Landlord-Tenant: Terms of a Lease

A lease or rental agreement is a contract that sets the terms of the relationship between the landlord and tenant. 

Most Common Lease Agreement Terms

Your lease should contain terms covering the following issues: 

• Duration: How long the rental agreement will be enforceable. Leases are often for six month to one year, and rental agreements are often only month to month.
• Rent: The amount of rent paid per month, when the rent must be paid, and what happens if the rent is not paid within a certain amount of days of the due date.
• Terms of Use: The agreement should state whether pets are allowed in the building, and enumerate the restriction on use. Most leases state that excessive noise and illegal activities are not permitted. Leases may also prohibit certain items, such as waterbeds or barbeques.
• Occupancy: The agreement should state the maximum number of occupants permitted in the unit.  Many leases also place a time limit on how long an overnight guest may stay.
• Landlord Entry: The lease or rental agreement should lay out the requirements for the landlord to enter the unit.  Landlords must give notice to the tenant prior to entering the unit. Landlords may also reserve the right of entry for maintenance and gardening.
• Security Deposit: The agreement should state the amount of the security deposit. The document should also state how the landlord may use the deposit, for example to make repairs. Finally, the document should state how the deposit will be refunded to the tenant.
• Payment of Utilities: The agreement should enumerate which utilities the tenant must pay for. Many landlords cover water and trash disposal, but electricity and telephone are usually left to the tenant to pay.

Residential Lease Terms

Some terms are only found or are most common in residential leases. These terms typically cover:

• Pets: Terms covering pets usually state whether pets are allowed, whether keeping a pet will result in a higher rent, and whether the security deposit will be higher as a result of having a pet on the residence. Although pets are often listed under terms of use, pets are often under their own section in residential leases.
• Roommates: Terms covering roommates state who could be considered a roommate and whether roommates are allowed.
• Subletting: Subletting is when a tenant rents the property to another tenant. Leases with a subletting clause state whether subletting is permitted, the extent of the landlord and the original tenant’s liability for the secondary tenants, and how much rent the secondary tenants owe.

Commercial Terms

Some terms are only found or are most common in commercial leases. These terms typically cover:

• Premises: This term covers exactly what space is being rented to the business or company. This term is important if the tenant plans to hold large events or needs room to expand as the business grows.
• Use: This term states what kinds of activities the tenant is allowed to engage in. This term is typically constructed negatively so that the tenant is not unduly restricted while conducting its business.
• Exclusivity: Landlord promises that the commercial tenant will not have competition in certain areas. Landlords are often reluctant to have these types of clauses since exclusivity restricts who landlords can rent the property to.
• Insurance: It is not uncommon for landlords to demand that commercial tenants provide their own insurance.
• Compliance: Commercial leases often have a term which requires that tenants comply with all business laws and regulations.

Terms Which Favor the Landlord

Leases often have terms which favor the landlord. Some of these may be common while others may be more obscure:

• Late Fees: The agreement might apply late fees if the rent or security deposit is late. This term could also be in the part of the lease which deals with rent or security deposits, but it is not uncommon for late fees to be a separate term.
• Acceleration: This term allows the landlord to demand full payment of rent in the event that the lease is breached. For example, if the lease requires $200 per month for a year and the lease is breached in June, the acceleration clause gives the landlord the right to demand the remaining $1200 be paid all at once.
• Merger: A merger clause forbids previous agreements outside of the lease from being used to modify the lease. Any changes after the lease has been made have to be in writing.
  What If My Lease Does Not Have One of These Terms?

If a lease does not have one of these terms, you can always negotiate with the other party to include these terms. Be sure that the change is in writing since enforcing a modification of the lease is difficult without a written document.

Do I Need a Lawyer?

If you are in a dispute with a tenant or landlord over a lease or rental agreement, a landlord tenant lawyer can advise you of your legal rights and remedies and provide legal information..