Most rental agreements are written down, and while spoken agreements can be legal, they often lead to confusion and disagreements. Because a rental agreement is both a legal and practical document, it is important that it includes basic terms. Each state has its own laws that apply to rental agreements, and these must be followed in the contract. This is why a rental lease agreement template is utilized by many for convenience but also to ensure that state specific laws are addressed.
Periodic Agreements and Lease Agreements
A rental agreement gives the tenant the right to live in the rental unit. There are two main types of rental agreements: periodic rental agreements, usually called month-to-month agreements, and lease agreements. A periodic rental agreement ends after each rental period, often a month, and is renewed when the tenant makes the next rent payment. In this type of agreement, the tenant may stay in the rental unit as long as rent is paid and the landlord does not ask them to leave.
A rental lease agreement states the length of time the agreement will last—usually six months or one year. A lease keeps both the tenant and landlord committed to the agreement for the full length of time. One benefit of a lease is that the landlord cannot raise the rent or ask the tenant to leave during the lease period. However, a lease can be hard to end early. If a tenant needs to move before the lease ends, it can be difficult to find someone to take over the lease. If that happens, the landlord may be able to ask the original tenant to pay the rest of the rent.
- Periodic agreement – A rental agreement that automatically renews with each rent payment (usually monthly) and may end if the landlord gives proper notice.
- Lease agreement – A rental agreement that lasts for a set time (usually one year) and cannot be ended early without possible penalties.
Provisions of a Rental Agreement
Usually, the landlord starts the process by giving the tenant a written lease with the terms. Some of the main details in the lease are how long the tenant will stay, how much the rent is, how much the security deposit is, how many people can live in the rental, and whether subleasing is allowed. Other rules may include things like whether pets are allowed and parking instructions. Rules about using shared spaces, such as laundry areas or hallways, should also be included.
The rental agreement should clearly state the rent amount, when it is due, and how it must be paid—for example, by mailing a check to the landlord’s office. It should also explain what payment methods are allowed and what happens if the tenant pays rent late. Late rent may come with extra fees, and repeated late payments might lead to eviction.
The agreement should also make it clear what the tenant is responsible for when it comes to cleaning and repairs. Usually, tenants must keep the rental clean and in the same condition it was when they moved in. The agreement should explain how tenants can report dangerous conditions on the property. Finally, it should also state what repairs or changes the tenant is not allowed to make.
Terminating a Rental Agreement
If a tenant wants to end a periodic rental agreement or leave before a lease ends, it’s important to give the landlord enough notice. For a periodic rental agreement, the amount of time between rent payments decides how much notice must be given. The same amount of notice also applies if the landlord wants to change the agreement or end the rental.
Ending a lease can be more difficult. Because a lease is a legal contract, the tenant usually must pay rent for the entire lease period, even if they leave early. However, if the tenant does break the lease, most state laws say the landlord must try to rent the unit to someone else. Still, the tenant may have to pay for ads or other costs to find a new renter. The landlord can also choose a new tenant based on their credit and rental history. In some cases, it may help if the tenant finds a new renter who meets the landlord’s standards.
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