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Although not everyone thinks of them in this way, leases are legally binding contracts. As such, a lease should be carefully written and negotiated like any other contract. Hopefully, you have a good real estate lawyer to help you ensure that your lease contains all of the right terms to protect your specific interests, but the following list contains the general terms that ought to be part of every lease.
1: The Parties
Every lease, and every contract for that matter, must identify the parties. In a lease, this means the landlord(s) and all tenants. If the parties are not clearly identified, it will not only be difficult to understand who is obligated to do what over the lease, but it will also probably be deemed totally invalid by a court.
2: A Description of the Property
For reasons similar to those in number 1, your lease must identify the property that is subject to the rental agreement. This does not necessarily need to be the formal, legal description, but at least the address and apartment number should be clearly indicated in the lease so that it is clear which property is being rented.
3: Rental Amount and Method of Payment
Both parties to the lease will want there to be a total absence of confusion about the amount of rent and when it is due. The easiest way to avoid any misunderstandings on this point is to clearly indicate the exact dollar amount of rent in the body of the lease. The lease should also include the date when rent is due every month, to whom rent is to be paid, and which methods of payment are acceptable. This is also a good place to include the penalties and procedures related to late rental payments.
The duration of the lease – when it starts and when it ends – is another critically important term to include in a lease. If the parties want the lease to last for a specific amount of time, they should state that explicitly in the lease (“Term runs for 1 year, beginning on January 1st and ending on December 31st”). If the parties fail to include duration language, the lease may be interpreted as renewing automatically until proper advance notice is given to terminate it. This section should also include the mechanisms by which the lease can be terminated early.
5: Security Deposit Terms
The security deposit is an amount of money paid upfront by the tenant when they move in to cover incidental damage caused to the apartment by the tenant during the course of the lease. The security deposit is usually equal to one month’s rent, but it can really be whatever the parties agree to in the lease. The specific conditions for how the tenant can recover the deposit at the end of the lease should also be included in writing.
6: Pet Terms
Landlords have the right to decide whether to allow tenants to keep pets on the property. The landlord should exercise this right by clear and specific language in the lease about the species, number, and size of animals permitted on the premises. Additionally, any additional fee required to have pets in the apartment should be explicitly stated in this section.
Landlords have a duty to maintain the minimum habitability of rental properties, but other repairs and maintenance can be distributed among the parties according to their agreement. This section should carefully outline which party is responsible for which type of damage, and what remedies exist for each party if the other breaches its maintenance obligations.
8: Alterations and Improvements
It’s natural for tenants to want to make an apartment feel like home by hanging decorations, painting the walls, or planting a garden in any available green space. The lease should describe which, if any of these alterations are permitted.
9: Right to Sublet
With the advent of home-sharing apps like Airbnb, many renters are looking to cash in on their unused space. Before you rent out your spare room, or your entire apartment while you’re away on vacation, be sure to check your lease. There should be language describing whether you are permitted to sublet and, if you are, whether landlord permission is required before hand.
10: Right of Entry
Landlords should be able to enter and inspect the property, but such an inspection should be subject to the rights of the tenant. There should be a lease term defining the amount of notice that a landlord must provide prior to entering the property, and what rights the tenant has with regard to such an entry.
This is just a sample of the most important lease terms that have developed over centuries of landlord-tenant law. While your lease should include at least these terms as a bare minimum, a real estate attorney in your area can help you figure out which additional terms are appropriate in your particular circumstances.