11/7/2017 The 10 Essential Rules Every Lease Agreement Should Cover - UpCounsel Blog

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The 10 Essential Rules Every

Lease Agreement Should Cover
4 years ago by Matt Faustman 5 min read

Across the nation, and due to the housing and unemployment crisis of the past decade and a half, many
former homeowners have returned to renting property. Plagued by high unemployment, many college
graduates have also put buying a home aside and settled in a generation of renters.

Residential demographics from 2012 obtained by the National Multi-Housing Council indicate that renter-
occupied households make up 32% of the total U.S. households. That number changes depending on the
region with cities like New York and Los Angeles having 50% and 42% (respectively) households in rental
properties.

If youre a landlord or property owner, your lease agreement is probably one of the most important
documents you use. it is the legal agreement between you and each tenant that occupies the space you own,
and therefore, it acts as the rules by which they live in that space as well as defining the repercussions
should the rules be broken.

The lease agreement provides renters and landlords with a legally enforceable contract and its important
that this document have the necessary elements to provide security to both renter and landlord. A good
lease agreement protects your interests and prevents misunderstandings that could potentially lead to
litigation.

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11/7/2017 The 10 Essential Rules Every Lease Agreement Should Cover - UpCounsel Blog

10 Lease Agreement Terms You Have to

Include
The following are the essential terms that should be in every lease agreement:

1. Parties to the lease the lease agreement should name the landlords and tenants who are bound by the
agreement.
2. Description of the property the lease agreement should have a description of the property controlled
by the lease agreement. It may be as simple as the address and apartment number but it must be
identified or the agreement cannot be enforced.
3. Terms of rent the dollar amount should be in the agreement as well as the day of the month rent is
due, where the rent is to be sent, and how it will be accepted (by check, by automatic draft, etc.). The
terms for late rent should also be in this portion of the agreement.
4. Lease dates and termination the start and end of the lease should be in the agreement as well as the
description of how and when the landlord and tenant can end the lease. For example, an apartment
lease may be terminated with one months notice and a final months rent.
5. Security deposit details the amount of the security deposit, how it is to be paid, and the terms of its
future release should be specified in the lease agreement.
6. Occupants of the property the lease agreement should list the names of every person who will
regularly occupy the property and what happens if a person stays for more than a certain length of
time.
7. Pet details the lease agreement should specify whether or not a tenant is allowed to have a pet. The
limitations on number, size, and species should be listed as well. If there is an additional deposit
required for a pet, that amount should be included in the lease agreement.
8. Repairs and damages- the condition of the property should be noted as well as the tenants and
landlords responsibilities for repairs and problems with the property. The lease agreement should also
describe whether the landlord or tenant is responsible for damages to the property.
9. Alterations to the property the lease agreement should describe what, if any, alterations the tenant
may make to the property.
10. Right of entry the lease should include a clause that allows the landlord to enter and inspect the
property with reasonable notice. The terms should define reasonable notice and explain the rights of
the tenant.

In addition to the essential terms above, see the following optional terms that may apply to your property.

Some Optional Terms You May Want to

Add
Depending on your property, the following lease agreement terms may be useful to include in your lease
agreement:

Right to renew the lease if the tenant has the right to renew the lease at the end of the lease
agreement, those terms should be listed in the lease agreement. Ideally, a new lease agreement will be
signed each time the tenant renews.
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Right to sublet the space if the tenant has the right to sublet the property to another person, the lease
agreement should spell out those terms.
Parking restrictions/rules if the property has parking or offers parking in a designated spot, those
terms should be listed in the lease agreement.
Possessions if certain possessions, like water beds or grills are not allowed on the property, those
terms should be listed along with the consequences if those items cause damage to the property.
Property rules if the property is a multi-unit, the landlord may specify rules that govern behavior on
the property such as avoiding loud noises after 10 p.m. or not doing vehicle repairs in the parking lot,
for example.

While many essential and optional lease terms are included in pre-printed, standardized lease forms, those
terms may or may not fit your needs as a property owner. Its important to note, however, that standardized
agreements dont always fit the situation and they may or may not be customized to meet your state and
local requirements. When you have questions or want to customize a lease agreement, working with a
qualified real estate lawyer is the best way to get the best lease agreement one you and your tenants can
live with comfortably.

2 Comments Sort by Oldest

Add a comment...

Cabdulqaadir Cabdilrisaaq Cali Works at The George Washington University

THANK YOU SO MUCH IT REALLY HELPED ME
Like Reply Apr 16, 2017 1:59pm

Cherie Blickenstaff
Should the landlord print up a lease paperwork every year
Like Reply Jul 26, 2017 11:46am

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About the author

Matt Faustman
Matt is the co-founder and CEO at UpCounsel. Matt believes in the power of online
platforms to change antiquated ways of life and founded UpCounsel to make legal
services efficiently accessible. He is responsible for our overall vision and growth of the
UpCounsel platform. Before founding UpCounsel, Matt practiced as a startup and
business attorney.

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