Leases and rental agreements are important legal documents that form the contractual basis of the landlord-tenant relationship. These agreements are typically (and ideally) in writing, although oral leases and rental agreements are legal for month-to-month tenancies and, in most states, for leases of a year or less.
Here’s an overview of the two types of agreements and common terms you’ll find in both (including provisions tenants should try to avoid).
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A rental agreement is a contract between a landlord and a tenant which gives the tenant the right to occupy an apartment, house, or other rental unit for a short period of time (usually 30 days, or on a month-to-month basis) in exchange for the payment of rent and compliance with terms such as no pets. Most rental agreements include a provision which allows for the automatic renewal or extension of the agreement unless the landlord or tenant gives the proper amount of written notice to the other party of the intention not to renew. The typical rental agreement gives the landlord the right to change the terms of the agreement as long as the landlord gives the tenant proper written notice. State laws (and local rent control rules in some areas) usually specify the rules and procedures on how landlord may end a rental agreement or change the terms.
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The terms “lease” and rental agreement” or often used interchangeably. A lease, however, is an agreement between a landlord and tenant which gives the tenant the right to occupy a property for a longer (fixed) period of time, usually six months to a year. In exchange for the right of occupancy, the tenant agrees to pay rent and abide by the other terms of the lease. A landlord may not unilaterally end a lease unless the tenant has violated one of the terms of the lease (for example, by failing to pay rent or keeping a pet in violation of the lease). State laws set out detailed rules and procedures for how landlords may end a tenancy under a fixed-term lease. Some states allow tenants to break a lease (without further liability for rent) under specified circumstances, such as if the landlord fails to provide a habitable rental unit.
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Certain terms and conditions are common to most leases and rental agreements. These include:
Rental and lease agreements may also include provisions relating to the maximum number of occupants living in the rental unit; rent increases; landlord and tenant repair and maintenance responsibilities; utility charges; pets; the landlord's right to enter the premises; the landlord's remedies if the tenant violates the terms of the lease; prohibitions against illegal activities on the property; and any other information the landlord feels is important, such as a restriction against tenant bringing in a new roommate or subletting the rental unit without landlord permission. Some states and cities require that certain disclosures be included in leases and rental agreements, such as whether the rental unit is in a flood area.
Tenants should never sign a lease or rental agreement without understanding what their legal rights are (for example, state limits on security deposits). The following provisions usually create problems for tenants and should be removed or renegotiated if at all possible.