non-emergency situations. However, the landlord and tenant may agree to different policies for different situations. For example, a landlord might be required to provide 48 hours' notice before entering to make repairs or show the property to potential renters, but may be allowed to enter with less, or even no, notice in case of emergencies.

8. Rules and Policies

Many landlords have important rules and regulations that they want the tenant to follow while renting their property. These rules should be included in the residential lease itself so that they are binding on the parties. This way, if a tenant violates any of these rules, the landlord can remove them from the property for violating the provisions in the lease. Landlords most commonly include the following rules and policies in their residential leases:

No smoking: The landlord may limit or prohibit smoking on the premises. The rule should be specific about where and what tenants may smoke if there are any exceptions to this rule.
No illegal activity: In an effort to limit their own liability, most landlords specify in the lease that the tenant is prohibited from engaging in any illegal activity in the rental property. This would include disruptive behavior such as drug dealing, drug use, excessive noise, or nuisance.
Pet restrictions: Most leases prohibit or limit pets that tenants are allowed to have living on the property, with the exception of certified emotional support or service animals. For landlords who do allow pets, the lease should document in detail the terms of the pet policy including number and type of pets allowed, lease rules, and any applicable one-time or ongoing pet fees or deposits that must be paid.

9. Contact Information

Residential leases often include a section about how the landlord and tenant will stay in communication with each other. Although text messages or other forms of instant messaging may be convenient, many landlords require that tenants contact them in writing about certain important matters. By using written communication, such as emails, the landlord and tenant will both have a printable and reliable record that can be used in case of future legal dispute or disagreement. For example, the lease might state that the tenant is required to make all repair requests in writing with a Google form or to give notice that they do not plan to renew the lease at the end of the lease term via certified mail sent to a designated address.

10. Other Restrictions

In addition to the provisions above, depending on the circumstances, federal, state, or local laws might require that the landlord make certain disclosures in the lease. For example, the landlord may be required to disclose to the tenant information about lead-based paint or the property's history with bedbugs or other pests. The lease may also need to include provisions ensuring that it complies with fair housing laws, anti-discrimination policies, and health and safety codes.

Final takeaways

Disputes related to residential lease agreements are one of the most common reasons the average person finds themself embroiled in a legal dispute, whether over an eviction, unpaid rent, or failure to return a security deposit. By creating a lease that sets out in clear and plain English all of the most important terms of the agreement, the landlord and tenant can help avoid future headaches down the line. These are the most important elements that a residential lease should address:

1. Information about all of the tenants who will be living on the property and restrictions for long-term guests.

2. A complete description of the rental property, including the areas the tenant may and may not access.

3. The term, or length, of the tenancy.

4. The amount of rent that will be paid and when/how the tenant will make those payments.

5. The amount of security deposit that will be paid, when and how it will be used, and when and how it will be returned to the tenant at the end of the tenancy.

6. How the landlord will take care of necessary maintenance and repairs.

7. A description of the landlord's right to enter the premises and any notice requirements they must follow before doing so.

8. Any rules or policies the landlord would like the tenant to follow, such as no smoking or limitations on the pets the tenant may keep.

9. How the landlord and tenant will stay in contact with each other.

10. Any mandatory disclosures or provisions that are necessary to comply with federal, state, or local laws.

About the Author: Malissa Durham is a Legal Templates Programmer and Attorney at Wonder.Legal and is based in the U.S.A.